Aark India Educational Charitable Trust Vs ITO (ITAT Chennai)
Chennai ITAT quashed the re-assessment u/s 147 for AY 2012-13 in the case of a charitable trust registered u/s 12AA, holding the order barred by limitation u/s 153(2).
The AO had reopened the case based on a survey u/s 133A, alleging that ₹6.19 crore advances received from erstwhile trustees (reflected in FY 2010-11) were converted into corpus in FY 2011-12, leading to escapement of income. Notice u/s 148 was issued on 27.03.2019. The proceedings were stayed by the High Court on 16.09.2019 and the stay was vacated on 30.03.2021. However, the AO passed the re-assessment order only on 10.09.2021.
ITAT rejected Revenue’s plea that limitation should be computed from the date of communication of the High Court order. Relying on Explanation 1(ii) to s.153 and settled law, it held that limitation recommences from the date the stay is vacated, irrespective of communication. After excluding the stay period, the AO ought to have completed assessment on or before 15.07.2021. The order dated 10.09.2021 was therefore clearly time-barred.
CBDT COVID-related extensions do not override statutory limitation u/s 153(2). Consequently, assessee’s appeal allowed on limitation, and Revenue’s appeal dismissed as infructuous
FULL TEXT OF THE ORDER OF ITAT CHENNAI
