Income Tax Officer (exemptions) cannot Complete Assessment against a Trust who do not avail any IT Exemptions: Patna HC

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In a recent decision, the Patna High Court observed that the Income Tax Officer (Exemption) has no jurisdiction to complete assessment against a Trust who do not avail any tax exemptions under provisions of the Income Tax Act, 1961.

In the instant case, the assessee-Trust was formed with an object of promoting education among the children from poor society. The Income Tax Officer (Exemptions), Muzzafarpur has completed assessment proceedings against the assessee under section 143(3) of the Income Tax Act. The assessee,impugned the above order before the High Court through a Writ petition by contending that the order was passed without jurisdiction since the assessee is neither registered under section 12 nor enjoys any benefit under section 11 of the Act.It was urged that the order is also inconsistent with the provisions of the CBDT Notification 52/2014 dated 22.10.2014.

The division bench comprising of Chief Justice I.A Ansari and Justice Ravi Ranjan pointed out that as per relevant provisions of the above Notification, only the Commissioner of Income Tax (Exemptions) has been vested with the jurisdiction to make assessment under various provisions of the Income Tax Act including section 11 which relates to income from property held for charitable or religious purpose. Therefore, the ITO, in the instant case, has no jurisdiction to pass the order impugned.

Read the full text of the Judgment below.