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2008 (8) TMI 885 - HC - Income TaxE xemption u/s 11(i)(d) of the IT Act 1961 - Reopening of Assessment. Applicability of the provisions under ss. 11 13 and section 12AA - charitable trust - granted registration u/s 12AA - Whether the Tribunal is justified in allowing the exemption u/s 11(i)(d) of the IT Act 1961 ignoring the fact that the objects of the trust providing benefit to Maheshwari community was hit by the provisions contained in clause (i) of section 13? - HELD THAT - We have gone through the judgment in Ghulam Mohidin Trust vs. CIT 2000 (11) TMI 99 - JAMMU AND KASHMIR HIGH COURT and a look thereat makes it clear that the beneficiaries of the trust were confined to Muslim community intelligentsia. In the case in hand even from reading of two clause 6 and 13 as quoted by learned CIT it does not show that the trust was created or established for the benefit of any particular religion community or caste. At best clause 13 shows to be providing for some preference in favour of the persons belonging to a particular community. So far clause 6 is concerned that does not talk anything about as to for whose benefit the trust has been created. On perusal of trust deed shows a detailed list of objects of the trust and all those objects in categorical terms state about the beneficiaries being the society at large and does not confine to any particular caste community or even religion. In that view of the matter to say the least the ineligibility provided in section 13(1)(a) or (b) is not attracted. The question is accordingly answered against the Revenue and in favour of the assessee. Reopening of Assessment - Whether the Tribunal is justified in setting aside the assessment order ignoring the provisions of section 147 of the IT Act 1961 the AO validly issued notice u/s 148 of the Act? - Applying the views taken in the case of Lakhmani Mewaldas s case 1976 (3) TMI 1 - SUPREME COURT and Ganga Saran s case 1981 (4) TMI 5 - SUPREME COURT it has been found by the Tribunal that one of the conditions necessary for issuance of notice u/s 148 being under statement of income of the assessee is not fulfilled. It has been held that in order to bring an item within the purview of section 147 it is of utmost importance that the AO should have reason to believe based on relevant and cogent material that such income has escaped assessment. It has been found that there was no material direct or indirect available with the AO which could show that the receipt of donations was without any specific direction of corpus fund. The assessee has shown the receipts as having been received in the corpus fund coupled with the report of the auditor. The AO had not inquired into the nature of the receipts before issuing notice u/s 148 and in earlier years also the amount was held to be received in the corpus fund. Therefore Tribunal has rightly examined the controversy. It is significant to note that the Tribunal has further found that AO cannot initiate reassessment proceedings simply to verify the contents of the return unlike before it was vested in him in making regular assessment. It was found that the time-limit available for issuance of notice and making assessment u/s 143(3) had expired but then on that count he cannot assume the jurisdiction by venturing to make assessment u/s 148. Even after hearing learned counsel for the parties at length we are satisfied that the reasons given by the Tribunal are in accordance with law - Accordingly question is also answered against the Revenue. The net result is that the appeal therefore has no force and is dismissed.
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