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2023 (12) TMI 815 - HC - Income TaxReopening of assessment u/s 147 - notice after your years expiry - rejection of exemption u/s 11 - HELD THAT:- We would agree with Petitioner on the aspect of commercial activities alleged by the AO that AO has presupposed that assessee is indulged in commercial activity. Just because assessee has been earning a regular income from letting out its auditorium does not mean Petitioner was indulging in commercial activities. Mr. Agrawal submitted that the Income Tax Department initiated proceedings u/s 12AA(3) of the Act to withdraw the exemption granted to Petitioner u/s 11 of the Act which proceedings have been quashed and set aside. Thus in view of the proviso to Section 147 of the Act, which squarely applies to the case at hand, re-opening of the assessment is permissible only if there was failure to disclose fully and truly material facts. Reason to believe itself indicates that amount of Rs. 2,84,19,039/- which the AO claims to have escaped assessment has been obtained from the return of income filed by Petitioner. Return of income, copy whereof is annexed to the Petition, itself indicates that income from hall charge, other charges recovered from auditorium users and compensation received for use of premises. Therefore, by no stretch of imagination being a failure to truly and fully disclose. When Petitioner’s case is they are not carrying out any commercial activity, Petitioner cannot be accused of not disclosing that they were carrying out commercial activity.
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