ITO, UDAIPUR V. M/s. Vidyadan Trust, UDAIPUR

ITA 64/JODH/2013

• Counselvise Citation: 6423314 RSA 2013
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Assessee Lawyers: CHANDRA RAM
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 12A; 10B; 148; 263; 11

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS.64 & 155/JODH/2013 (A.Y. 2004-05 & 2006-07) ITO, WARD-1(4), VS. M/S. VIDYADAN TRUST, UDAIPUR, CITY PALACE, UDAIPUR. (APPELLANT) (RESPONDENT) PAN NO. AAAV0518R ITA NOS.60 & 281/JODH/2013 (A.Y. 2006-07 & 2008-09) ACIT, CIRCLE-1, VS. MAHARANA OF MEWAR UDAIPUR. CHARITABLE FOUNDATION CITY PALACE, UDAIPUR. (APPELLANT) (RESPONDENT) PAN NO. AAATM1440NS ASSESSEE BY : SHRI CHANDRA RAM DEPARTMENT BY : DR. DEEPAK SEHGAL, CIT- DR DATE OF HEARING : 27/08/2013. DATE OF PRONOUNCEMENT : /08/2013. O R D E R PER N.K.SAINI, A.M THESE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAIN ST THE SEPARATE ORDERS OF LD. CIT (A), UDAIPUR DATED 30/11 /2012 & 31/12/2012 FOR THE A.Y. 2004-05 & 2006-07 RESPECTIVELY IN THE CASE OF M/S. VIDYADAN 2 TRUST AND DATED 30/11/2013 & 07/02/2013 FOR THE A.Y . 2006-07 & 2008- 09 RESPECTIVELY IN THE CASE OF MAHARANA OF MEWAR CH ARITABLE FOUNDATION. SINCE THE ISSUES INVOLVED IN ALL THESE APPEALS ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, SO, THESE ARE BEING DI SPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE WILL DEAL WITH ITA NO. 64/JODH/2013 FOR T HE A.Y. 2004-05 IN THE CASE OF ITO VS. M/S. VIDYADAN TRUST . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN 1. QUASHING THE REOPENING PROCEEDING INITIATED U/S 148 OF THE IT ACT. AND THE ASSESSMENT PASSED U/S 143(3) R.W.S. 147 OF THE I.T.ACT IGNORING THE FACTS THAT FOUR TRUSTS INCLUDING THIS TRUST ARE SEPARATE LEGAL ENTITIES WITH SEPARATE PANS & SEPARATE REGIST RATION WITH ASSTT. COMMISSIONER OF DEVASTHAN, UDAIPUR AND THEREFORE, T HESE CANNOT BE ASSESSED TO TAX IN NAME OF ONE TRUST. 2. IGNORING THE FACT THAT IN INCOME TAX PROCEEDING THE PRINCIPAL OF RES- JUDICATA DOES NOT APPLY. 3. FROM THE ABOVE GROUNDS, IT IS CLEAR THAT THE ONLY GRIEVANCE OF THE DEPARTMENT RELATES TO QUASHING OF THE REOPENING OF THE PROCEEDINGS INITIATED BY THE AO U/S 148 OF THE I.T. ACT, 1961 ( HEREINAFTER REFERRED TO AS ACT, FOR SHORT) AND THE ASSESSMENT U/S 143 (3) OF THE ACT PASSED THEREAFTER. 4. THE FACTS OF THIS CASE IN BRIEF ARE THAT ASSESSEE FILED ITS RETURN OF INCOME ON 29/10/2004 DECLARING AN INCOME OF RS. 62, 666/-, WHICH WAS 3 PROCESSED UNDER SECTION 143(1) OF THE ACT ON 04/10/ 2005 AT RETURNED INCOME. THEREAFTER, CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER ISSUED A DETAILED QUESTIONNAIRE DATED 29/06 /2006. THE ASSESSEE FURNISHED REPLY ON 10/07/2006, BOOKS OF ACCOUNTS AN D DOCUMENTS WERE ALSO PRODUCED. IT WAS STATED THAT ASSESSEE IS A UN IT OF M/S. MAHARANA OF MEWAR CHARITABLE FOUNDATION (HEREINAFTER REFERRED T O AS MMCF, IN SHORT), COPY OF THE TRUST DEED OF THE FOUNDATION WA S SUBMITTED. IT WAS ALSO STATED THAT THERE WAS NO SEPARATE REGISTRATION UNDER SECTION 12A OF THE ACT IN RESPECT OF ASSESSEE, BUT IT WAS COVERED BY THE REGISTRATION GRANTED TO THE FOUNDATION (COPY OF WHICH WAS FURNIS HED). THE ASSESSING OFFICER AFTER DETAILED SCRUTINY, VERIFICATION, EXAM