AI Insights
The case involves cross appeals by AARK India Educational Charitable Trust and the Income Tax Officer (Exemptions Ward) against the order of the Commissioner of Income Tax (Appeals) dated 10.06.2025 for the Assessment Year 2012-13. The primary legal issue was the validity of the assessment order passed under section 147 of the Income Tax Act, 1961, which was challenged on the grounds of being time-barred. The tribunal examined the timeline of events, including the issuance of notices, stay orders by the High Court, and the final assessment order, to determine whether the assessment was completed within the statutory limitation period.
Appeal Details
Counselvise Citation
[2026] 140 COUNSELVISE.COM (IT) 834242 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
6 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-02-2026
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
15-07-2025
Judgement Text
"आयकरअपील यअ धकरण,’ए’\u000fयायपीठ,चे\u000fनई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ीमनुक ुमारिग र, ाियकसद\u0010 एवं \u0001ीएस. आर. रघुनाथालेखासद\u0010 BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRIS.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं/.ITA Nos.: 1986/Chny/2025 \u001bनधा रणवष / Assessment Year: 2012-13 AARK INDIA EDUCATIONAL CHARITABLE TRUST, 1 1 Francis Xavier Engineering College Campus, Vannarapettai, Tirunelveli, Tamil Nadu 627003 v. Income Tax Officer (Exemptions Ward) Nellai City Centre, Rahmath Nagar, Tiruchendur Road, Tirunelveli Tamil Nadu- 627011 [PAN: AACTA 2809 D] (अपीलाथ /Appellant) (!\"यथ /Respondent) आयकरअपीलसं/.ITA No. 2387/Chny/2025 (Revenue Appeal) \u001bनधा रणवष / Assessment Year: 2012-13 Income Tax Officer (Exemptions Ward) Nellai City Centre, Rahmath Nagar, Tiruchendur Road, Tirunelveli Tamil Nadu-627011 AARK INDIA EDUCATIONAL CHARITABLE TRUST, 1 1 Francis Xavier Engineering College Campus, Vannarapettai, Tirunelveli, Tamil Nadu-627003 [PAN: AACTA 2809 D] (अपीलाथ /Appellant) (!\"यथ /Respondent) अपीलाथ क$ओरसे/Appellant/Assessee by : Mr. Y. Sridhar, F.C.A. !\"यथ क$ओरसे/Respondent/Revenue by : Ms. E. Pavuna Sundari, CIT सुनवाईक$तार ख/Date of Hearing : 07.01.2026 घोषणाक$तार ख /Date of Pronouncement : 04.02.2026 Printed from counselvise.com PER MANU KUMAR GIRI, JM The captioned cross appeals filed by the against the order of the learned Commissioner of Income Tax (Appeals) CIT(A)-18 Chennai [‘CIT(A) in short] dated 10.06.2025 for AY 2012-13. 2. The brief facts of the case, as borne out from the records, are that the assessee, M/s AARK India Educationa of income for the Assessment Year 2012 declaring a total income of 3. The assessee, M/s AARK India Educational Trust, is a registered public charitable trust based in Tirunelveli and has been granted registration u/s. 12AA of the Income Tax Act with effect from Assessment Year 2013- operates on a non-profit basis with the primary objective of imparting education. It runs a CBSE name SCAD World School (CBSE) Chengalpattu-603 111. The registered office of the Trust is situated at No. 1, Francis Xavier Engineering College Campus, Vannarepttai, Tirunelveli. :-2-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST आदेश/ O R D E R MANU KUMAR GIRI, JM: The captioned cross appeals filed by the assessee and revenue against the order of the learned Commissioner of Income Tax 18 Chennai [‘CIT(A) in short] dated 10.06.2025 The brief facts of the case, as borne out from the records, are that the assessee, M/s AARK India Educational Trust, filed its return of income for the Assessment Year 2012-13 on 21.01.2013, declaring a total income of Nil. The assessee, M/s AARK India Educational Trust, is a registered public charitable trust based in Tirunelveli and has been granted 12AA of the Income Tax Act with effect from -14. The Trust, established on 23.08.2007, profit basis with the primary objective of imparting education. It runs a CBSE-affiliated school under the ld School (CBSE) located at N.H. 45, Pazhaveli, 603 111. The registered office of the Trust is situated at No. 1, Francis Xavier Engineering College Campus, Vannarepttai, & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST assessee and revenue are against the order of the learned Commissioner of Income Tax 18 Chennai [‘CIT(A) in short] dated 10.06.2025 The brief facts of the case, as borne out from the records, are l Trust, filed its return 13 on 21.01.2013, The assessee, M/s AARK India Educational Trust, is a registered public charitable trust based in Tirunelveli and has been granted 12AA of the Income Tax Act with effect from 14. The