Rajarshi Shahu Shikshan Sanstha Vs ITO (Exemption) (ITAT Pune)
Reopening for Section 68 but Taxing u/s 115BBC Is Jurisdictional Mismatch: Pune ITAT Quashes Reassessments of Educational Trust
Pune ITAT, ‘B’ Bench, in Rajarshi Shahu Shikshan Sanstha Vs ITO (Exemption) (ITA Nos.1121 to 1126/PUN/2024; AYs 2012-13 to 2017-18; order dated 18-12-2025), allowed the assessee-trust’s appeals and quashed the reassessment proceedings u/s 147 on a pure jurisdictional ground, without entering into merits of anonymous donations.
The Tribunal noted that the reasons recorded for reopening were exclusively founded on section 68, alleging unexplained cash credits on the footing that donors had denied making donations and that sources were not proved. Throughout the reasons, objections stage and show-cause notices, the AO’s clear and consistent belief was escapement of income u/s 68. However, while concluding the reassessment, the AO abandoned section 68 altogether and made additions by re-characterising the very same donations as “anonymous donations” u/s 115BBC, a provision which was never part of the recorded reasons nor sanctioned at the stage of reopening.
The Tribunal held that sections 68 and 115BBC operate in completely different fields—section 68 deals with unexplained credits not recorded as income, whereas section 115BBC applies to donations already credited as income but lacking prescribed donor particulars. Substituting one provision for the other at the stage of reassessment amounts to a fundamental change in the basis of escapement, which is impermissible in law. Reopening must stand or fall strictly on the reasons recorded, and jurisdiction cannot be salvaged by invoking a new charging mechanism midstream.
Relying on CIT vs Jet Airways (Bom HC), PCIT vs Lark Chemicals (SC), Dhruv Parulbhai Patel (Guj HC) and Hindustan Lever Ltd., the ITAT rejected the Revenue’s reliance on Explanation 3 to section 147, holding that it cannot cure a case where the very foundation of reopening collapses. Since no addition was ultimately made on the ground for which reopening was initiated, the entire reassessment was held to be void ab initio.
Accordingly, the reassessment orders for AYs 2012-13 to 2017-18 were quashed in toto, rendering all additions u/s 115BBC academic. The decision decisively reinforces that reassessment cannot travel on one reason and land on another, and that section 115BBC cannot be pressed into service without a valid and specific assumption of jurisdiction
FULL TEXT OF THE ORDER OF ITAT PUNE
