JUDGMENT :

KAMAL KHATA, J.

1. By this petition, notice under section 148 of the Act dated 20th March, 2015 proposing to reopen the assessment for assessment year (AY) A.Y. 2008-09 is challenged. The Petition also seeks to challenge the impugned order dated 2nd November 2015 whereby the Respondent No. 1 rejected the objections of the Petitioner, challenging the validity of their reassessment proceedings for the A.Y. 2008-09 being ex-facie illegal and contrary to the provisions of the Act.

THE FACTS OF THE CASE :

2. The Petitioner is a Public Charitable Trust registered with the Director of Income Tax (Exemption), Mumbai since 17th December, 1977 under section 12A of the Income Tax Act (‘the Act’ for short). The Petitioner addressed a letter dated 29th February, 2008 to the Assistant Director of Income-tax (Exemptions) I-(2) informing him that they would not be able to utilise 85% of the accumulated income for the year towards the expenditure on the objects of the trust and therefore, may be allowed to exercise the option under section 11(1) of the Act to spend the unspent surplus in the next twelve months. On 30th September, 2008 the Petitioner filed its return of income for A.Y. 2008-09 declaring ‘Nil income’. Rs. 89,17,868/- was claimed by the Petitioner being 15% of the gross income as deduction allowable under section 11 of the Act. A sum of Rs. 13,21,686/- was also claimed as depreciation. Since the amount expended on the object of the Petitioner Trust was more than the income, the Petitioner claimed deficit of Rs. 13,92,05,087/- as carry forward to be set off in the subsequent year. On 3rd November, 2010 the Petitioner received notice under section 142(1) of the Act asking the Petitioner to submit the following :

(a) Detailed note on the objects of the Trust, and activities carried on during the year;

(b) Details of investments made in movable and immovable assets;

(c) Details of accumulation made under section 11(2) of the Act in the last 10 years and the details of utilization thereof over the last 10 years alongwith the copies of application in Form No. 10;

(d) Whether the capital expenditure made in the fixed assets have been claimed as application of income in earlier years, if so, justification for claiming depreciation in the year under assessment;

(e) Complete details on the expenditure incurred on the objects of Trust; and

(f) Earlier two years assessment orders under section 143(2) of the Act.

3. The Petitioner filed its submission by letter dated 3rd December, 2010 inter alia submitting that the note on object and activities of the Petitioner Trust; details of expenses on the object of Petitioner Trust; summary of accumulation / deficit in the last 10 years. The Petitioner received another show-cause notice dated 7th December, 2010 under section 142(1) of the Act requiring the Petitioner to file various other documents and details of certain capital expenditure incurred by the Petitioner. This was responded by the Petitioner vide letter dated 9th December, 2010 and 15th December, 2010. By an order under section 143(3) of the Act dated 28th December, 2010 for assessment year 2008-09, A.O. accepted returned income offered by the Petitioner. On 26th March, 2015, the Petitioner received notice under section 148 of the Act dated 20th March, 2015 with regard to the income chargeable to tax for A.Y. 2008-09 having escaped assessment. In response to the impugned notice, by letter dated 6th April 2015, the Petitioner sought a copy of the reasons for issuance of the notice under section 148 of the Act and out of abundant caution also filed a copy of the income tax return for A.Y. 2008-09 along with copy of the computation of income and financial statements. By letter dated 30th April, 2015 the respondent No. 1 forwarded the reasons for reopening of the assessment that are as under :

“In this case the assessee has filed its return of income for A.Y. 2008-09 on 30.9.2008 disclosing total income of Rs. Nil. The assessment was complete