INATION AND SATISFACTION MADE AN ASSESSMENT ON 14/07/2006 U/S 1 43(3) OF THE ACT HOLDING THAT INCOME AND EXPENDITURE OF THE ASSESSEE HAS BEEN CONSIDERED IN THE HANDS OF MMCF. THE ASSESSING OFF ICER ALSO NOTED IN THE FINAL PARA OF THE ASSESSMENT ORDER DATED 14/07/ 2006 AS UNDER:- IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, WR ITTEN SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE AND DISCUSSION MADE WITH HIM AND IN VIEW OF PAST HISTORY OF THE CA SE PROCEEDINGS IN THIS CASE ARE DROPPED. 5. LATER ON, ASSESSING OFFICER OBSERVED THAT THE ASSES SEE HAD A SEPARATE ENTITY, SEPARATE PAN AND SINCE IT IS NOT R EGISTERED U/S 12A(A) OF THE ACT, HENCE, ITS INCOME WAS NOT EXEMPT. HE, THE REFORE, FOUND THAT 4 INCOME OF THE ASSESSEE ESCAPED ASSESSMENT AND ISSUE D NOTICE U/S 148 OF THE ACT BY RECORDING THE FOLLOWING REASONS:- AS PER RETURN GROSS RECEIPTS OF THE TRUST WERE R S. 1,33,61,401/-. ON PERUSAL OF SUBMISSION OF THE ASS ESSEE DATED 12/07/2006 THE ASSESSEE M/S. VIDYADAN TRUST H AS NOT APPLIED SEPARATELY FOR REGISTRATION U/S. 12(A). AS PER ORDER U/S. 143(3) DATED 14/07/2006 THE INC OME AND EXPENDITURE OF M/S. VIDYADAN TRUST HAS BEEN CON SIDERED IN THE HANDS OF M/S MAHARANA OF MEWAR CHARITABLE FOUNDATION AS CLAIMED BY THE ASSESSEE. SINCE THE ASSESSEE HAS A SEPARATELY ENTITY, SEPAR ATE PAN AND SINCE HE HAS NOT REGISTERED U/S. 12A(A) HENCE I NCOME OF THE TRUST IS NOT EXEMPT. HENCE NOTICE U/S. 148 IS HEREBY ISSUED. 6. ACCORDINGLY, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 29/03/2011. IN RESPONSE TO THE SAME, ASSESSEE FILED OBJECTION O N 27/04/2011 BY STATING THAT NOTICE ISSUED U/S 148 OF THE ACT WAS B ASED ON CHANGE OF OPINION. THE ASSESSING OFFICER DID NOT ACCEPT THE O BJECTION OF ASSESSEE AND FRAMED THE ASSESSMENT AT AN INCOME OF RS. 27,11 ,410/-. 7 . ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE PLACED BEFORE THE AO PRIMARY, RELEVANT MATERIAL AND NECESSARY FACTS, WHICH WERE FULLY SCRUTINIZED, EXAM INED, VERIFIED AND AFTER SATISFACTION, ASSESSMENT U/S. 143(3) OF THE A CT WAS FRAMED ON 14/07/2006 BY HOLDING THAT THERE WAS NO SEPARATE EX ISTENCE OF THE ASSESSEE AND BEING A UNIT OF MMCF, ITS INCOME AND E XPENDITURE HAS TO BE CONSIDERED IN THE HANDS OF THE FOUNDATION. THE SAI D VIEW WAS IN ACCORD 5 WITH THE VIEW EXPRESSED BY THE PREDECESSOR OF THE A SSESSING OFFICER, SINCE THE COMMENCEMENT OF THE FOUNDATION FROM THE A SSESSMENT YEAR 1976-77 ONWARDS. IT WAS FURTHER SUBMITTED THAT FOR THE A.Y. 2003-04, ASSESSEE CHALLENGED THE ORDER OF ASSESSING OFFICER PASSED U/S 143(3)/147 OF THE ACT BEFORE LD. CIT(A), WHO VIDE ORDER DATED 13/11/2009 IN APPEAL NO. 422/IT/UDR/2007-08 CONSIDERED THE FACTS SINCE C OMMENCEMENT OF THE FOUNDATION AND CAME TO THE CONCLUSION THAT ASSE SSEE-TRUST CONSISTED OF FOUR SECTIONS, NAMELY, MUSEUM SECTION, MAHARANA MEWAR RESEARCH INSTITUTE, MAHARANA MEWAR EDUCATIONAL TRUST AND PUB LICATION TRUST. HE OBSERVED THAT THOUGH MAHARANA MEWAR PUBLIC SCHOOL W AS NOT HOLDING EXEMPTION U/S 10(23C)(VI) OF THE ACT STILL IT WOULD NOT EFFECT IN CLAIMING EXEMPTION U/S 11 IN THE CASE OF ASSESSEE-FOUNDATION BEING MAHARANA MEWAR PUBLIC SCHOOL, A UNIT OF THE FOUNDATION. IT WAS STATED THAT THE SAID FINDING THAT ALL THE