AI Drafter 
TaxTMI 
TaxTMI 
2016 (12) TMI 1198
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....ppropriate writ or order quashing and setting aside the impugned Notice dated 21st March 2016 issued under Section 148 of the Income-tax Act, 1961 ["the Act" for short] by which the Assessing Officer has sought to reopen the assessment for A.Y 2009-2010, in exercise of power under Section 147 of the I.T Act. 3. Facts leading to the present Special Civil Application in nutshell are as under : 3.1 The petitioner-assessee filed return of income for Assessment Year 2009-2010 declaring total income of Rs. Nil, after claiming exemptions under Section 11 [1] of the Act. The petitioner, at the relevant time, was duly registered under Section 12AA of the Act as a "charitable institution". The return of income of the petitioner-assessee was sel....
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....viz., whether the activity of the assessee can be said to be charitable activities or not within the definition of Section 2 (15) of the I.T Act. That, by order dated 26th August 2016, the Assessing Officer disposed of the objections and has not agreed with the objections raised by the assessee. Hence, the assessee has preferred the present petition under Article 226 of the Constitution challenging the impugned Notice issued under Section 148 of the Act. 4. Shri S.N Divatia, learned advocate appearing on behalf of the assessee has vehemently submitted that the impugned Notice under Section 148 of the Act is bad in law and beyond the scope and ambit of Section 147 of the I.T Act. 4.1 It is vehemently submitted by Shri Divatia appearing....
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....vities of the petitioner-assessee and in support of his submissions that the activities of the assessee would fall within the definition of Section 2 (15) of the I.T Act. However, for the reasons stated herein-below, as the impugned notice for reopening deserves to be quashed solely on the ground that the condition precedent for invoking jurisdiction under Section 147 of the Act to reopen an assessment beyond the period of four years is not satisfied, we do not propose to take up larger issue whether the activity of the petitioner-assessee can be said to be charitable activity within the definition of Section 2 (15) of the Act or not. 5. Mrs. Mauna Bhatt, learned counsel appearing on behalf of the Revenue has tried to justify impugned no....
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....not be any reopening of assessment beyond the period of four years. Even there is a direct decision of the Apex Court on this issue, rendered in case of CIT vs. Kelvinator of India Limited [Supra]. 8. In the present case, the reasons recorded to reopen the assessment for AY 2009-2010, which is beyond the period of four years, read as under :- "Reasons Recorded u/s. 148 (2) of the I.T Act, 1961 In this case, the assessee filed its return of income in ITR-7 which for trust declaring total income of Rs. Nil on 31.03.2011. The case was selected for scrutiny under CASS and assessment under Section 143 (3) of the IT Act was finalized on 20.12.2011, at the total income of Rs. Nil. 2. It is seen from the records that the assessee has cl....
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....licable to the facts of the case. 6. Thus, the assessee's activities are out of the purview of provision of Section 2 (15) of the Act and therefore its income ought to be calculated as a normal business income and without giving benefit of exemptions u/s. 11 of the Act. When the income of the assessee is treated as normal business income, all receipts are required to be treated as income of the assessee. Provision of section 2 (15) r.w.s 11 are not applicable to the assessee. 7. In view of the above provisions of section 2 (15), the assessee ceased to be charitable trust/institution and assessee is not eligible for any exemption u/s. 11 to 13 of the Act and the exemption claimed by the assessee u/s. 11 (1) of the Act of Rs. 3,58,08,339/=....