TMI Blog2023 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent for passing the order under Section 148A(d) are arbitrary and illegal and has been passed by total non application of mind. Here is the case, where, by total non application of mind to the fact that in respect of subsequent Assessment Years 2016-17, 2017-18, 2018-19, it has been accepted by the respondent that the petitioner is a Section 10(23C)(iiiab) institution and is entitled for exemption, the impugned Assessment Order has been passed. However, the re-opening of the assessment pertains to the Assessment Year 2015-16, which is arbitrary and illegal. Therefore, the Anshul Jain decision [ 2022 (10) TMI 3 - SC ORDER] relied by the learned Standing counsel for the respondent has no applicability for the facts of the instant case. As per judgment Red Chilli International Sales [ 2023 (1) TMI 674 - SC ORDER] it is very clear that this Court is having the power to consider a challenge being made to an order passed under Section 148 A(b) of the Income Tax Act. For the foregoing reasons, the impugned order passed u/s 148A(d) and the consequential notice have to be quashed and the writ petition will have to be allowed. Decided in favour of assessee. - Honourable M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, which is arbitrary and illegal. 5. A counter affidavit has been filed by the respondent denying the contentions of the petitioner. According to them only by following the due procedure as contemplated under Sections 148A and 148 of the Act, the impugned order has been passed under Section 148A(d) of the Act. According to them huge fixed deposits are maintained by the petitioner institution. According to them, the impugned order was passed only after duly verifying all the financial statements and the submissions made by the petitioner. It is their case that the petitioner failed to prove that it is substantially financed by the Government and it is covered by the provisions of Section 10(23C)(iiiab) of the Act. According to them only based on materials available on record, they have found the income chargeable to tax as escaped assessment and only for the said reason, notice under Section 148 of the Act has been issued to the petitioner for the Assessment Year 2015-16. However, they admit that insofar as the Assessment Year 2015-16 is concerned, there is no necessity for the petitioner to file its Income Tax return. According to them, the information receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be challenged. 10. Per contra, learned Senior Standing Counsel appearing for the respondent would reiterate the contents of the counter affidavit filed by the respondent before this Court. He would submit that only by following the procedure contemplated under Section 148-A and 148 of the Income Tax Act, 1961 the impugned order has been passed under Section 148A(d) of the Act. 11. He drew the attention of this Court to the income and expenditure statement filed by the petitioner and would submit that huge amounts in the form of fixed deposits are maintained by the petitioner without submitting a convincing explanation to the respondent with regard to the sources for the same and that is the reason as to why the impugned order under Section 148A(d) of the Act and a consequential notice under Section 148 of the Act were issued. Since no proper explanation was submitted in the reply, he would submit that after getting prior approval from the Principal Chief Commissioner of Income Tax (Exemption), New Delhi, the order dated 30.03.2022 was passed against the petitioner under Section 148A(d) of the Act. Further, he would submit that even before an Assessment Order could be passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge amount of Fixed Deposits for which they have not a given proper explanation to the respondent and only in those circumstances, the respondent was constrained to pass the impugned order under Section 148(A)(d) of the Act. Any educational institution for that matter will hold Fixed Deposits. Further as seen from the subsequent Assessment Years, the same Fixed Deposits running to several crores of Rupees held by the petitioner was also considered and the petitioner institution was also granted an exemption. When in the subsequent Assessment Years viz., Assessment Years 2016-17, 2017-18 and 2018-19, the respondent has accepted that the petitioner is a Section 10(23C)(iiiab) institution entitled for exemption, arbitrarily and by total non application of mind to the said Assessment Orders passed for the subsequent Assessment Years, the respondent has issued the impugned order, dated 30.03.2022 under Section 148A(d) of the Income Tax Act in respect of the Assessment Year 2015-16. Being a very old institution, where several students are studying and huge investments are required for its infrastructure, holding Fixed Deposits running to several crores of Rupees cannot be a ground for r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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