FOUR SECTIONS WERE OF THE FOUNDATION WAS NOT CHALLENGED BY THE REVENUE AND STOOD ACCEPTED. IT W AS FURTHER STATED THAT THE CHIEF COMMISSIONER OF INCOME-TAX, UDAIPUR AFTER VERIFICATION AND SATISFACTION THAT MAHARANA MEWAR PUBLIC SCHOOL IS A UNIT OF THE FOUNDATION ACCORDED EXEMPTION U/S 10(23C)(VI) ON 30 /07/2007. THUS, THE FACTUM OF DIFFERENT UNITS/ DIVISIONS/SECTIONS/B RANCHES BEING UNITS/DIVISIONS/SECTION/BRANCHES OF THE FOUNDATION STOOD DULY APPROVED BY THE CHIEF COMMISSIONER OF INCOME TAX. IT WAS CO NTENDED THAT THE ASSESSMENT OF THE FOUNDATION WAS MADE U/S 143(3) OF THE ACT ON 6 20/12/2007, WHEREIN INCOME OF THE ASSESSEE I.E. M/S . VIDYADAN TRUST WAS CONSOLIDATED AND CONSIDERED IN THE HANDS OF THE FOUNDATION (MMCF) AFTER HOLDING THAT IT IS THE EDUCATIONAL UNIT OF TH E FOUNDATION AND WAS NOT SEPARATELY ASSESSED, HENCE, THE RETURN FILED BY THE ASSESSEE WAS VACATED AND NO NOTICE U/S 143(2) WAS ISSUED. THUS , IT STOOD ESTABLISHED THAT THE VIEW EXPRESSED BY THE ASSESSING OFFICER FO R THE YEAR UNDER CONSIDERATION WAS IN ACCORD WITH THE LAW AND CONSIS TENT VIEW OF THE HIGHER AUTHORITIES AND THE ASSESSING OFFICERS. 8. THE ASSESSEE ALSO MADE THE SUBMISSIONS BEFORE THE LD. CIT(A) AS MENTIONED AT PAGES NO. 12 TO 15 OF THE IMPUGNED ORD ER, WHICH ARE REPRODUCED AS UNDER:- (I) FACTUM OF THE GROSS RECEIPTS OF THE TRUST OF R S. 1,33,61,401/- AS DULY DISCLOSED BY THE ASSESSEE IN THE CONSOLIDATED STATEMENT OF INCOME AND EXPENDITURE SUBMITTED WITH THE RETURN. IT IS NOT A NEW FACT. (II) THE LD. ASSESSING OFFICER HAS ADMITTED THAT ON PERUSAL OF THE REPLY DATED 12.7.2000, THE ASSESSEE HAS NOT APP LIED SEPARATELY FOR REGISTRATION U/S.12A. AS STATED HER EIN ABOVE, IT WAS CLEARLY STATED BY THE ASSESSEE VIDE P ARA 2 THAT THERE IS NO SEPARATE REGISTRATION U/S.12A IN R ESPECT OF VIDYADAN TRUST AND A COPY OF REGISTRATION U/S.12 A GRANTED TO MAHARANA OF MEWAR CHARITABTE FOUNDATION WAS ENCLOSED. IT MAY BE MENTIONED THAT THIS FACT W AS DULY DISCLOSED BY THE FOUNDATION IN ASSESSMENT PROCEEDINGS OF THE FOUNDATION FOR THE ASSESSMENT YE AR 1976-77 AND IT WAS HELD THAT NO SEPARATE REGISTRATI ON IS REQUIRED AS IT IS AN UNIT OF THE FOUNDATION. SAME F ACT WAS KNOWN TO THE SUCCESSIVE ASSESSING OFFICERS RIGHT UP TO THE ASSESSMENT YEAR 2005-06 AND ONWARDS. ALL THE PREDECESSORS WERE AWARE OF AND WERE OF THE UNANIMOU S 7 VIEW THAT 12A REGISTRATION GRANTED TO THE FOUNDATIO N IS SUFFICIENT AND NO SEPARATE REGISTRATION U/S.12A IS REQUIRED BY THE VIDYADAN SECTION OF THE FOUNDATION. IT MAY ALSO BE MENTIONED THAT WHILE GRANTING APPROVAL U/S.L0(23C)(VI) OF THE ACT, IT WAS IN THE KNOWLEDGE OF THE HON'BLE CHIEF COMMISSIONER OF INCOME-TAX AND THE APPROVAL WAS GRANTED TO THE FOUNDATION FOR THE VIDY ADAN UNIT. WE SUBMIT ON THE FACTS, IN TOTALITY OF CIRCUMSTANCES AND IN THE LIGHT OF THE TREATMENT GIV EN BY THE INCOME-TAX DEPARTMENT SINCE ASSESSMENT YEAR 197 6- 77, THE CLAIM OF THE SUCCESSOR THAT AS IT HAS NOT A PPLIED SEPARATELY FOR REGISTRATION U/S.12A IS ASSESSABLE SEPARATELY IS ON CHANGE OF OPINION AND ERRONEOUS. (III) THE LD. ASSESSING OFFICER HAS ADMITTED IN CLE AR WORDS THAT IN THE ORDER U/S.143(3) DATED 14.7.2006, THE INCOME AND EXPENDITURE OF VIDYADAN SECTION HAS BEEN CONSIDERED IN THE