Case Law Details
Framji Dinshaw Petit Parsee Sanatorium Vs ITO (Bombay High Court)
Bombay High Court held that reassessment proceedings, in absence of any failure to disclose any material fact and without any new tangible material which was not available at the time of passing of the original assessment order, is unsustainable.
Facts- The Petitioner is a Public Charitable Trust registered u/s. 12A of the Income Tax Act. Petitioner addressed a letter to the Assistant Director of Income-tax (Exemptions) I-(2) informing him that they would not be able to utilise 85% of the accumulated income for the year towards the expenditure on the objects of the trust and therefore, may be allowed to exercise the option u/s. 11(1) of the Act to spend the unspent surplus in the next twelve months.
The Petitioner filed its ROI for A.Y. 2008-09 declaring ‘Nil income’. Rs. 89,17,868/- was claimed by the Petitioner being 15% of the gross income as deduction allowable u/s. 11 of the Act. A sum of Rs. 13,21,686/-was also claimed as depreciation. Since the amount expended on the object of the Petitioner Trust was more than the income, the Petitioner claimed deficit of Rs. 13,92,05,087/- as carry forward to be set off in the subsequent year. The Petitioner received notice u/s. 142(1) of the Act.
Later on, by an order u/s. 143(3) of the Act, A.O. accepted returned income offered by the Petitioner. Thereafter, the Petitioner received notice u/s. 148 of the Act. In response to the impugned notice, the Petitioner sought a copy of the reasons for issuance of the notice u/s. 148 of the Act and out of abundant caution also filed a copy of the income tax return for A.Y. 2008-09 alongwith copy of the computation of income and financial statements.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
