Institute Management Committee ITI Kalamnuri Vs ITO (ITAT Pune Bench)
Same Question Twice Cannot Create Two Defaults: Penalty u/s 272A(1)(d) Cut by Half
Background: The assessee was a Government institute registered under the Bombay Public Trusts Act, 1950. It provided vocational training & skill-development facilities to students on a “no profit, no loss” basis.
For the years under consideration, the assessee received funds of approximately ₹2.50 crore from the Directorate General of Employment & Training, Shram Shakti Bhawan, under the Ministry of Labour & Employment. The funds were intended for implementing an Institute Development Plan.
Pending utilisation, the funds were invested with the State Bank of India. The assessee earned interest income of ₹27,51,075 for AY 2019-20 & ₹29,07,067 for AY 2018-19. However, it did not file returns of income u/s 139 for the relevant years.
Based on information regarding the interest receipts, the AO reopened the assessments. In response to the notices u/s 148, the assessee filed returns declaring nil income & claimed that the interest income was exempt u/s 10(23C)(iiiab).
Notices Remained Unanswered
During the reassessment proceedings, the AO issued notices u/ss 143(2) & 142(1) calling upon the assessee to furnish information. As the assessee did not comply with those notices, the AO completed the assessments ex parte u/s 147 r.w.s. 144 & 144B, treating the entire interest receipts as income from other sources.