HANDS OF M/S. MAHARANA OF MEWAR CHARITABTE FOUNDATION. WE SUBMIT THE SAID ACT WAS AFTER CONSIDERING THE REPLY DATED 10.7.2006, ON APPLICATI ON OF MIND AND IN ACCORD WITH THE LAW. (IV) THE LD. ASSESSING OFFICER HAS JUMPED AND ARRIV ED AT A FINDING THAT VIDYADAN SECTION HAS A SEPARATE ENTITY . WE SUBMIT THERE IS NO MATERIAL IN SUPPORT OF SUCH A FI NDING. IT IS WITHOUT MATERIAL AND CONTRARY TO THE MATERIAL ON RECORD. ON PERUSAL OF THE REPLY DATED 10 TH JULY, 2006, IT IS APPARENT AND THE ASSESSEE HAS CLEARLY STATED THAT I T IS AN UNIT OF MAHARANA OF MEWAR CHARITABTE FOUNDATION AND HAS SUBMITTED THE TRUST DEED OF THE FOUNDATION. THE RE IS NO SEPARATE TRUST DEED BROUGHT ON RECORDS BY THE LE ARNED ASSESSING OFFICER . IN FACT THERE IS NONE. THE BURDEN TO PRODUCE WAS ON THE LEARNED ASSESSING OFFICER AND HE UTTERLY FAILED. HE HAS ASSUMED AND PRESUMED ON THE BASIS OF THE RESOLUTION, WHICH IS BAD IN LAW. THERE WAS N O COMPETENCE POWER AND AUTHORITY TO THE BOARD OF TRUSTEES OF THE FOUNDATION TO CREATE A SEPARATE LEG AL ENTITY AND A SEPARATE TRUST MERELY BY A RESOLUTION. THE RESOLUTION WAS PASSED FOR CONVENIENCE OF MANAGEMENT AND CONSOLIDATION OF EDUCATIONAL ACTIVITIES. IN DEPUTY COMMISSIONER OF SALES TAX (LAW), BOARD O F REVENUE(TAXES), ERNAKULAM V. K. KELUKUTTY, (1885) 1 55- ITR-158 (SC) AT 165 IT OBSERVED : 'THE PARTNERS MAY BE DIFFERENT AND YET THE NATURE OF THE BUSINESS MAY BE THE 8 SAME, THE BUSINESSES MAY BE DIFFERENT AND YET THE PARTNERS MAY BE THE SAME. AN AGREEMENT BETWEEN THE PARTNERS TO CARRY ON A BUSINESS AND SHARE ITS PROFI TS MAY BE FOLLOWED BY A SEPARATE AGREEMENT BETWEEN THE SAM E PARTNERS TO CARRY ON ANOTHER BUSINESS AND SHARE THE PROFITS THEREIN'. THE INTENTION MAY BE TO CONSTITU TE TWO SEPARATE PARTNERSHIPS AND, THEREFORE, TWO DISTINCT FIRMS. OR TO EXTEND MERELY A PARTNERSHIP ORIGINALLY CONSTI TUTED TO BUSINESS, TO THE CARRYING ON OF ANOTHER BUSINESS . IT WILL ALL DEPEND ON THE INTENTION OF THE PARTNERS. THE INTENTION OF THE PARTNERS WILL HAVE TO BE DECIDED W ITH REFERENCE TO THE TERMS OF THE AGREEMENT AND ALL THE SURROUNDING CIRCUMSTANCES, INCLUDING EVIDENCE AS TO THE INTERLACING OR INTERLOCKING OF MANAGEMENT, FINANCIA L AND OTHER INCIDENTS OF THE RESPECTIVE BUSINESS. (EMPHASIS SUPPLIED). IN THE APPELLANT'S CASE THERE IS INTERL ACING, INTERLOCKING, COMMON MANAGEMENT, SAME ADMINISTRATIO N, SAME FINANCIAL CONTROL, COMMON OFFICE IN THE CITY P ALACE AND THE WHOLE WORLD KNOWS THAT ALL THE UNITS ARE OF THE FOUNDATION. BOARD OF TRUSTEES FOR ALL IS ONE AND TH E SAME. IN BIHARI LAL JAISWAL AND OTHERS V. C.I.T. (1 996) 217-ITR-746 (SC) IT WAS HELD THAT IF THE FORMATION OF A PARTNERSHIP FIRM IS IN VIOLATION, IT WOULD NOT BE A VALID. IT IS WELL SETTLED PROPOSITION OF LAW THAT A TRUST DEED HAS TO BE EXECUTED IN ACCORDANCE WITH SECTIONS 122-123 OF THE TRANSFER OF PROPERTY ACT AND THERE MUST BE POWE R AND COMPETENCE IN THE SETTLER (S) TO SETTLE IN FAVO UR OF THE TRUST. THE REVENUE HAS FAILED TO FIND ANY TRUST DEED DULY EXECUTED AND REGISTERED AS REQUIRED UNDER THE REGISTRATION ACT. THE PREDECESSORS HAVE EXAMINED, SCRUTINIZED AND CAME TO THE CORRECT CONCLUSION THAT VIDYADAN TRUST HAS NO SEPARATE LEGAL EXISTENCE, BUT IS AN UNIT OF THE FOUNDATION AND