Case Note & Summary
The petitioner, Sir Jamsetjee Jejeebhoy Charity Fund, a charitable trust registered under Section 12A of the Income Tax Act, 1961, filed a writ petition before the Bombay High Court challenging notices dated 9 August 2024 and 20 August 2024 issued under Section 148A(b), the order dated 28 August 2024 under Section 148A(d), and the notice dated 28 August 2024 under Section 148, all pertaining to Assessment Year 2018-2019. The trust had filed its return of income for AY 2018-19 declaring total income of Rs.1,96,983/- and claiming exemption under Section 11. It submitted Form 10 stating an accumulation of Rs.3,17,00,000/- for the purposes of medical, educational and social relief to the Zoroastrian community and conservation, maintenance and upkeep of properties until 31 March 2023. The case was selected for scrutiny on the issue of accumulation of income, and after detailed inquiry including notices under Sections 143(2) and 142(1), the assessment was completed under Section 143(3) on 15 February 2021 accepting the accumulation. Subsequently, the Assessing Officer issued the impugned notice under Section 148A(b) alleging that the trust had failed to specify in Form 10 the particular purpose for which the income was being accumulated, as required by Section 11(2)(a), and proposing to disallow the accumulation. The trust responded by arguing that the reopening was merely a change of opinion, that Form 10 had limited space and the accompanying resolution provided full details. The Assessing Officer, in the order under Section 148A(d), rejected these contentions, relying on internal audit objections and holding that the trustees' resolution was passed on 28 January 2020 after the scrutiny notice, and that Form 10 had ample space to specify the purpose. The court’s final reasoning and decision are not included in the provided text.
Headnote
A) Taxation - Charitable Trust - Accumulation of Income - Income Tax Act, 1961, Section 11(2) - The Assessing Officer issued notice under Section 148A(b) alleging that the trust did not specify the particular purpose for accumulation in Form 10, merely repeating trust objects, and proposed to disallow accumulation of Rs.3,17,00,000/-. The trust contended that the resolution specified purposes and Form 10 had limited space, and the issue was already examined in scrutiny assessment. The court's final holding is not available in the provided text (Paras 3(ix)-(xv)).
Issue of Consideration
Whether the notice under Section 148A(b) and order under Section 148A(d) reopening assessment for AY 2018-19 on the ground of failure to specify particular purpose in Form 10 for accumulation under Section 11(2) is valid when the issue of accumulation was previously examined in scrutiny assessment; whether reliance on internal audit objections constitutes a mere change of opinion
Law Points
- requirement under Section 11(2) to specify purpose in Form 10 for accumulation of income
- audit objection as basis for reopening
- change of opinion bar on reassessment
