2017 (8) TMI 1298 - SC - Income Tax

Validity of assessment u/s 153C r.w.s 143(3) - validity of satisfaction note prepared for subsequent years - Registration of the trust cancelled under Section 12AA(3) - Held that:- ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. - There was no satisfaction relate to four Assessment Years, namely, 2000-01 to 2003-04 - therefore assessment for four AY i.e. 2000-01 to AY 2003-04 set aside.

In these appeals, qua the aforesaid four Assessment Years, the assessment is quashed by the ITAT (which order is upheld by the High Court) on the sole ground that notice under Section 153C of the Act was legally unsustainable.

The necessary consequence would be that insofar as the conclusions of the AO in his assessment order regarding the activities of the trust not being genuine and not carried out in accordance with the trust deed or cancellation of registration, denial of benefits of Sections 11 and 12 etc. are concerned, the same would not be affected.