1990 (1) TMI 95 - AT - Income Tax

Summary

Issues: Assessment beyond the prescribed period of limitation, treatment of donation amount.

Analysis:
1. The appellant trust filed its return of income for the accounting period ending 31-3-1984, claiming deductions under sections 11, 12 & 13 of the Income Tax Act, 1961. The Income Tax Officer (ITO) disallowed the deductions as the trust's application for registration under section 12A(9) was pending, and treated a donation towards the trust's corpus as income due to lack of donor confirmations.

2. The appellant challenged the assessment order on grounds of limitation and treatment of the donation amount. The Commissioner of Income Tax (Appeals) dismissed the appeal, leading the appellant to approach the Appellate Tribunal.

3. The Tribunal found that the assessment was made after the expiry of the prescribed period of limitation. The return filed under section 139(4) attracted section 153(1)(c), mandating assessment within one year from the date of filing the return. The assessment order, dated 25-6-1986, was anti-dated to avoid the time limit, as evidenced by a letter from the ITO to the appellant on 27-7-1987.

4. The ITO's letter requested information and indicated a hearing scheduled for 3-8-1987, implying that the assessment was not completed by that date. The Tribunal concluded that the assessment was made much later than claimed, rendering it invalid due to being beyond the prescribed time limit. The anti-dating of the assessment order did not validate the assessment.

5. The Tribunal rejected the argument that the ITO's letter was for seeking clarifications post-assessment, as the assessment order itself referenced the trust's non-eligibility for deductions under sections 11, 12 & 13 due to lack of registration under section 12A(a). The assessment was deemed to be anti-dated and made beyond the time limit, necessitating its annulment.

6. Consequently, the Tribunal allowed the appeal, annulling the assessment made by the ITO.