PRAKASH KRISHNA, J. - (1.) BY means of the present petition, the petitioner has challenged the legality and validity of notice issued under section 148 of the Income Tax Act as also sought a writ in the nature of certiorari for quashing the order dated 11th of November, 2010 whereby the objection against the aforesaid notice has been dismissed. A further writ of mandamus directing the Additional Commissioner of Income Tax Range -II, Muzaffarnagar to drop the reassessment proceedings against the petitioner for the Assessment Year 2006 -2007 has been sought for.
(2.) THE background facts may be noticed in brief. The petitioner claims that it is a charitable trust formed on 26th of October, 1980 and registered as public charitable trust with aim object to impart education in medical, dental, para medical sciences etc. by providing educational institutions, running of hospital for providing medical relief to the needy, to receive and give donation from/to any institution or individual for fulfilment of object of the trust. The dispute relates to the Assessment Year 2006 -2007, under the Income Tax Act. The petitioner is registered under section 12A of the Income Tax Act and Sections 11 and 12 of the Act are applicable to the income derived by it. For the Assessment Year 2006 -2007 it filed its return of income on 31st of October, 2006 disclosing the donations received as Rs.5,23,00,000/ -. The taxable income was declared nil. Proceedings for assessment under section 143(3) of the Income Tax Act was initiated for the relevant Assessment Year. The petitioner alleges that as many as five show cause notices were issued by the Assessing Authority which were duly replied. Thereafter, the assessment was completed by the order dated 27th of March, 2008. During the course of the assessment proceedings, the petitioner revised its return of income. The further allegation is that the proceedings under section 12A for cancellation of registration of the petitioner as charitable trust was also undertaken by the Commissioner of Income Tax who subsequently by the order dated 25.1.2008 dropped it. Thereafter, the petitioner was served with the impugned notice dated 19th of April, 2010 along with the reasons for issuing notice under section 148 of the Act.
(3.) CHALLENGING the same, the present writ petition has been filed. In the counter affidavit filed on behalf of the department, the action of initiation of reassessment proceeding has been justified by taking various legal and factual pleas. One of the pleas raised is that the petitioner has equally efficacious remedy of appeal, if any, assessment order is finally passed against it. On merits, the submission is that there is sufficient material in possession of the department to hold that the income of the petitioner has escaped the assessment. The assessment order was passed without taking into consideration the full facts. The Assessing Officer has failed to make the necessary inquiries with regard to the source of corpus receipt by the petitioner as donation. The donor trust M/s. Nav Jyoti Vikas Sansthan who is alleged to have given donation to the petitioner assessee has no financial capacity to make such a huge donation. This fact came into surface during the assessment proceedings of one M/s. Bankey Bihari Educational Trust. The Additional Commissioner of Income Tax, Ghaziabad noticed that M/s. Nov Jyoti Vikas Sansthan paid a sum of Rs.15 Lakhs as donation to M/s. Bankey Bihari Educational Trust. On inquiry, it was noticed that M/s. Nav Jyoti Vikas Sansthan has no financial capacity to make any donation. The transaction was in the nature of accommodation entries and the donation given by M/s. Nav Jyoti Vikas Sansthan is not genuine. After conducting a detailed inquiry, it was found that the income of the petitioner has escaped assessment. The reassessment proceedings against the petitioner was set to motion on the basis of the relevant material and the said material has a nexus to the escapement of the income of the petitioner.;