Reassessment under the Income Tax Act cannot occur solely on a change of opinion without new material; compliance with statutory provisions suffices for valid claims by charitable trusts under Section 11(2).

JUDGMENT :

(PER Amit Satyavan Jamsandekar, J ).

1. By the present Petition, the Petitioner has impugned the Notices dated 9th August 2024 and 20th August 2024, which are issued under Section 148A (b) of the Income Tax Act, 1961 (“the Act”). The relevant Assessment Year (A.Y.) is 2018-2019. Further, the Petitioner has also impugned the order dated 28^th August 2024, passed by the 1^st Respondent under Section 148A (d) of the Act. The Petitioner has also impugned the Notice dated 28^th August 2024 issued by the 1^st Respondent under Section 148 of theAct. By the Notice Page 2 of 32 dated 28^th August 2024, the 1^st Respondent has reopened the assessment of the Petitioner for A.Y. 2018-2019. The Revenue has filed its Reply dated 14^th November 2024 to the Petition, which is affirmed on behalf of the 1^st and the 2^nd Respondent by one Mr. Pravin Kumar. The Petitioner has filed its Rejoinder to the Revenue's Reply.

2. The Pleadings are complete, and therefore, by consent of the parties, we have heard the Petition finally at the admission stage. Accordingly, we issue Rule. The Respondents waive service. By consent of the parties, Rule is made returnable forthwith and heard finally.

3. The facts and circumstances leading to the Notices and the order impugned in the present Petition are as follows :-

i) The Petitioner is a charitable Trust registered under section 12A of the Act. Sir Jamsetjee Jejeebhoy, First Baronet, a Parsi Merchant and a Philanthropist, was the settlor of the Petitioner in 1838.

ii) The Petitioner filed its Return of Income for the A.Y.2018-2019 in which it declared its total income at Rs.1,96,983/-. The Petitioner is assessed in Mumbai. The Petitioner’s Return of Income claimed exemption Page 3 of 32 under Section 11 of the Act. The Petitioner also filed Form No. 10, which contains a statement to be furnished to the Assessing Officer under Section 11 (2) of the Act. It is the case of the Petitioner that along with the statement, the Petitioner also pointed out that the Trustees of the Petitioner have passed a Resolution on 26^th September 2018, by which a sum of Rs.3,17,00,000/-, which is 66.72% of the Income of the Petitioner for the A.Y. 2018-2019, would be accumulated or set apart for carrying out the purposes of the Trust. The Petitioner accumulated or set apart this amount for the purposes of medical, education and social relief to the Members of the Zoroastrian community and conservation, maintenance and upkeep of properties till March 31, 2023.

iii) The Petitioner’s case was selected for scrutiny, and the 1^st Respondent issued a Notice dated 22^nd September 2019 under Section 143 (2) of the Act, read with Rule 12E of the Income Tax Rules, and sought clarification on the issue which is “Accumulation of Income by Trust”.

iv) Thereafter, on 10^th January 2020, the 1^st Respondent issued notice to the Petitioner under Section 142 (1) of Page 4 of 32 the Act and sought details, as more particularly, mentioned therein, and in particular, the details of accumulation under Section 11 (2), if any, in the last ten years and the details of utilization as per the chart given in the notice. By this notice, the 1st Respondent also sought copies of the Application in Form 10 and the Resolution of Trustees in this regard for each accumulation under section 11(2), in case of an amount spent in the year under consideration.

v) On 30th January 2020, the Petitioner, by its letter, provided a true copy of the Resolution dated 26th September 2018 of the Trustees of the Petition