Trust, established on 23.08.2007, profit basis with the primary objective of affiliated school under the located at N.H. 45, Pazhaveli, 603 111. The registered office of the Trust is situated at No. 1, Francis Xavier Engineering College Campus, Vannarepttai, Printed from counselvise.com 4. A survey u/s. 133A of the Income Tax Act was conducted o 22.10.2018 at both the registered office of the Trust in Tirunelveli and at SCAD World School (CBSE), Chengalpattu. During the survey proceedings, it was observed that the Trust had been taken over by the present trustees on 07.04.2011. Examination of th sheet as on 31.03.2011 revealed that a sum of was reflected as advances received from eight different persons. In the balance sheet for the year ended 31.03.2012, after repayment of Rs.5,56,982/- the remaining amount of converted into corpus funds. 5. The eight individuals from whom the advances were received, as reflected in the balance sheet as on 31.03.2011, were the erstwhile trustees of the Trust. These advances were converted into corpus during the financial year 2011 trustees. Consequently, there was reason to believe that income chargeable to tax had escaped assessment, as the substantial sum of Rs.6,19,11,861 shown as advances in Assessment Year 2011 was converted into corpus in the subsequent Assessment Year 2012-13. :-3-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST 133A of the Income Tax Act was conducted o 22.10.2018 at both the registered office of the Trust in Tirunelveli and at SCAD World School (CBSE), Chengalpattu. During the survey proceedings, it was observed that the Trust had been taken over by the present trustees on 07.04.2011. Examination of the balance sheet as on 31.03.2011 revealed that a sum of Rs.6,24,68,843 was reflected as advances received from eight different persons. In the balance sheet for the year ended 31.03.2012, after repayment the remaining amount of Rs.6,19,11,861 converted into corpus funds. The eight individuals from whom the advances were received, as reflected in the balance sheet as on 31.03.2011, were the erstwhile trustees of the Trust. These advances were converted into corpus cial year 2011-12 in the names of the same former trustees. Consequently, there was reason to believe that income chargeable to tax had escaped assessment, as the substantial sum 6,19,11,861 shown as advances in Assessment Year 2011 into corpus in the subsequent Assessment Year & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST 133A of the Income Tax Act was conducted on 22.10.2018 at both the registered office of the Trust in Tirunelveli and at SCAD World School (CBSE), Chengalpattu. During the survey proceedings, it was observed that the Trust had been taken over by e balance 6,24,68,843/- was reflected as advances received from eight different persons. In the balance sheet for the year ended 31.03.2012, after repayment 1,861/- was The eight individuals from whom the advances were received, as reflected in the balance sheet as on 31.03.2011, were the erstwhile trustees of the Trust. These advances were converted into corpus 12 in the names of the same former trustees. Consequently, there was reason to believe that income chargeable to tax had escaped assessment, as the substantial sum 6,19,11,861 shown as advances in Assessment Year 2011-12 into corpus in the subsequent Assessment Year Printed from counselvise.com 6.Accordingly, the assessment was reopened Income-tax Act, 1961 (“the Act”) after obtaining the requisite sanction for issuance of notice Income Tax (Exemptions), Chennai, in accordance with the provisions of section 151 of the Act. 7. Notice u/s. 148 was issued to the assessee on 27.03.2019. In response thereto, the assessee filed its return of income on 29.04.2019 declaring Nil income and requested the reasons for reopening, which were duly furnished. The assessee submitted detailed explanations regarding the formation of the Trust on 06.06.2019 and, through the same communication, raised objections to the reopening of the assessment notice u/s. 143(2) was issued on 04.07.2019 followed by notice 142(1) dated 09.07.2019 calling for further information. 