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TMI Blog2016 (7) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... by examining the assessment orders and the background facts and this has to be done by the petitioner before the appellate authority in the pending appeals. The effect of the rectification by way of the impugned corrigendum is equally an issue relatable and touching upon whether the assessment orders were passed on best judgment basis. Therefore, the petitioner should pursue their challenge to the impugned corrigendums before the Commissioner of Income Tax (Appeals)-II, before whom the appeals filed against the assessment orders are pending, since April 2013. In the light of the above, the Writ Petitions are dismissed and the petitioner is permitted to challenge the correctness of the impugned corrigendums by raising additional grounds before the Commissioner of Income Tax (Appeals) in the appeal petitions which were filed on 22.04.2013, against the assessment orders dated 28.03.2013, for the years 2010-11 and 2011-12 and the Commissioner of Income Tax (Appeals) is directed to consider the additional grounds raised along with the other grounds already raised in the appeals and after hearing the parties, dispose of the appeals as expeditiously as possible preferably, within a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that during the course of search and seizure operations, it came to light that the petitioner exists only for the purpose of profit and not solely for educational purposes and the contribution received are not voluntary, thus violating the provisions of the Act justifying withdrawal of the approval granted to the petitioner under Section 10(23C) of the Act. It was stated an amount of ₹ 1,57,42,700/- has been collected from the students in cash at the time of admission, without issuing any receipt and without entering in the regular books of accounts thereby setting apart the funds for the purposes other than the objects of the Trust and thus, the petitioner collected capitation fee for giving admissions under the management quota, which is a clear violation of law. The fifth respondent opined that the capitation fee are to be classified as business income falling under the ambit of Section 28(iv), thereby dis-entitling them for exemption. The sworn statement recorded from the Managing Trustee and relevant officers of the Trust during the course of search were relied on to state that it has been admitted that the amounts so collected, was collected in cash for which, no rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted has been withdrawn, he can proceed to pass an order, denying the benefit of exemption on the ground of contravention and without complying with these mandatory provision, the Assessing Authority gets no jurisdiction to re-open the assessment made. On 01.12.2014, the petitioner filed a petition under Section 154 of the Act before the fifth respondent, to rectify the order passed by the fifth respondent, dated 18.11.2014, holding that the petitioner will not be eligible for exemption under Section 10(23C)(vi), of the Act. In the mean time, a notice was issued to the petitioner under Section 226(3) of the Act treating the petitioner to be an assessee in default in respect of the tax payable for the assessment years 2010-11 and 2011-12. 6. The petitioner filed Writ Petitions in W.P.Nos.13376 13377 of 2014, challenging these notices on the ground that they have filed appeals before the Commissioner of Income Tax (Appeals)-II against the assessment orders, dated 28.03.2013 and 22.04.2013 respectively and also filed stay petition before the Assessing Officer on 24.04.2013 and the Assessing Officer by order dated 07.05.2013, directed the petitioner to pay a sum of ₹ 1,11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government or the prescribed authority, the contravention of the provisions of the said Section and only after such approval granted has been withdrawn, he can proceed to pass an order denying the benefit of the exemption on the ground of contravention. However, in the cases on hand, the Assessing Officer without intimating the Central Government/prescribed authority about the contravention of the provisions of Section 10(23C)(vi) has completed the assessments under Section 143(3) read with Section 153A on 28.03.2013. It is further submitted that this objection was raised by the petitioner in the Writ Petitions field by them challenging the notices under Section 226(3) of the Act, after which the first respondent/Assessing Officer has issued the impugned corrigendum, which is erroneous. It is submitted that the provisions of Section 144 of the Act, is applicable only if the petitioner fails to comply with the conditions mentioned in clauses (a)(b) (c) of sub-section (1) of Section 144 and only then, the Assessing Officer shall make the assessment of the total income or loss to the best of his judgment based on the materials covered and determine the sum payable