Court upholds validity of assessment conversion, withdrawals effective from 2010-2011, emphasizing compliance and substantial evidence.

The court dismissed the appeals filed by the assessee, upholding the validity of the corrigendum converting the assessment from Section 143 to Section 144. The withdrawal of approval under Section 10(23C)(vi) and cancellation of registration under Section 12AA were deemed effective from the assessment year 2010-2011. The court affirmed the authorities' jurisdiction in assessing business expediency and found no perversity in the Income Tax Appellate Tribunal's findings. Overall, the court ruled against the assessee, emphasizing compliance with conditions and substantial evidence supporting the decisions.

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Issues Involved:

1. Validity of assessment under Section 143(3) without following the mandatory procedure.
2. Retrospective withdrawal of approval under Section 10(23C)(vi).
3. Retrospective cancellation of registration under Section 12AA.
4. Legality of converting an assessment under Section 143 to Section 144 via corrigendum.
5. Jurisdiction of authorities in deciding business expediency of expenditure.
6. Applicability of Sections 11 and 13 when approval under Section 10(23C)(vi) is granted.
7. Challenge to orders lacking jurisdiction in collateral proceedings.
8. Perverse findings by the Income Tax Appellate Tribunal.

Detailed Analysis:

1. Validity of Assessment under Section 143(3) without Following Mandatory Procedure:
The assessee contended that the assessment was not carried out as per the mandatory procedure under Section 143(3) of the Income Tax Act, 1961. However, the court noted that the assessment was actually a best judgment assessment under Section 144 due to the assessee's non-compliance with notices under Sections 142(1) and 143(2). The court held that the corrigendum issued to correct the section under which the assessment was made was valid, as the assessment order clearly indicated it was a best judgment assessment due to the assessee's non-cooperation.

2. Retrospective Withdrawal of Approval under Section 10(23C)(vi):
The court observed that the withdrawal of approval under Section 10(23C)(vi) was not retrospective but effective from the assessment year 2010-2011, the year in which the cause of action arose. The court emphasized that the withdrawal was based on substantial evidence of large-scale diversion of funds and violations of the conditions of approval. The court rejected the argument that the withdrawal was retrospective, stating it was effective from the year of the cause of action.

3. Retrospective Cancellation of Registration under Section 12AA:
Similar to the withdrawal of approval under Section 10(23C)(vi), the cancellation of registration under Section 12AA was also effective from the assessment year 2010-2011. The court held that the cancellation was based on findings of diversion of funds and activities not in accordance with the objects of the trust. The court found that the cancellation was justified and not retrospective.

4. Legality of Converting an Assessment under Section 143 to Section 144 via Corrigendum:
The court upheld the corrigendum issued to correct the assessment order from Section 143(3) to Section 144, stating that the assessment was indeed a best judgment assessment due to the assessee's non-compliance. The court noted that the procedural requirements under Section 144 were met, and the corrigendum was valid and legal.

5. Jurisdiction of Authorities in Deciding Business Expediency of Expenditure:
The court did not specifically address this issue in detail but implicitly upheld the authorities' jurisdiction in assessing the business expediency of expenditures based on the findings of diversion of funds and improper activities by the assessee.

6. Applicability of Sections 11 and 13 when Approval under Section 10(23C)(vi) is Granted:
The court did not provide a detailed analysis on this issue, but the overall judgment indicates that the benefits under Sections 11 and 13 were not applicable due to the violations and improper activities found by the authorities.

7. Challenge to Orders Lacking Jurisdiction in Collateral Proceedings:
The court rejected the argument that the order withdrawing approval under Section 10(23C)(vi) could be challenged in collateral proceedings. The court held that the withdrawal was based on substantial evidence and was not a void order. The court emphasized that the assessee could not refuse to comply with the conditions of approval and that the withdrawal was justified.

8. Perverse Findings by the Income Tax Appellate Tribunal:
The court upheld the findings of the Income Tax Appellate Tribunal, stating that the Tribunal's decision was based on substantial evidence of diversion of funds and violations by the assessee. The court found no perversity in the Tribunal's findings and dismissed the appeals.

Conclusion:
The appeals filed by the assessee were dismissed, and the substantial questions of law were answered against the assessee. The court upheld the validity of the corrigendum, the withdrawal of approval under Section 10(23C)(vi), and the cancellation of registration under Section 12AA, all effective from the assessment year 2010-2011. The court found that the authorities acted within their jurisdiction and based their decisions on substantial evidence.

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