8. Meanwhile, the assessee filed a writ petition before the Hon’ble High Court challenging the notice issued The Hon’ble High Court granted a stay of the assessment proceedings on 16.09.2019. Subsequently, the Madurai Bench of the Hon’ble High Court, by order dated 30.03.2021, disposed of the writ :-4-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST Accordingly, the assessment was reopened u/s. 147 of the tax Act, 1961 (“the Act”) after obtaining the requisite sanction for issuance of notice u/s. 148 from the Commissioner of Income Tax (Exemptions), Chennai, in accordance with the provisions of section 151 of the Act. 148 was issued to the assessee on 27.03.2019. In response thereto, the assessee filed its return of income on 2019 declaring Nil income and requested the reasons for reopening, which were duly furnished. The assessee submitted detailed explanations regarding the formation of the Trust on 06.06.2019 and, through the same communication, raised ening of the assessment u/s. 147. Thereafter, 143(2) was issued on 04.07.2019 followed by notice 142(1) dated 09.07.2019 calling for further information. Meanwhile, the assessee filed a writ petition before the Hon’ble nging the notice issued u/s. 148 dated 27.03.2019. The Hon’ble High Court granted a stay of the assessment proceedings on 16.09.2019. Subsequently, the Madurai Bench of the Hon’ble High Court, by order dated 30.03.2021, disposed of the writ & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST 147 of the tax Act, 1961 (“the Act”) after obtaining the requisite 148 from the Commissioner of Income Tax (Exemptions), Chennai, in accordance with the 148 was issued to the assessee on 27.03.2019. In response thereto, the assessee filed its return of income on 2019 declaring Nil income and requested the reasons for reopening, which were duly furnished. The assessee submitted detailed explanations regarding the formation of the Trust on 06.06.2019 and, through the same communication, raised 147. Thereafter, 143(2) was issued on 04.07.2019 followed by notice u/s. Meanwhile, the assessee filed a writ petition before the Hon’ble 148 dated 27.03.2019. The Hon’ble High Court granted a stay of the assessment proceedings on 16.09.2019. Subsequently, the Madurai Bench of the Hon’ble High Court, by order dated 30.03.2021, disposed of the writ Printed from counselvise.com petition with a direction to the Assessing Officer to pass a speaking order on the objections raised by the assessee. 9. After disposing of the objections, the Assessing Officer passed the assessment order u/s. 147 on 10.09.2021. 10. At the outset, the learned Authorised for the assessee raised a legal ground contending that the assessment order dated 10.09.2021 is barred by limitation and therefore liable to be quashed. 11. The learned Departmental Representative (“ld. DR”) vehemently supported the order of the ld. CIT(A). She further contended that, for the purpose of computing limitation, the relevant date is the date of communication of the order vacating the stay and not the date on which the stay was actually vacated. 12. For adjudication of events are tabulated below: Sl.No. 1. Notice u/s.148 issued and served. 2. Stay order by the Hon’ble High Court 3. Due date for completion of Assessment 4. Stay vacated by the Hon’ble High Court 5. Assessment order passed by AO :-5-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST direction to the Assessing Officer to pass a speaking order on the objections raised by the assessee. After disposing of the objections, the Assessing Officer passed the 147 on 10.09.2021. At the outset, the learned Authorised Representative (“ld. AR”) for the assessee raised a legal ground contending that the assessment order dated 10.09.2021 is barred by limitation and therefore liable to be quashed. The learned Departmental Representative (“ld. DR”) vehemently the order of the ld. CIT(A). She further contended that, for the purpose of computing limitation, the relevant date is the date of communication of the order vacating the stay and not the date on which the stay was actually vacated. For adjudication of this legal issue, the relevant dates and events are tabulated below: PARTICULARS DATE Notice u/s.148 issued and served. 27.03.2019 Stay order by the Hon’ble High Court 16.09.2019 Due date for completion of Assessment 31.12.2019 vacated by the Hon’ble High Court 30.03.2021 Assessment order passed by AO 10.09.2021 & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST direction to the Assessing Officer to pass a speaking After disposing of the objections, the Assessing Officer passed the Representative (“ld. AR”) for the assessee raised a legal ground contending that the assessment order dated 10.09.2021 is barred by limitation and The learned Departmental Representative (“ld. DR”) vehemently the order of the ld. CIT(A). She further contended that, for the purpose of computing limitation, the relevant date is the date of communication of the order vacating the stay and not the this legal issue, the relevant dates and DATE 27.03.2019 16.09.2019 31.12.2019 30.03.2021 10.09.2021 Printed from counselvise.com 13. The relevant provisions of the section Time limit for completion of assessment, reassessment and recomputation. 