The CIT (A) considered the question of addition of Rs.41,08,724/- by AO under Section 68 of the Act and have recorded findings that if in the previous years the agricultural income from the same land on which agricultural crops were produced by the appellant was accepted
Honorable Allahabad High Court approves the special bench judgment in the case of Merilyn Shipping and Transport Ltd. and held that disallowance u/s. 40(a)(ia) applies only to amounts ‘payable’ as of 31st March and not to amounts already ‘paid’ during the year.
Assessee as an honest citizen not only made a complaint to the registering authority that the sale deed has been registered at a value much below the amount, which he has actually received, he deposited the entire amount in the bank and voluntarily filed return.
The income tax authorities are required to administer the Act. The right to administer, cannot obviously include the right to mal-administer. Thus, we find no words to express anguish as what kind of governance it had been.
The partnership is governed under the provisions the Indian Partnership Act, 1932. Section-4 defines partnership as “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”. Section-5 provides that the relation of the partnership may be reduced in writing through a contract between them while Section-7 provides that where there is no written contract, the partnership be treated as partnership at will.
The preponderance of the judicial opinion of all the High Court including this Court is that at the time of registration under Section 12AA of the Income Tax Act, which is necessary for claiming exemption under Section 11 and 12 of the Act, the Commissioner of Income Tax is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of establishing educational institution, is in the process of establishing such institutions, and receives donations, the registration under Section 12AA cannot be refused, on the ground that the Trust has not yet commenced the charitable or religious activity.
For the reasons given above, we find sufficient force in the argument of the learned counsel for the petitioner that on the basis of the reasons recorded by the Assessing Officer, the initiation of the reassessment proceedings relevant to the Assessment Year 2000-2001 by means of the notice dated 23.3.2007 after more than four years is clearly barred by time.
Section 80G(5)(i)(b) provides the condition for exemption or rejection of the application for renewal, if the donation made to the institution or funds are not used by it directly or indirectly for the purpose of such business. In the present case the Commissioner did not record any such finding that the funds, which was earmarked and was kept in separate account in fixed deposit was not used by the respondent assessee directly or indirectly. Infact there was no occasion to misuse the funds as the hospital had not yet started and thus the plant and machinery could not be purchased from the grant, which was kept in fixed deposit.
In the result, the writ petition succeeds and is allowed. The respondents are directed to refund in all Rs.25 Lakhs seized from the petitioners on 17th of October, 2006 along with interest at the prevalent rate as provided for under section 132 B(4) for the period 16.12.2007 to 31.12.2008 and simple interest under section 244A on the said amount of Rs.25 Lakhs from 1st of January, 2009 to the date of actual payment at the rate of 18 per cent per annum within a period of two months, failing which they shall also be liable to pay the interest on interest amount @ 6 % per annum, as indicated above.
On a query put by the Court, learned counsel for the assessee accepts if the recourse to Section 143(3) would have been barred by time, there would have been no restriction to initiate the re-assessment proceeding under Section 147 of the Act. We may add that there is nothing on the plain language of Section 143 of the Act which may suggest that the recourse to Section 147 can be had only when the period of limitation to complete assessment proceeding has expired or the Assessing Authority should wait for the expiry of the said period. The said argument is ridiculous and not acceptable.
