Ahmedabad South Indian Association Charitable Trust Vs DCIT (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by Ahmedabad South Indian Association Charitable Trust challenging the notice dated 08.04.2024 under section 148 and the order of the same date under section 148A(d) of the Income Tax Act, 1961 for AY 2017-18, as well as the assessment order dated 06.03.2026 passed under section 147 read with section 144B. The Trust, eligible for exemption under section 10(23C)(vi), had originally declared nil income and had undergone scrutiny assessment under section 143(3), during which details including remuneration of Rs.42,00,000/- paid to Mr.M.P.Chandran were furnished. In reassessment proceedings, the Revenue determined alleged escapement of income of Rs.3,01,56,352/-. The petitioner submitted that even after excluding the disputed amount from total application of Rs.31,84,16,553/-, application remained at Rs.28,52,60,201/-, exceeding the 85% threshold. The Court noted that utilization was 96.01% according to the petitioner and 86.92% according to the respondent, so the threshold was maintained in either calculation. The Court also considered the Revenue’s failure to account for the comparative utilization and the documentary material furnished by the Trust. Separately, the Court noted that the assessment order dated 06.03.2026 had been passed despite an interim order restraining the Assessing Officer from doing so. The Revenue accepted the mistake but stated that the ITBA portal had no functionality for withdrawing the concluded assessment order. The Court held that section 264 could be invoked by the competent Commissioner to revoke, modify or set aside an order passed in defiance of the Court’s interim orders and that absence of portal functionality was not a valid excuse. On merits, the Court held that the reopening required interference because there would be no escapement of income chargeable to tax even if the disputed Rs.3,01,56,352/- were taken into account. The Court therefore quashed and set aside the impugned notice and order dated 08.04.2024 and the assessment order dated 06.03.2026, and made the Rule absolute.