153. (1) ………………………………………………………………………. (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of in which the notice under 92[Provided that where the notice und of April, 2019, the provisions of this sub \"nine months\", the words \"t Explanation 1.—For the purposes of this section, in computing the period of limitation— (i) ……………………………………………………………………….. (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court; or …………………………………………………………………………………………. …………………………………………………………………………………………. Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days extended accordingly: 14. In the present case, the notice under section 148 was issued and served on 27.03.2019 and therefore, the proviso extending the limitation to twelve months is not applicable. Further, after the vacation of the stay by the Hon’ble than sixty days were available to the Assessing Officer; hence, the question of further extension to sixty days does not arise. :-6-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST . The relevant provisions of the section 153 are as under: Time limit for completion of assessment, reassessment and recomputation. ………………………………………………………………………. (2) No order of assessment, reassessment or recomputation shall be made after the expiry of nine months from the end of the financial year in which the notice under section 148 was served: that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words \"nine months\", the words \"twelve months\" had been substituted.] For the purposes of this section, in computing the period of ……………………………………………………………………….. the period during which the assessment proceeding is stayed by an order or any court; or …………………………………………………………………………………………. …………………………………………………………………………………………. that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-sections (1), (2), (3) and sub able to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall sixty days and the aforesaid period of limitation shall be deemed to be In the present case, the notice under section 148 was issued and served on 27.03.2019 and therefore, the proviso extending the limitation to twelve months is not applicable. Further, after the vacation of the stay by the Hon’ble High Court on 30.03.2021, more than sixty days were available to the Assessing Officer; hence, the question of further extension to sixty days does not arise. & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST 153 are as under: Time limit for completion of assessment, reassessment and recomputation. ………………………………………………………………………. (2) No order of assessment, reassessment or recomputation shall be made the financial year is served on or after the 1st day section shall have effect, as if for the words For the purposes of this section, in computing the period of ……………………………………………………………………….. the period during which the assessment proceeding is stayed by an order or …………………………………………………………………………………………. …………………………………………………………………………………………. that where immediately after the exclusion of the aforesaid period, the sections (1), (2), (3) and sub-section (8) able to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall and the aforesaid period of limitation shall be deemed to be In the present case, the notice under section 148 was issued and served on 27.03.2019 and therefore, the proviso extending the limitation to twelve months is not applicable. Further, after the High Court on 30.03.2021, more than sixty days were available to the Assessing Officer; hence, the Printed from counselvise.com 15. It is also well settled by the judgment of the Hon’ble Allahabad High Court in Commissioner Bhan Bansal [2014] 46 taxmann.com 108 (All.) that in terms of Explanation 1(ii) to section 153, the period of limitation stands excluded only during the subsistence of the stay order and once the stay is vacated, the perio of the date of communication of such order to the Department. 