SATISH CHANDRA, J. - (1.) BOTH the appeals have been filed by the Department against the common judgment and order dated 30.06.2005 passed by the Income Tax Appellate Tribunal, Lucknow in Second Appeal Nos. 455/Luc/2001 and 457/Luc/2001, for the assessment years mentioned above.
(2.) ON 28.11.2005, both the appeals were admitted by a Coordinate Bench on the following substantial question of law: - "Whether on the facts and in the circumstances of the case the learned Income Tax Appellate Tribunal was right in holding the proceeding initiated u/s 147 were invalid only on the basis of the fact that the AO had not recorded his satisfaction that he has reason to believe that the income chargeable to tax escaped assessment and notice u/s 148 be issued for reopening the case for A.Y. 1994 -95 while the basis of belief that income had escaped assessment was duly brought on record." The brief facts of the case are that the assessee is a registered society under the Societies Registration Act, 1860 since 1934 -35. By examining the objects, it was observed by the Department that the same are charitable in nature. So, the registration under Section 12A of the Act was granted. The Department has also granted an approval under Section 80G of the Act for the assessment year 1997 -98 onwards. The assessee was also exempted from the clutches of the tax under Section 10(23C)(iv) of the Act upto the assessment year 1993 -94. For the assessment years under consideration, at the relevant time, the exemption was not available. In these circumstances, the assessee has filed the returns by showing "NIL" income. So, the AO has issued notice under Section 148 of the Act. On 21.05.1998, the assessee has filed the reply and again has shown "NIL" income. So, the AO has made the re -assessment under Section 147 of the Act and brought the total income to the tax. The First Appellate Authority has given a partial relief. Being aggrieved, both the parties have filed second appeals before the Tribunal, who vide impugned order has dismissed the departmental appeal and allowed the assessee's appeal. Thus, the total exemption was granted to the assessee. Still being aggrieved, the Department has filed the present appeals.
(3.) WITH this background, Sri D.D. Chopra, learned Standing Counsel for the Income -tax Department justified the impugned order passed by the AO. He also submits written submissions.;