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2019 (7) TMI 302 - HC - Income TaxSection under which assessment order was passed - validity of corrigendum that the assessment passed u/s 144 - assessee contested that assessment was completed u/s 143(3) r/w. 153(A) - HELD THAT:- The assessee failed to comply with the notice u/s 142(1) dated 12.02.2013. The summon which followed the notice u/s 131 was also ignored. The assessee having filed his return of income on 09.11.2011 failed to comply with the terms of the notice issued u/s 143(2). In such contingency, the AO after taking note of the particulars available on record, seized the documents and statements recorded during the course of search completed the assessment. This has been clearly brought out in paragraph 4 of the assessment order. Therefore, we are of the clear view that the assessment for the year under consideration were u/s 144 and mentioning of Section 143(3) in the preamble of the assessment order is an error which is apparent on the face of the order and requires to be rectified. Therefore, the corrigendum dated 22.01.2015 is legal and valid. Cancellation of registration u/s 12AA with retrospective effect - withdrawal of approval granted u/s 10(23C)(vi) with retrospective effect - order of cancellation was passed based on recommendation made by AO while making assessment of AY 2010-2011 - HELD THAT:- Admittedly, the business premises of the assessee was subjected to search during the assessment year 2010-2011. The AO while completing the assessment found large scale diversion of funds and several improper actions on the part of the assessee in direct conflict to the terms of the Deed of Trust and conditions of registration/exemption. Therefore, it was recommended to the competent authority to initiate proceedings for cancellation of the exemption/registration. The matter was decided after due opportunity to the assessee and speaking orders have been passed and obviously these orders will take effect from the assessment year 2010-2011 and it is a mis-nomer to state that the orders are retrospective or retroactive. The lis which was the subject matter is for the assessment year 2010-2011 and though the orders of cancellation of the exemption/registration was passed on 18.11.2014 and 07.12.2016 they would take effect from the assessment year 2010-2011 during which year the cause of action arose. In an appeal u/s 260A, we are not required to go into the facts nor or we are entitled to re-adjudicate the factual details in the absence of any perversity or illegality. Yet since the learned counsels had advanced arguments on those lines, we perused the orders dated 18.11.2014 and 07.12.2016, from which we find that there are substantial documentary evidence and other details which clearly show that the assessee Trust has violated all the conditions and they are not entitled for any approval u/s 10(23C)(vi) or a registration u/s 12AA. Hence, both the grounds raised by the learned counsel for the assessee has to necessarily fail. The AO pointed out that the assessee has violated its own objectives by diverting substantial portion of its funds by and to the Managing Trustee without truly recording in the books of accounts maintained by it and as these funds were diverted outside its books of accounts the audit report furnished does not reflect the true and correct affairs of the assessee. After referring to the facts discovered during the course of search coupled with the admission of the Managing Trustee and the officers incharge of the accounts in their deposition, the AO held that such a contumacious conduct in running the affairs of the Trust to go against the basic tenets of the Trust and Trusteeship warrants cancellation of the approval. All these factual findings are perfectly justified and consequently, approved. - the substantial questions of law are answered against the assessee
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