ITS INCOME AND EXPENDITU RE HAS TO BE CONSIDERED AND IS TO BE CONSIDERED IN THE HANDS OF THE FOUNDATION. IT IS NOT A NEW FACT. (V) SEPARATE HOLDING OF PAN IS OF NO CONSEQUENCE. T HE PAN WAS NOT NEWLY TAKEN DURING THIS YEAR BUT THE UNIT I S HOLDING PAN FOR THE LAST SEVERAL YEARS. IT WAS KNOW N TO ALL THE PREDECESSORS IN OFFICE INCLUDING THE ASSESSING OFFICER ASSESSING ON 14.7.2006. THE PREDECESSOR HAS CLEARLY GIVEN THE PAN NUMBER ON THE NOTICE U/S.143(2), NOTICE U/S.L42(1) AND THE UNIT ITSELF HAS ALSO MENTIONED T HE PAN 9 NUMBER IN ITS REPLY DATED 10 TH JULY, 2006. WE SUBMIT IT IS NOT A NEW FACT. THE INITIATION OF REOPENING PROCEEDINGS IS NOT VAL ID AND ASSESSMENT MADE UNDER S. 147 R/W.S. 143(3) OF THE A CT IN FURTHERANCE THERETO IS ALSO NOT VALID. THE FOLLOWIN G CASE LAWS ALSO SUPPORT THE APPELLANT'S CONTENTION IN THI S REGARD. THE MERE CHANGE OF OPINION CANNOT BE BASIS FOR REOPENING THE ASSESSMENT. THEREFORE, THE PROCEEDING S INITIATED UNDER SEC. 148 OF THE ACT SHOULD BE DISMI SSED. RELIANCE WAS PLACED ON THE FOLLOWING CASES:- 1) CIT VS. KELVINATOR OF INDIA LTD. (2002) 256 ITR 1 (DELETED) (FB) (ASST. Y 1997-98) APPROVED BY SUPREM E COURT IN (2010) 320 ITR 561 (SC) 2) D.T. & T.D.C.LTD. VS. CIT (2010) 324 ITR 234 (DEL.) 3) M.J. PHARMACEUTICALS LTD. VS. CIT (2008) 297 ITR 11 9 (BOM) (A.Y. 2003-04) 4) RAYMOND WOOLLEN MILLS LTD. VS. INCOME TAX OFFICER A ND OTHERS (1999) 236 ITR 34 (S.C.) 5) ASTEROIDS TRADING & INVESTMENT P. LTD. VS. DCIT (20 09) 308 ITR 190 (BOM) (193) 6) ASIAN PAINTS LTD. VS. DCIT (2008) 308 ITR 195 (BOM) (198). 7) ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. (2010) 325 ITR 471 (BOM) 8) AVENTIS PHARMA LTD. VS. ASSTT. CIT (2010) 323 ITR 5 70 (BOM) 577. 9) BHAVESH DEVELOPERS VS. A.O. (2010) 224 CTR 160 (BOM ) 10) INTERNATIONAL GLOBAL NETWORKS BV VS. DDIT (IT) (201 2) 50 SOT 433 (MUM)(TRIB.) 11) GENERAL INSURANCE CORPORATION OF INDIA VS. DY. CIT (2012) VOL. 114 (1) BOM. L.R. 0246 (HIGH COURT). 10 9. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT FROM THE REASONS RECORDED, IT WAS APPARENT AND PATENT ON THE FACE OF THE RECORD THAT SUCH REASONS WERE NO REASONS IN THE EYE OF LAW AND THE ACTION OF THE ASSESSING OFFICER WAS WITHOUT FRESH INFORMATION, IT WAS BASED ON MERE REAPPRAISAL OF EVIDENCE ON RECORD FROM YEAR TO YEAR WITHOUT DEFINITE INFORMATION FOR ESCAPEMENT OF INCOME, THEREFORE, RE OPENING WAS ONLY ON CHANGE OF OPINION AND ILLEGAL. IT WAS FURTHER STAT ED THAT THE ASSESSEE HAD ALWAYS BEEN FILING SEPARATE RETURNS FOR ALL THE FOUR TRUSTS I.E. MAHARANA MEWAR PUBLIC SCHOOL, VIDYADAN TRUST-ASSESS EE, PUBLICATION TRUST AND MAHARANA MEWAR TECHNICAL INSTITUTE SINCE INSPECTION. BUT, THE DEPARTMENT TREATED ALL THE FOUR TRUSTS AS ONE TRUST ONLY AND OTHER THREE TRUSTS BEING UNIT OF MMCF AND THAT THE AUDIT REPORT FORM NO. 10B HAD ALSO BEEN ATTACHED ALONG WITH RETURN OF INCOME CONS OLIDATING THE INCOME AND EXPENDITURE OF ALL THE FOUR TRUSTS TOGET HER. IT WAS EMPHASIZED THAT A CONSISTENT TREATMENT WAS ACCORDED BY THE DEPARTMENT FROM THE A.Y. 1976-77 TO 2003-2004 AND A S NO ACTION UNDER SECTION 263 OF THE ACT HAD EVER BEEN TAKEN BY THE D EPARTMENT AGAINST SUCH ORDERS, THEREFORE, IT HAD BEEN APPROVED AND AF FIRMED BY THE DEPARTMENT. IT