The Bombay High Court held that reopening of assessments under Section 147 of the Income Tax Act, 1961, based on material already scrutinized during the original assessment, amounts to a mere change of opinion and is impermissible. The Court quashed the reassessment notice issued to the Shri Saibaba Sansthan Trust, Shirdi, citing lack of new tangible material to justify reopening.

Reassessment cannot be initiated under Section 147 of the Income Tax Act without new tangible material. Revisiting previously scrutinized aspects constitutes a change of opinion and violates established legal principles.

Acts and Sections Discussed:

1. Income Tax Act, 1961:

   • Section 147: Reassessment of income escaping assessment.

   • Section 148: Issue of notice for reassessment.

   • Section 115BBC: Taxation of anonymous donations.

   • Section 11: Income from property held for charitable or religious purposes.

   • Section 13: Restrictions on application of income.

   • Section 80G: Deductions for donations.

2. Shri Saibaba Sansthan Trust (Shirdi) Act, 2004:

   • Sections 19 and 21: Utilization and management of trust funds.

Ratio Decidendi:

1. Requirement of Tangible Material: Reopening of an assessment under Section 147 requires fresh tangible material that was not considered during the original assessment.

2. Change of Opinion Doctrine: Revisiting already scrutinized and adjudicated matters constitutes a change of opinion, which is not permissible under the Income Tax Act.

3. Charitable Nature of the Trust: The Court noted that the trust’s activities were consistently recognized as charitable, and its compliance with Section 11 and related provisions was thoroughly reviewed in prior assessments.

1. Introduction and Context (Para 1-2)

The petitioner, Shri Saibaba Sansthan Trust, a public trust constituted under the Shri Saibaba Sansthan Trust (Shirdi) Act, 2004, manages the Sai Baba Temple at Shirdi and engages in charitable activities. The case challenges a notice under Section 148 to reopen the assessment for AY 2014-15.

2. History of the Trust (Para 3-6)

The trust’s formation and objectives focus on the propagation of Shri Sai Baba’s universal religion. The trust has been operational under legal frameworks, including registration under the Bombay Public Trust Act, 1950, and exemptions under the Income Tax Act.

3. Assessment History and Compliance (Para 7-10)

The trust’s income tax returns and related scrutiny assessments were completed without adverse findings. The trust claimed exemptions under Sections 11 and 80G, submitting all requisite documentation.

4. Reassessment Notices and Contentions (Para 11-13)

The trust received reassessment notices for AY 2014-15, based on alleged anonymous donations and non-compliance with Section 11(5). The trust contended that these issues were previously addressed during the original assessment.

5. Objections and Legal Challenge (Para 14-20)

The petitioner objected to the reopening of the assessment, asserting that there was no new material to justify the reassessment. The petitioner argued that the notice was based on a change of opinion, contrary to judicial precedents.

6. Respondent’s Case (Para 21-25)

The Revenue argued that reassessment was justified under Section 147, as the assessment within four years did not require new tangible material. It was further claimed that aspects like anonymous donations were overlooked in the original proceedings.

7. Judicial Analysis and Decision (Para 26-35)

The Court emphasized the doctrine of change of opinion, citing judicial precedents. It held that reassessment requires fresh tangible material and quashed the reassessment notice and proceedings.

Subjects:

Income Tax Law, Charitable Trusts, Reassessment.

Reassessment, Change of Opinion, Anonymous Donations, Section 147, Section 11, Charitable Exemptions.