2015 (4) TMI 189 - HC - Income Tax

Scope of Section 153C - exemptions u/s 11 denied - Revenue sought to rely on a search and seizure which revealed that certain documents were seized from the premises - Held that - On mere seizure of these documents it was not established that the assessment proceedings could have been reopened. There are similar questions and which were raised in relation to an associate trust. Those questions were not termed as substantial questions of law by this Court. The Tribunal examined the scope of Section 153C of the Income Tax Act, 1961 and observed that the provision cannot be resorted unless the Authorities find any material which is incriminating in nature. In the facts of this case, there was no justification in proceeding under Section 153C of the Income Tax Act, 1961 and, therefore, we find that the Tribunal's view was justified in the facts and circumstances peculiar to the Assessee. A similar issue was decided in by this Court in the case of the same Assessee 2014 (7) TMI 94 - BOMBAY HIGH COURT - Decided against revenue.

Summary

Issues:
Challenge to Tribunal's order disallowing exemption under section 11 of the Income Tax Act, 1961 for an educational institution trust based on seized documents and assessment proceedings reopening.

Analysis:

1. Exemption under Section 11 Disallowed by Assessing Officer:
The appeal by the Revenue challenges the Tribunal's order dated 31st December, 2012, regarding the disallowance of exemption under section 11 of the Income Tax Act, 1961 for the assessment years 1999-2000 and 2001-02 to 2006-07. The trust in question is an educational institution managed by a trust formed under a Deed of Trust dated 14th November, 1991. The Assessing Officer disallowed the exemption under section 11 and computed the total income, citing various grounds. The Revenue attempted to rely on documents seized during a search and seizure operation, but it was not conclusively established that the assessment proceedings could be reopened solely based on the seizure of these documents.

2. Similarity to Associate Trust and Previous Court Orders:
The appeal highlighted that questions raised in this case were similar to those raised in relation to an associate trust. However, those questions were not considered substantial questions of law by the Court previously. The Court referred to its earlier orders in various appeals, including Income Tax Appeal No.36, 37, and 39 of 2012 decided on 10th June, 2014, and Income Tax Appeal No.854 of 2012 decided on 12th September, 2014. The Court noted that similar educational trusts had faced similar issues and appeals were dismissed based on the lack of substantial questions of law.

3. Concession by Parties and Dismissal of Appeal:
Both parties conceded that the questions raised in this appeal were common and had been addressed in previous cases where appeals were dismissed due to the absence of substantial questions of law. As a result, the Court dismissed the current appeal accordingly, stating that there would be no order as to costs. The decision was based on the consistent approach taken in similar cases and the lack of new substantial legal questions raised in the current appeal.