WAS ALSO CONTENDED THAT THE ASSESSE E-TRUST IS A UNIT OF MMCF WAS FURTHER STRENGTHENED BY THE APPROVAL U/S 1 0(23C)(VI) OF THE ACT GRANTED TO MAHARANA MEWAR PUBLIC SCHOOL, A UNIT OF ASSESSEE-TRUST 11 BY THE WORTHY CHIEF COMMISSIONER OF INCOME-TAX, UDA IPUR VIDE OFFICE ORDER NO. 1097 DATED 30/07/2007 STATING THEREIN AS UNDER:- IN EXERCISE OF THE POWERS CONFERRED ON ME BY THE S UB-CLAUSE 6 OF CLAUSE 23C OF SECTION 10 OF THE IT ACT, 1961 R EAD WITH RULE 2CA OF THE IT RULES, 1962 I.E. THE CHIEF COMMI SSIONER OF INCOME-TAX, UDAIPUR HEREBY ACCORD APPROVAL TO MAHAR ANA MEWAR PUBLIC SCHOOL, A UNIT OF MAHARANA MEWAR CHARI TABLE FOUNDATION, UDAIPUR FOR THE PURPOSE OF SAID SECTION FOR ASSESSMENT YEAR 2007-08 TO 2009-10 SUBJECT TO CONDI TIONS MENTIONED HEREUNDER. ACCORDINGLY, IT WAS STATED THAT AO HAD NOT MAINTAIN ED THE CONSISTENCY AND THE ASSESSMENT ORDER WAS PASSED IN CONTRAVENTION OF THE PROVISIONS OF THE ACT AND LEGAL DECISIONS. THEREFOR E, THE PROCEEDINGS INITIATED U/S 148 OF THE ACT SHOULD BE QUASHED. 10 . LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF A SSESSEE OBSERVED THAT MMCF WAS CREATED ON 20/10/1969 AND WAS REGISTE RED WITH THE DEVASTHAN DEPARTMENT, RAJASTHAN GOVERNMENT VIDE ORD ER NO. 214 DATED 29/08/1975. IT WAS DULY REGISTERED WITH SUB-REGIST RAR, UDAIPUR ON 22/11/1976. LD. CIT(A) REPRODUCED THE COPY OF THE TRUST DEED OF THE SAID FOUNDATION AT PAGES NO. 28 TO 36 OF THE IMPUGN ED ORDER, FOR THE COST OF REPETITION, THESE ARE NOT REPRODUCED HEREIN . ON THE BASIS OF ABOVE SAID TRUST DEED, LD. CIT(A) CAME TO THE CONCL USION THAT THE MAIN OBJECTIVES OF THE TRUST WERE AS UNDER:- A) SPREAD OR PROMOTE EDUCATION OR LEARNING IN ALL ITS BRANCHES, ESTABLISHMENTS, ACQUISITION AND MAINTENAN CE 12 ARE SUPPORTED BY MUSEUM FOR DISPLAYING ARTICLES AND OBJECTS PERTAINING TO ANCIENT HISTORY AND CULTURE. TO PRINT AND PUBLISH OR DISTRIBUTE ON PAYMENT OR OTHER WISE BOOKS AND PAMPHLET, PERIODICAL, TRACTS AND INSANITI ES OF INDIAN HISTORY, CULTURE AND CIVILIZATION. 11. LD. CIT(A) ALSO POINTED OUT THAT THE ASSESSEE FURN ISHED A COPY OF EXTRACT OF THE MINUTES OF MMCF WHICH PROVES THAT TH REE SECTIONS OF THE FOUNDATIONS WERE UNDER CONTROL OF MMCF. ON THE BAS IS OF THE AFORESAID FACTS, LD. CIT(A) WAS OF THE VIEW THAT FROM THE VER Y BEGINNING THE INTENTION OF THE FOUNDATION WAS VERY MUCH CLEAR THA T THE THREE UNITS WOULD BE PART OF THE FOUNDATION AND THOSE WERE CREA TED ONLY TO FACILITATE VARIOUS ACTIVITIES OF THE FOUNDATION IN DIFFERENT FIELDS. 12 . AS REGARDS TO THE REGISTRATION WITH DEVANSTHAN DE PARTMENT, RAJASTHAN GOVERNMENT AND PAN NUMBER OF THE ASSESSEE -TRUST, LD. CIT(A) OBSERVED THAT ASSESSEE HAD BEEN FILING THE RETURNS OF INCOME SEPARATELY FOR ALL THE UNITS, BUT THE DEPARTMENT TREATED IT PA RT OF THE FOUNDATION AND MADE ONLY ONE ASSESSMENT OF MMCF U/S 143(3) OF THE ACT AND BY TREATING OTHER THREE TRUSTS NAMELY VIDYADAN TRUST-A SSESSEE, PUBLICATION TRUST AND RESEARCH INSTITUTE AS UNITS OF MMCF, DROP PED THE PROCEEDINGS INITIATED U/S 143(3) OF THE ACT IN CASE OF OTHER TH REE UNITS. IT WAS POINTED OUT THAT THIS STAND HAS BEEN ACCEPTED AND F OLLOWED BY THE DEPARTMENT IN ALL THE A.Y. FROM 1976-77 TO 2003-04. LD. CIT(A) OBSERVED THAT THE POWER OF