Case Law Details
Shree Raj Foundation Vs DDIT (ITAT Mumbai)
ITAT Mumbai held that AO is bound to dispose of the objections filed by the assessee against reopening and give at least four weeks time, from the date of rejection of objection, to assessee to seek any legal remedy. In absence of the same, reopening of assessment is not legally sustainable.
Facts- The assessee is a trust registered as a Charitable Trust with Charity Commissioner and having registration u/s 12A.
Original Assessment u/s 143(3) of the Act was completed on 27.12.2011 accepting the income at nil. Subsequently, the assessment was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act. Reasons recorded for reopening assessment was that exemption of income claimed by assessee u/s 11 of the Act was to be denied, since assessee was advancing/disbursing loans not in accordance to CBDT Circular No.100 of 1973 and not as per the object of assessee, therefore according to AO, it was colorable device to avoid taxation and therefore there was escapement of income. So, he reopened the assessment.
The assessee objected to the reopening by filing letter dated 23.01.2014. However, the AO passed the re-assessment order on 07.03.2014 computing the income of assessee at Rs.5,56,16,1 18/- in place of nil returned by assessee and accepted in scrutiny assessment dated 27.12.2011.
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