Viswa Bharati Foundation Trust Vs Chairman (Orissa High Court)
The writ petition challenged the competency, authority, and jurisdiction of the Assessing Officer (AO) in issuing a notice under Section 143(2) of the Income Tax Act, 1961 for the assessment year 2023–24, allegedly without specific approval of the competent authorities and during the subsistence of registration under Section 12AA(2) of the Act. The petitioner, a charitable trust, had been enjoying exemption benefits under Section 12AA. A provisional registration certificate in Form 10AC was granted on 27 May 2021. Owing to an error in the certificate, the petitioner sought correction, which was granted on 7 August 2023, making the registration effective from assessment years 2022–23 to 2026–27.
The petitioner contended that, in light of the corrected registration, its case ought not to have been selected for compulsory scrutiny. Nevertheless, an ex parte assessment order was passed under Section 144 read with Section 144B due to alleged non-participation by the petitioner. Aggrieved, the petitioner filed an application under Section 154 on 29 April 2025, which was rejected by the AO on 18 July 2025 on the ground that no clerical or arithmetical error apparent on record existed.
The petitioner argued that Section 154(3) mandates granting a reasonable opportunity of hearing before disposing of such an application. Although the authority had fixed a personal hearing for 28 July 2025, the rejection order was passed earlier on 18 July 2025, thereby denying the petitioner the scheduled hearing. This action was asserted to be arbitrary and violative of natural justice. The Income Tax Department conceded that the record supported the petitioner’s contention.
