CIT Vs Sinhgad Technical Education Society (Supreme Court of India)
The Supreme Court of India dismissed four appeals filed by the Revenue concerning the validity of proceedings initiated under Section 153C of the Income-tax Act, 1961 for Assessment Years 2000-01 to 2003-04. The appeals arose from a common judgment of the High Court dated March 25, 2015, which had upheld the order of the Income Tax Appellate Tribunal (ITAT) quashing the Section 153C notices.
The case originated from a search and seizure operation conducted on July 20, 2005, under Section 132 on the president of an educational society and his wife. Certain documents were seized, which, according to the Revenue, contained notings relating to alleged collection of capitation fees by institutions run by the society. Relying on these documents, the Assessing Officer (AO) recorded a Satisfaction Note on April 18, 2007, and issued notices under Section 153C to the assessee for multiple assessment years. Subsequent proceedings included cancellation of the trust’s registration under Section 12AA, a special audit under Section 142(2A), and assessment orders covering eight assessment years from 1999-2000 to 2006-07.
The AO assessed substantial taxable income, denied exemption under Sections 11 and 12, and treated the assessee as an Association of Persons. While the Commissioner (Appeals) partly allowed the assessee’s appeal, the denial of exemption was upheld. Before the ITAT, the assessee raised an additional ground challenging the validity of the Section 153C notices on jurisdictional grounds, arguing that the statutory preconditions were not satisfied and that the notices were time-barred for certain years.