16. In view of the above factual matrix and the settled legal position, we are of the considered opinion that the relevant date for computation of limitation is the date on which the stay order was vacated(in the presence of the counsel for the revenue Hon’ble High Court, i.e., 30.03.2021, and not the date of communication thereof. If the period of stay from 16.09.2019 to 30.03.2021 is excluded, the Assessing Officer was statutorily required to pass the assessment order on or before 15.07.2021. However, the assessment order was passed on 10.09.2021, which is clearly beyond the prescribed period of limitation and therefore unsustainable in law. The extensions granted by the CBDT vide Notifications No. 10/2021 dated 27.02.2021 and No. 38/2021 dated :-7-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST It is also well settled by the judgment of the Hon’ble Allahabad Commissioner of Income-tax-1, Agra vs. Chandra [2014] 46 taxmann.com 108 (All.) that in terms of Explanation 1(ii) to section 153, the period of limitation stands excluded only during the subsistence of the stay order and once the stay is vacated, the period of limitation recommences, irrespective of the date of communication of such order to the Department. In view of the above factual matrix and the settled legal position, we are of the considered opinion that the relevant date for ation is the date on which the stay order was in the presence of the counsel for the revenue Hon’ble High Court, i.e., 30.03.2021, and not the date of communication thereof. If the period of stay from 16.09.2019 to 30.03.2021 is excluded, the Assessing Officer was statutorily required to pass the assessment order on or before 15.07.2021. owever, the assessment order was passed on 10.09.2021, which is clearly beyond the prescribed period of limitation and therefore unsustainable in law. The extensions granted by the CBDT vide Notifications No. 10/2021 dated 27.02.2021 and No. 38/2021 dated & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST It is also well settled by the judgment of the Hon’ble Allahabad 1, Agra vs. Chandra [2014] 46 taxmann.com 108 (All.) that in terms of Explanation 1(ii) to section 153, the period of limitation stands excluded only during the subsistence of the stay order and once the d of limitation recommences, irrespective of the date of communication of such order to the Department. In view of the above factual matrix and the settled legal position, we are of the considered opinion that the relevant date for ation is the date on which the stay order was in the presence of the counsel for the revenue) by the Hon’ble High Court, i.e., 30.03.2021, and not the date of communication thereof. If the period of stay from 16.09.2019 to 30.03.2021 is excluded, the Assessing Officer was statutorily required to pass the assessment order on or before 15.07.2021. owever, the assessment order was passed on 10.09.2021, which is clearly beyond the prescribed period of limitation and therefore unsustainable in law. The extensions granted by the CBDT vide Notifications No. 10/2021 dated 27.02.2021 and No. 38/2021 dated Printed from counselvise.com 27.04.2021 do not alter the statutory limitation prescribed under section 153(2) of the Act. 17. Accordingly, the assessment order passed under section 147 dated 10.09.2021 is quashed as being barred by limitation. 18. In the result, the appeal of the asse ground of limitation and the appeal of the Revenue stands as infructuous. Order pronounced on the Sd/- (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) लेखासद,य/ACCOUNTANT MEMBER चे\u000fनई/Chennai, -दनांक/Dated: 04 February, 202 SNDP, Sr. Ps आदेशक$!\u001bत/ल0पअ1े0षत/Copy to 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकरआयु\u000f/CIT, Chennai / Madurai / 4. िवभागीय\bितिनिध/DR 5. गाड\u0018फाईल/GF :-8-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST 27.04.2021 do not alter the statutory limitation prescribed under section 153(2) of the Act. Accordingly, the assessment order passed under section 147 dated 10.09.2021 is quashed as being barred by limitation. In the result, the appeal of the assessee is allowed ground of limitation and the appeal of the Revenue stands Order pronounced on the 04th day of February, 2026, in Chennai. /ACCOUNTANT MEMBER Sd/- (मनुक ुमारिग र (MANU KUMAR GIRI \u000fया\u001bयकसद,य/JUDICIAL MEMBER , 2026 Copy to: CIT, Chennai / Madurai / Salem / Coimbatore. & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST 27.04.2021 do not alter the statutory limitation prescribed under Accordingly, the assessment order passed under section 147 dated 10.09.2021 is quashed as being barred by limitation. allowed on the ground of limitation and the appeal of the Revenue stands dismissed , in Chennai. मनुक ुमारिग र) MANU KUMAR GIRI) /JUDICIAL MEMBER Printed from counselvise.com :-9-: ITA Nos .1986/Chny/2025 & 2387/Chny/2025 ITO (E) (Vs.) AARK INDIA EDUCATIONAL CHERITABLE TRUST & 2387/Chny/2025 (AY 2012-13) CHERITABLE TRUST Printed from counselvise.com "
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