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2013 (7) TMI 224 - HC - Income TaxReopening of assessment – Substitution on section 11(4A) vide Finance Act, 1983 and vide Finance (No.2) Act, 1991 – Assessee asserted that notice of reassessement is merely because of change in opinion – whether the show cause notices are beyond the period of limitation as per the amended provisions of the Act – Held that:- From 1st April, 1989 onwards, any action for opening or reopening an assessment for the asst. yr. 1988-89, and earlier assessment years will have to be taken in accordance with the amended provisions – Provisions of amended Act would be applicable only in those cases where the limitation in respect of old law has not expired. In the case of the assessee, the power could have been exercised under the repealed section as well as the amended section. The matter with regard to the applicability of the repealed section is merely an academic argument, however, in view of the fact that the power of reopening was existing in respect of escaped assessment prior to 1st April, 1989, therefore, it cannot be said that any new right has been acquired by the ITO or the said amendment has effected any vested right of the assessee. Re–assessment proceedings could be initiated within the time limits prescribed under the un–amended Section 149 of the Act subject to the fulfilment of certain conditions. If such conditions are satisfied, the revenue has right to initiate proceedings for reassessment. Such right cannot be curtailed by subsequent amendment, when no specific provision was made to curtail the period of limitation for initiating such proceedings. The amending Act changing the period of limitation for issuance of notice for reassessment has not made provision of the amending Act applicable retrospectively. Though the limitation is a provision dealing with procedure and all amendments in respect of procedure are retrospective but where the amendment has the effect to curtail a right vested, then the amended provisions cannot be applicable to the vested rights – Since the intimation of the assessment was given to the assessee, it cannot be said that the Assessing Officer has examined the return which may bar the Assessing Officer to reopen the assessment. Work in connection with the business is mainly carried on by the beneficiaries of the Trust. The trustees are running the newspaper and cannot be the beneficiaries of the Trust. The trustee and the beneficiary have the conflicting interest and thus, one person cannot be a trustee and a beneficiary – Balance sheets produced by the petitioner do not show that separate books of accounts were maintained in respect of charitable activities undertaken by the petitioner. Reason for re–assessment is that the Assessing Officer has not examined; the question whether the Trust fulfilled the condition laid down in Section 13 read with Section 11 of the Act and whether the income earned from the business is exempt from Tax as it has been utilized for the beneficiaries and by keeping separate accounts. Since the question was not examined by the Assessing Officer while framing assessment under Section 143(3) of the Act, and that the assessment framed was in ignorance of the statutory provisions and thus, the test that the income has escaped assessment on the basis of return filed stands satisfied. - Following decisions of Chandi Ram Vs. Income Tax Officer & another [1995 (12) TMI 6 – RAJASTHAN High Court], T. Kaliamurthi v. Five Gori Thaikkal Wakf [2008 (8) TMI 789 - SUPREME COURT] and Yeshwantrao Laxmanrao Ghatge Vs. Baburao Bala Yadav [1978 (2) TMI 203 - SUPREME COURT] – Decided in favour of Revenue.
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