by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent to the college address at Tiruvallur on 26.09.2012. The ITI served the notice on 27.09.2012, at the changed address at Guindy and the notice dated 17.09.2012, was received by one Mr.N.Srinivasan. That apart, notices were issued under Section 142(1) of the Act, dated 01.11.2012, and notice under Section 143(2) of the Act, dated 12.02.2013. It is further submitted that by way of affording a final opportunity, letter dated 22.03.2013, was sent to the petitioner, which was common for both the assessment years which was received by Mr.V.R.K.S.Prasuala on behalf of the petitioner Trust on 25.03.2013. It is further submitted that apart from the above, the authorised representative of the petitioner was called upon to furnish the details in support of the return filed by them, however, on 13.03.2013, the authorised representative filed a letter withdrawing themselves from representing the petitioner. Subsequently, the General Manager/Finance appeared on 14.03.2013, and thereafter, the Chairman of the Trust appeared on 19.03.2013 and agreed to furnish the details called for by 21.03.2013. However, there was no further response. Inspite of it, once again, a letter was sent on 22.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 for both the years only with regard to the provisions of law under which the assessments were completed. 18. It is not in dispute that as against the orders of assessment dated 28.03.2013, for both the years i.e., 2010-11 and 2011-12, the petitioner has filed appeals before the Commissioner of Income Tax (Appeals)-II/fourth respondent on 22.04.2013 and the appeals are pending. While the appeals were pending, the petitioner moved for stay before the first respondent/Assessing Officer by application, dated 26.04.2013, who passed a conditional order directing the petitioner to pay a portion of the tax, which admittedly, was not complied with by the petitioner, but the petitioner chose to file a separate stay application before the second respondent/JCIT on 15.05.2013. While the matter stood thus, the notices were issued to the petitioner under Section 226(3), which the petitioner had challenged before this Court by filing Writ Petitions in W.P.Nos.13376 13377 of 2014, which were disposed of by common order dated 19.12.2014, directing the stay petitions to be heard and staying the operation of notices issued under Section 226(3), till orders are passed on the stay petition. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir case on the manner in which the assessee had acted pursuant to the various notices and summons issued to them and would state that they did not co-operate in finalising the assessment proceedings and therefore, Assessing Officer passed the assessment orders on best judgment basis. This exercise need not be done by this Court in these Writ Petitions for the simple reason that the assessment orders are put to challenge before the Appellate Authority, where all grounds could be canvassed by the petitioner/appellant. 22. It was argued by the learned Senior counsel for the petitioner that the corrigendum was issued only after the petitioner had pointed out in the earlier Writ Petitions that the Assessing Officer was not justified in withdrawing the benefit of exemption without having intimated the Central Government or the prescribed authority of the alleged contravention. 23. The learned Standing counsel for the respondents had referred to Section 154 of the Act which deals with rectification of mistake and it is submitted that the rectification has been done within the limitation prescribed under sub-section 7 of Section 154. 24. Therefore it has to be seen whether it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27. In the light of the above, this Court is of the view that it would be in fitness of things and appropriate for the petitioner to pursue the matter before the Appellate Authority. Apart from the discussion in the preceding paragraphs, the issue as to whether the assessment orders are made on best of judgment basis or otherwise is a factual issue to be gone into by examining the assessment orders and the background facts and this has to be done by the petitioner before the appellate authority in the pending appeals. The effect of the rectification by way of the impugned corrigendum is equally an issue relatable and touching upon whether the assessment orders were passed on best judgment basis. Therefore, the petitioner should pursue their challenge to the impugned corrigendums before the Commissioner of Income Tax (Appeals)-II, before whom the appeals filed against the assessment orders are pending, since April 2013. 28. In the light of the above, the Writ Petitions are dismissed and the petitioner is permitted to challenge the correctness of the impugned corrigendums by raising additional grounds before the Commissioner of Income Tax (Appeals) in the appeal petitions which w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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