ASSESSMENT OR REASSESSMENT OF ANY INCOME CHARGEABLE TO TAX THAT HAVE ESCAPED ASSESSMENT HAS BEEN PROVID ED U/S 147 R/W S 13 148 OF THE ACT AND IF THE AO HAS THE REASON TO BELI EVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT THEN THE A O MAY SUBJECT TO THE PROVISIONS OF SECTIONS 147 TO 153 OF THE ACT AS SESS OR REASSESS FOR SUCH INCOME. LD. CIT(A) FURTHER OBSERVED THAT ALL THE FACTS WERE AVAILABLE ON RECORD WITH THE DEPARTMENT FROM THE VE RY BEGINNING TILL ASSESSMENT YEAR 2003-04 AND THOSE FACTS WERE ALREAD Y ACCEPTED, WHICH IS EVIDENT FROM THE ASSESSMENT OF MMCF WHEREIN OTHE R THREE UNITS WERE TREATED AS PART OF MMCF, SO, IT WAS MERE CHANGE OF OPINION OF THE ASSESSING OFFICER WHICH HAS PROMOTED HIM TO REOPEN THE ASSESSMENT. LD. CIT(A) WAS OF THE VIEW THAT REOPENING HAD BEEN MADE ON MERE CHANGE OF OPINION BECAUSE OF THE FOLLOWING REASONS: - I) THERE IS NO CHANGE OF LAW ON THE ISSUE. II) NO NEW MATERIAL/FACT HAS COME ON RECORD OR BROU GHT OUT BY THE LD. AO. III) NO INFORMATION HAS BEEN RECEIVED. THAT THE AC TION OF THE LD. ASSESSING OFFICER IS WITHOUT FRESH INFORMAT ION & IS BASED ON MERE RE-APPRAISAL OF EVIDENCE ON RECORD FROM YEAR TO YEAR, WITHOUT DEFINITE INFORMATION FOR ESCAPEMENT OF INCOME, THE REOPENING IS ONLY ON CHAN GE OF OPINION. IV) THE CONSISTENT HISTORY OF THE APPELLANT SINCE A .Y. 1976- 77 TO A.Y. 2003-04 THAT THERE WAS NO FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS AND ALL THE RELEVANT/PRIMARY/MATERIAL FACT WERE ON THE RECO RDS OF THE DEPARTMENT AND WERE KNOWN TO THE ASSESSING OFFICER FROM YEAR TO YEAR. V) EVEN AFTER AMENDMENT OF SECTION 147 (W.E.F. 1989 ) MERE CHANGE OF OPINION DOES NOT CONFER JURISDICTION ON T HE ASSESSING OFFICER TO INITIATE PROCEEDINGS FOR REASSESSMENT MERELY RESORTING TO EXPLANATION 1 TO T HAT 14 SECTION 147 ON THE BASIS OF CHANGE OF OPINION. THU S WHERE THE REASON RECORDED BY THE ASSESSING OFFICER DISCLOSE NO MORE THAN MERE CHANGE OF OPINION THE REASSESSMENT NOTICES ARE LIABLE TO BE QUASHED. 13 . LD. CIT(A) OBSERVED THAT REOPENING OF THE ASSESSM ENT IN THE CASE OF ASSESSEE WAS A FRESH APPLICATION OF MIND BY THE SAME ASSESSING OFFICER TO THE SAME SET OF ACTS. THEREFORE, THE PR OCEEDINGS INITIATED U/S 148 OF THE ACT AND THE ASSESSMENT PASSED U/S 143(3) R/W S 147 OF THE ACT WERE QUASHED. NOW, THE DEPARTMENT IS IN APPEAL. 14 . LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSE SSING OFFICER AND SUBMITTED THAT NOTICE U/S 148 OF THE ACT WAS ISSUED AFTER RECORDING THE PROPER REASONS AND ASSESSING OFFICER WAS SATISFIED THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT. THEREFORE, REOPENING WAS VALID AND THE LD. CIT(A) WAS NOT JUSTIFIED IN QUASHING THE ASSESS MENT FRAMED BY THE ASSESSING OFFICER. 15 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). 