RAJARSHI SHAHU SHIKSHAN SANSTHA INAM DHAMANI,SANGLI vs. ITO EXEMPTION, KOLHAPUR, KOLHAPUR

ITA 1125/PUN/2024Status: DisposedITAT Pune18 December 2025AY 2016-1731 pages
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What did the Tribunal hold?

The Tribunal held that the reassessment proceedings were not validly initiated. The Assessing Officer (AO) recorded reasons for reopening the assessment, suggesting that donations should be taxed under section 68 of the Act due to the assessee's inability to explain the nature and source of the sums. However, during the reassessment proceedings, despite objections from the assessee, the AO ultimately made additions under section 115BBC of the Act. The Tribunal found that the addition was made on a ground different from the one specified in the reasons recorded for reopening. This discrepancy, where the reassessment was initiated referencing section 68 but concluded with additions under section 115BBC, rendered the reassessment proceedings invalid and lacking proper jurisdiction. The Tribunal relied on judicial precedents, including decisions from the Bombay High Court and the Supreme Court, which emphasize that reassessment proceedings must be based on the reasons recorded and that additions cannot be made on grounds not specified in the reopening notice. Consequently, the impugned order was set aside. The Tribunal also noted that since the assessee succeeded on the legal grounds, dealing with the remaining grounds would be academic.

What were the facts?

The assessee, Rajarshi Shahu Shikshan Sanstha, is an educational charitable organization. For Assessment Years (AYs) 2012-13 to 2017-18, the assessee filed returns declaring nil income. The original assessment for AY 2012-13 was completed under section 143(3) on March 25, 2015, assessing total income at nil. Subsequently, the Assessing Officer (AO) initiated reassessment proceedings under section 147, citing a survey conducted on February 13, 2019. During the survey, it was observed that the assessee had not maintained books of account for certain financial years and details of donors for FY 2012-13. Some donors denied giving donations. The AO initially proposed to tax donations under section 68 but ultimately made additions under section 115BBC. The assessee challenged the reassessment proceedings before the CIT(A), who confirmed the additions. The assessee has appealed these orders to the ITAT.

What were the issues?

1. Whether the reassessment proceedings were validly initiated and completed, considering the AO assumed jurisdiction to tax sums under section 68 based on reasons recorded and approval given, but ultimately made additions under section 115BBC, which is a different ground for which notice under section 148 was issued? (Question of law, concerning Section 147 and Section 148 of the Income Tax Act, 1961). Assessee's contention: The reassessment is invalid because the addition was made under section 115BBC, while the reasons recorded and approval for reopening were based on section 68. This constitutes a change of ground and renders the reassessment unsustainable. Reliance is placed on decisions like Lark Chemicals Pvt Ltd (Bombay High Court) and Kelvinator India Ltd (Supreme Court). Revenue's contention: Not recorded in the judgment. 2. Whether the reassessment proceedings were initiated beyond the time limit, specifically more than four years after the end of AY 2012-13, without any failure on the part of the assessee to disclose material facts fully and truly? (Question of law, concerning Section 147 of the Income Tax Act, 1961). Assessee's contention: The reassessment was initiated after the expiry of four years from the end of AY 2012-13, and there was no failure to disclose material facts, making the proceedings time-barred and bad in law. Reliance is placed on Hindustan Lever Ltd (Bombay High Court). Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 68,Section 115BBC,Section 133A

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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeals at the instance of assessee pertaining to A.Ys.2012-13 to 2017-18 are directed against the separate orders dated 20.03.2024 framed by ld.CIT(A), Pune-11 emanating out of respective Assessment Orders dated 24.12.2019 passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 (in short ‘the Act').

2.

The issues raised by the assessee in the instant batch of appeals are common. We therefore proceed to adjudicate these appeals by this consolidated order for the sake of convenience and brevity.

3.

We will first espouse ITA No.1121/PUN/2024 for A.Y. 2012-13 as the lead case.

The order continues below.

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