TaxTMI 
TaxTMI 
2026 (8) TMI 699
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.....03.2026 passed during the pendency of this writ petition under section 147 of the Act read with section 144B of the Act along with consequential demand notice for the AY 2017-18. 2. The petitioner is a Trust, which is eligible for claiming exemption under section 10(23C)(vi) of the Act. The petitioner filed its return of income for the year under consideration on 31.10.2017 declaring total income at Rs. Nil. The case of the petitioner-Trust was selected for scrutiny assessment by issuing a notice dated 01.10.2019 under section 142(1) of the Act, and the petitioner-Trust furnished all the details and information vide letter dated 02.10.2019. However, the Assessing Officer vide notice dated 29.11.2019 issued under section 142(1) of the Act called upon the petitioner-Trust to furnish certain details in respect of transactions with persons specified under section 13(3) of the Act including details pertaining to remuneration of Rs. 42,00,000/- paid to Mr. M.P. Chandran (Executive Director and Trustee). The petitioner-Trust furnished all its details along with the explanation in respect of remuneration to Mr. Chandran. Eventually, an assessment was framed under section 143(3) of the ....
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.... out that the petitioner-Trust, extensively, explained each and every allegations leveled in the show-cause notice through its reply however, while passing the impugned order, the explanation tendered by the petitioner-Trust is entirely ignored. It is contended that the Assessing Officer has not applied mind to the provisions of section 10(23C) (vi) of the Act. In this context, he has referred to the provisions of section 152 of the Act and has submitted that despite the petitioner-Trust having clearly demonstrated that even if the amounts which are disputed by the Revenue are excluded from the amount applied for the purpose of the petitioner-Trust, then also there will be no impact on taxable income and hence, it is urged that in view of section 152 of the Act, the reopening may be declared as illegal and invalid. Finally, he has submitted that reopening of the assessment is nothing but a change of opinion as in the scrutiny assessment all the queries relating to as mentioned in the show-cause notice were already satisfied by the petitioner-Trust by providing documentary evidence, which has been accepted by the then Assessing Officer and hence, it is urged that the action of the r....
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....g Officer, who had passed the order dated 06.03.2026, though by the interim order, the Court had restrained the Assessing Officer to do so. Pursuant to that order dated 27.07.2026, learned Senior Standing Counsel Ms. Mehta has tendered the affidavit-in-reply dated 01.08.2026. The same is ordered to be taken on record. She has referred to the averments made in paragraph Nos.4 and 5, which are as under: "4. I state that the Petitioner thereupon file Civil Application (for Amendment) No. 2 of 2026 in the captioned writ petition, placing on record the assessment order passed in the captioned matter without the permission of this Hon'ble Court, as directed. I further state that, upon due consideration of the said Civil Application filed by the Petitioner bringing on record the assessment order dated 06.03.2026, the deponent communicated to the office of CIT(Exemption) Ahmedabad that FAO passed the order u/s.147 r.w.s 144B of the Act on 06.03.2026 despite the Hon'ble High Court vide order dated 17.09.2025 stayed the final assessment order as the issue was not decided on merits. Considering the sensitivity of the matter involved and the demand being not enforceable as the final a....
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....h inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit. 11. In our considered opinion, as and when the Revenue is confronted with the issue of framing of the assessment order by flouting the orders of this Court, the powers by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner, as mentioned in the provisions of section 264 of the Act can always be exercised, and any order which is not prejudicial to the interest of the assessee can be passed by the Commissioner. Thus, by invoking the provision of section 264 of the Act, the Commissioner can always either revoke or set aside the order passed by the Assessing Officer which is passed in defiance or in contravention of the interim orders or the orders passed by this court. The Revenue cannot cite the excuse of nonavailability any functionality in the system of withdrawing the assessment order, which has been passed in defiance of the interim orders / orders of this Court. The power under section 264 of the Act is always available for the higher authorities i.e. the Commissioner t....
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.... xxxx Provided also that the fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via)-(a) applies its income, or accumulates it for application, wholly and exclusively to the objects for which it is established and in a case where more than fifteen per cent of its income is accumulated on or after the 1st day of April, 2002, the period of the accumulation of the amount exceeding fifteen per cent of its income shall in no case exceed five years... ... ..." 15. Thus, the combined reading of proviso to Section 10(23C)(vi) of the Act, permits the 15% limit of the maximum amount of income an approved educational institution can save or accumulate for future use without losing its tax exemption, provided the remaining 85% is spent on education during that year. It is not denied by the respondent that the petitioner-Trust is covered under these provisions. In the present case, as per the percentage of utilization of income declared income by the petitioner 96.01%, which above the threshold limit of the 85%, whereas as....
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....but scholarship fees and concession amount. 17. For sponsorship expenses of Rs. 1,04,66,771/-, the documents such as proposal for setting up J.G. University, letter of intent by Government of Gujarat, permission by the Government of Gujarat were furnished with an explanation that J.G. Trust is sponsoring body of J.G. University. Pursuant to the proposal by the petitioner-Trust for establishing J.G. University, the Government of Gujarat had issued a letter of intent stating that such proposal was being considered for permission to establish State Private University in the name of J.G. University. It was further explained by the petitioner-Trust that all employees and professionals are required to be engaged by the petitioner-Trust in the capacity of sponsoring body of the proposed university and such expenses are to be paid till the approval of the university by the Government. These explanations are also brushed aside and not considered by the Assessing Officer. The petitioner in the scrutiny assessment has called upon to furnish details of transactions with trustee, and eventually the Assessing Officer passed the assessment order dated 10.12.2019 under section 143(3) of the Act....