16 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT ASSESSING OFFICER APPLIED HIS MIND AND INITIALLY DROPPED THE PROCEEDINGS U/S 143(3) OF THE ACT BY CONSIDERING THAT THE ASSESSEE WAS A UNIT OF MMCF. THE ASSESSIN G OFFICER FOR TAKING 15 THE SAID VIEW CONSIDERED THE PAST HISTORY OF THE AS SESSEE, COPY OF THE TRUST DEED OF THE MMCF AND WAS ALSO KNOWING THIS FA CT THAT NO SEPARATE REGISTRATION U/S 12A(A) OF THE ACT, RELATING TO TH E ASSESSEE WAS THERE BECAUSE IT WAS COVERED BY THE REGISTRATION GRANTED TO MMCF AND A COPY OF REGISTRATION GRANTED TO MMCF WAS FURNISHED BEFOR E HIM. THE ASSESSING OFFICER ACCEPTED THE CONSOLIDATING INCOME AND EXPEN DITURE OF THE ASSESSEE AND OTHER THREE UNITS TREATING THE SAME AS PART OF MMCF. THEREFORE, WHILE DROPPING THE PROCEEDINGS INITIATED U/S 143(3) OF THE ACT, ASSESSING OFFICER NOT ONLY APPLIED HIS MIND BU T ALSO CONSIDERED THE VIEW TAKEN BY HIS PREDECESSOR AND THE REGISTRATION GRANTED U/S 10(23C)(VI) OF THE ACT BY THE LD. C.C.I.T. 17. IT IS WELL SETTLED THAT POWER OF ASSESSMENT OR REA SSESSMENT OF ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT HAS BEEN PROVIDED U/S 147 R/W S 148 OF THE ACT, WHICH PROVIDES THAT IF AS SESSING OFFICER HAS THE REASONS TO BELIEVE THAT ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT, THEN HE MAY SUBJECT TO THE PROVISIONS O F SECTIONS 147 TO 153 OF THE ACT ASSESS OR REASSESS SUCH INCOME. HOWEVER , BEFORE ISSUING ANY NOTICE U/S 148 OF THE ACT, ASSESSING OFFICER MUST H AVE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED TO AS SESSMENT, HOWEVER, THOSE REASONS TO BELIEVE CANNOT BE A REASON TO SUSP ECT, BUT THERE MUST BE A DIRECT NEXUS BETWEEN THE MATERIAL COMING TO TH E NOTICE OF THE 16 ASSESSING OFFICER AND THE FORMATION OF THE BELIEF T HAT THERE HAS BEEN ESCAPEMENT OF INCOME OF THE ASSESSEE FOR A PARTICUL AR YEAR. THE SAID MATERIAL FOR FORMATION OF BELIEF MUST BE RELEVANT A ND NOT VAGUE. HOWEVER, MERELY A CHANGE OF OPINION, CANNOT CONSTIT UTE A REASON TO BELIEVE AND IF THE ASSESSEE HAS DISCLOSED BASIC AND ALL THE TRUE FACTS DURING THE COURSE OF ASSESSMENT AND THE ASSESSMENT IS COMPLETED, THE NOTICE U/S 148 OF THE ACT CANNOT BE ISSUED LATER ON , MERELY BECAUSE THERE IS POSSIBILITY OF ANOTHER VIEW, THE SAID ACTI ON WILL AMOUNT TO CHANGE OF OPINION. IN THE PRESENT CASE, ALL THE FA CTS WERE AVAILABLE ON RECORD WITH THE DEPARTMENT FROM THE VERY BEGINNING AND THOSE FACTS WERE ACCEPTED WHILE FRAMING THE ASSESSMENT OF MMCF TREATING THE ASSESSEE-TRUST AS A UNIT OF THE SAID FOUNDATION, WH ICH ESTABLISHES THAT THE CHANGE OF OPINION OF THE ASSESSING OFFICER PROM PTED HIM TO REOPEN THE ASSESSMENT. THEREFORE, THE LD. CIT(A) WAS FULL Y JUSTIFIED IN HOLDING THAT REOPENING OF THE ASSESSMENT OF THE ASSESSEES CASE WAS BAD IN LAW AND RIGHTLY QUASHED THE PROCEEDINGS INITIATED U/S 1 48 OF THE ACT AND THE ASSESSMENT FRAMED U/S 143(3) R/W S 147 OF THE ACT. 18 . WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, DO NOT SEE ANY VALID GROUND TO INTERFE RE IN THE FINDINGS OF THE LD. CIT(A) AND ACCORDINGLY, DO NOT SEE ANY MERI T IN THE APPEAL OF THE DEPARTMENT. 17 19. IN THE REMAINING APPEALS I.E. I.T.A.NO. 155/JODH/ 2013, I.T.A.NO. 60/ JODH/2013 AND I.T.A.NO. 281/JODH/2013, THE FACT S ARE IDENTICAL AND EVEN THE CONTENTION OF BOTH THE PARTIES WAS THE SAM E, THEREFORE, OUR FINDINGS GIVEN IN FORMER PART OF THIS ORDER IN RESP ECT OF I.T.A.NO.64/JODH/2013 SHALL APPLY MUTATIS MUTANDIS FOR THOSE APPEALS. 20. IN THE RESULT, APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON AUGUST, 2013 ). (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : AUGUST, 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.