9911796707
TMI Blog2016 (10) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued under Section 148 of the Income Tax Act, 1961 ['the Act' for short] and also the order dated 29.11.2010 rejecting the objections filed by the petitioner. 2. Brief facts are as under: The petitioner is Gujarat State Board of School Textbooks ['the Board' for short] formed by the State Government for the purpose of promoting the advancement of education in general. Initially, the Board was exempted from levy of income tax under section 10(22) of the Income Tax Act,1961 ['the Act' for short] of the delivery period upto 01.04.1999. On later period, the amendment has taken place from assessment year 1999- 2000 and section 10(22) of the Act came to be omitted and substituted by section 10(23C)(vi) of the Act. The petitioner- Board was exempted under Section 10(23C)(vi) of the Act for the assesment year 1999-2000 till the assessment year 2002-03. The petitioner-Board has also got registration under section 12AA of the Act w.e.f. 01.04.1999 and by virtue of the later amendment, compulsory filing of return of income was required. Resultantly, the petitioner-Board has started filing return of income for the initial assessment year 2003-04 onwards. In 2003- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -09 is concerned, the assessment proceedings under section 143(3) are pending. Similarly, for A.Y 2009-10 also the petitioner has received notice under section 143(2) of the Act and by referring to this factual background with respect to return of income submitted by the petitioner,the petitioner has stated that there is no failure on part of the petitioner either in filing return or furnishing of particulars which came to be demanded. The present petition is related to the period of A.Y 2005-06 in which, the petitioner has pursuant to receipt of the notice under section 148 of the Act has demanded the reasons for reopening under a communication dated 27.07.2010 which, later on, came to be provided by the respondent authority on 05.08.2010. After receipt of the said reasons a further objection came to be filed by the petitioner under a letter dated 12.08.2010 which, later on, after consideration came to be rejected by an order dated 29.11.2010. It is against this issuance of notice under section 148 of the Act for A.Y 2005-06 and against the rejection of objection filed by the petitioner with respect to that year the petitioner has brought this petition for challenge. The reason fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssable as per the provisions contained in Section 11(4) of the Act. In the background of these reasons stated here-in- before the authority has initiated proceedings to reopen the assessment by serving a notice under Section 148 of the Act dated 30.03.2010. 5. Mr R K Patel learned counsel appearing for the petitioner has contended that the petitioner-Board is set up for its avowed objects and has been allowed to be set up in aid and to promote the advancement of education in general and all primary, secondary and higher secondary education in particular. Learned counsel has submitted that the objects of the trust in brief mainly are mentioned in the petition but the specific objects of the trust are referred to here-in-after: (a) To aid and promote advancement of education in general and of primary, secondary and higher secondary education in particular; (d) to print, publish, stock, distribute and sell or enter into any arrangement for printing, publishing, stocking, distribution and sale of textbooks, approved, sanctioned or assigned by the Government or other appropriate, authority and any other publications which the Board may decide to publish with a view to makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further drawing the attention that once the applicability and validity of section 12AA of the Act is operational, it is not permissible for the respondent authority to take out the proceedings of reopening of the assessment. The Assessing Officer has no jurisdiction to invoke the proceedings under Section 147 of the Act for disturbing the benefit which is also prevailing under Section 11 of the Act and for that purpose, the learned counsel has drawn the attention to decision in case of Sagar Enterprises V/s. Assistant Commissioner of Income-tax reported in 173 CTR 528. 7. Counsel for the petitioner has further submitted that the entire reopening process which has been undertaken is based upon misinterpretation of provision contained under section 11(4) of the Act and therefore submitted that the once the authority has examined thoroughly the entire facts of the case, it is not open to reopen the assessment. Learned counsel has drawn the attention to various annexures and record attached to the petition compilation and contended that the issue related to this exemption has been thoroughly gone through in the scrutiny proceedings which had already become final. By referring to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions: i Amount applied for charitable or religious purpose ₹ 482027702/- ii Amount deemed to have been applied to charitable or religious purposes under section 11(1)(2) ₹ 78055159/- iii Amount accumulated or set apart/finally set apart to charitable or religious purposes u/s. 12AA (15% of the amount of trust) ₹ 98838152/- 8. Counsel has submitted that information was required from the petitioner and in response to that the particulars have been furnished