Reassessment and charitable exemption claims turn on full disclosure, 85% application rule, and merits-based review of alternative relief.

Reassessment under sections 147 and 148 was upheld because the assessee had not fully and truly disclosed a material fact relevant to exemption under section 11, so reopening was not barred for want of disclosure. The claim for exemption under section 11 also failed because 85% of the income or receipts had not been applied for charitable purposes. The alternative claim under section 10(23C)(iiiad) was required to be examined on merits, and the matter was remitted to the Assessing Officer for fresh consideration of that exemption.

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Issues: (i) Whether the reassessment initiated under sections 147 and 148 of the Income-tax Act, 1961 was valid in the absence of full and true disclosure of material facts; (ii) Whether the assessee's alternative claim for exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961 required examination by the Assessing Officer; (iii) Whether denial of exemption under section 11 of the Income-tax Act, 1961 was justified where 85% of the income was not applied for charitable purposes.

Issue (i): Whether the reassessment initiated under sections 147 and 148 of the Income-tax Act, 1961 was valid in the absence of full and true disclosure of material facts.

Analysis: The reopening was found to be supported by the record because the assessee had not fully and truly disclosed the material fact that 85% of the income or receipts had not been applied for charitable purposes, which was necessary for exemption under section 11. The reassessment was therefore not barred on the ground of want of disclosure.

Conclusion: The reopening under sections 147 and 148 was upheld and this issue was decided against the assessee.

Issue (ii): Whether the assessee's alternative claim for exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961 required examination by the Assessing Officer.

Analysis: The alternative exemption claim was held to be a matter that needed consideration on merits. The availability of exemption under section 10(23C)(iiiad) was not to be rejected merely because the original return had proceeded on a different claim, and the Assessing Officer was required to examine whether the assessee otherwise satisfied the conditions for that exemption.

Conclusion: The issue was restored to the file of the Assessing Officer for fresh consideration and was decided in favour of the assessee.

Issue (iii): Whether denial of exemption under section 11 of the Income-tax Act, 1961 was justified where 85% of the income was not applied for charitable purposes.

Analysis: The assessee did not satisfy the statutory condition of applying 85% of its income or receipts for charitable purposes, and therefore the claim under section 11 could not succeed.

Conclusion: Denial of exemption under section 11 was upheld and this issue was decided against the assessee.

Final Conclusion: The reassessment was sustained, the claim under section 11 failed, and the alternative exemption claim under section 10(23C)(iiiad) was remitted for reconsideration, resulting in a partial success for the assessee.

Ratio Decidendi: A reassessment beyond four years is sustainable where the assessee has not fully and truly disclosed a material fact necessary for assessment, and an alternative statutory exemption claim must be examined on merits if it is otherwise available.

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