COMMISSIONER OF INCOME TAX-ILL, PUNE versus SINHGAD TECHNICAL EDUCATION SOCIETY

Citation: [2017] 8 S.C.R. 463 · Decided: 29-08-2017 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

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Judgment (excerpt)

[2017] 8 S.C.R. 463 
COMMISSIONER OF INCOME TAX-Ill, PUNE 
v. 
SINHGAD TECHNICAL EDUCATION SOCIETY 
(Civil Appeal No. 11080 of 2017) 
AUGUST 29, 2017 
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.I 
Income Tax Act, 1961: 
s.153C - Proceedings under - Validity of-Assessment order 
A 
B 
- Pursuant to the notice u/s. l 53C - Against respondent-assessee 
C 
(a charitable educational institution) - Appeal against - Before 
· Commissioner of Income Tax (Appeals) - Partially allowed - Jn 
appeal before Income Tax Appellate Tribunal (JTAT) additional 
ground pertaining to jurisdiction uls. l 53C raised - ITAT quashed 
the notice/proceedings u/s. l 53C in respect of four assessment years 0 
- Order of ITAT confirmed by High Court - On appeal, held: ITAT 
rightly permitted the additional ground to be raised and correctly 
dealt with the ground on merit as well - However, it is clarified that 
by this judgment the Court has not given any clean chit to the 
assessee insofar as the findings to the effect that the assessee had 
been indulging in profiteering and collecting capitation fee. 
E 
Dismissing the appeals, the Court 
HELD: 1. So far as permissibility to raise the additional 
ground pertaining to jurisdiction under Section 153C of the 
Income Tax Act, 1961, is concerned, the Income Tax Appellate 
Tribunal (ITAT) permitted this additional ground by giving a 
F 
reas·on that it was a jurisdictional issue taken up on the basis of 
facts already on the record and, therefore, could be raised. In 
this behalf, it was noted by the ITAT that as per the provisions of 
Section 153C of the Act, incriminating material which was seized 
had to pertain to the Assessment Years in question and it is an 
G 
undisputed fact that the documents which were seized did not 
establish any co-relation, document-wise, with these four 
Assessment Years. Since this requirement under Section 153C 
of the Act is essential for assessment under that provision, it 
becomes a jurisdictional fact. The reasoning is logical and valid, 
463 
H 
464 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
A having regard to the provisions of Section 153C of the Act. The 
ITAT had scanned through the Satisfaction Note and the material 
which was disclosed therein was culled out and it showed that 
the same belongs to Assessment Year 2004-05 or thereafter. Thus, 
the ITAT rightly permitted this additional ground to be raised 
B and correctly dealt with the same ground on merits as well. Order 
of the High Court affirming this view of the Tribumtl is, therefore, 
without any blemish. [Paras 18 , 1911472-D-Gf 
2. The assessment order covered eight Assessment Years 
i.e. Assessment Year 1999-2000 to Assessment Year 2006-07. 
Insofar as Assessment Year 1999-2000 is concerned, same was 
C covered under Section 147 of the Act which means in respect of 
that year, there were re-assessment proceedings. Insofar as 
Assessment Year 2006-07 is concerned, it was fresh assessment 
under Section 143(3) of the Act. Thus, insofar as assessment 
under Section 153C read with Section 143(3) of the Act is 
D concerned, it was in respect of Assessment Years 2000-01 to 2005-
06. Assessment order is set aside only in respect of four such 
Assessment Years that too on the technical ground. This objection 
pertaining to the four Assessment Years in question does not 
relate to the other two Assessment Years, namely, 2004-05 and 
2005-06. Likewise, this decision has no bearing in respect of 
E assessment done qua Assessment Year 1999-2000 as well as 
Assessment Year 2006-07. The necessary consequence would 
be that insofar as the conclusions of the AO in his assessment 
order regarding the activities of the trust not being genuine and 
not carried out in accordance with the trust deed or cancellation 
f 
of registration, denial of benefits of Sections 11 and 12 etc. are 
concerned, the same would not be affected by this judgment. It 
is, thus, clarified that this Court has not given any clean chit to 
the assessee insofar as the finding of the AO to the effect that 
the assessee had been indulging in profiteering and collecting 
capitation fee is concerned. Whatever other repercussions are 
G there, based on these findings, they can follow. This Court was 
not informed and, therefore, unaware of any challenge to the 
assessment order in respect of other four Assessment Years and 
outcome thereof. Wherever any such proceedings are pending, 
same would be considered without being affected by the outcome 
H of thes

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