and it is upon examination of those explanation in response to the notice, the assessment proceedings have been finalized. Learned counsel has submitted that on these very issue on earlier year also, the reopening notice was issued which upon explanation of the petitioner came to be dropped and thereafter, there is no material change of any circumstance which would permit the authority to deviate from the said issue. Learned counsel has further submitted that in past, under a communication dated 21.12.2010, a show cause notice came to be issued in a situation where the amendment has taken place to section 2(15) by virtue of Finance Act 2008 w.e.f. 01.04.2009 and on that point of time the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls with respect to this year under consideration the reopening is justified. Learned counsel for the Revenue has submitted that while dealing with an identical situation the Kerala High Court in case of Ideal Publications Trust vs. Commissioner of Income Tax reported in [2008] 305 ITR 143 has permitted the reopening and therefore, in the background of this set of circumstance it has been stated to dismiss the petition. 10. Having heard learned counsel appearing on behalf of the respective parties and having gone through the relevant record of the petition it is transpired that for the year under consideration for which the reopening is inclined, on earlier occasion, the scrutiny assessment has taken place wherein the issue has been gone into thoroughly as has been canvassed before us. It is also prevailing on record that in the earlier year, the very same issue with respect to A.Y 2004-05 has arisen wherein also as per the record, the reopening proceedings were dropped and thereafter it is noticed that there is no material change in activity of the Board which is also indicative of the fact that whether the reopening in the present form is permissible or not. Learned counsel app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ami Satsang was enti- tled to exemption under ss. 11 and 12 of the Income Tax Act of 1961. Counsel for the Revenue had told us that the facts of this case being very special nothing should be said in a manner which would have general application. We are inclined to accept this submission and would like to state in clear terms that the decision is confined to the facts of the case and may not be treated as an authority on aspects which have been decided for general application. 12. In another decision in case of Commissioner of Income Tax vs. Excel Industries Ltd. reported in [2013] 38 Taxmann.com 100, the Hon'ble Apex Court has observed in para 29 and 31 and ultimately held that it appears from the record that in several assessment years the Revenue accepted the order of Tribunal in favour of petitioner and did not pursue the matter any further and therefore, that being the position, it has been observed that Revenue cannot be allowed to take a different view. The observations contained in the said decision in paras 29 and 31 are referred to hereinafter: 29. In Radhasoami Satsang Saomi Bagh v. Commissioner of Income Tax, [1992] 193 ITR 321 (SC) this Court did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The income spoken of in Sub-section (4) appears to us to be the gross income and not the net income of the business undertaking. The net income is computed after granting the admissible deductions. The deductions admissible from income of a business undertaking are not always the same as application of income wholly for charitable or religious purposes. They may or may not be admissible deduction from business income under the provisions relating to assessment of income. Yet they are entitled to exclusion under Sub-section (1) of Section 11 because they represent application of income wholly for charitable or religious purposes. Here, the ITO has to scrutinise the accounts and see if there is suppression of income or manipulation of accounts with a view to conceal income. He could see whether there are items which are deemed to be income under some provision of the I.T. Act and which have not been accounted for in the books of the undertaking, or there may be some receipts which are really in the nature of income and which have not been reflected in the accounts. This interpretation of Sub-section (4) of Section 11 is in consonance with the legislative intent as disclosed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no distinguishable material or there is no substantial change of circumstance of any nature after scrutiny of assessment which has taken place and thorough examination is undertaken with respect to the issue of exemption it is not proper on the part of the respondent authority to proceed further with the reopening of assessment. If that be allowed it would be clearly in contrast to the ratio laid down by the Hon'ble Apex Court which has analyze the concept of change of opinion. For this purpose, the relevant observations made by the Hon'ble Apex Court in case of Kelvinator of India Ltd (supra) reads as under: The concept of change of opinion on the part of the Assessing Officer to reopen an assessment does not stand obliterated after the substitution Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of Change of Opinion must be treated as an inbuilt test to check the abuse of power. Hence, after April ..... X X X X Extracts X X X X X X X X Extracts X X X X
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