INCOME TAX ACT, 1961

Section 245C read with Section 245D

Settlement Commission - Application filed by assessee - Charitable trust - Whether in terms of section 245F(2) DGIT could issue SCN, on one of issue which was pending before settlement commission

Assessee was a charitable trust, and was granted approval under section 10(23C)(iv). Pursuant to search and seizure operations under section 132 in offices and residential premises of various members of trust group. During operations, cash and jewellery along with incriminating documents were seized. Thereafter, assessee filed an application under section 245C before Settlement Commission and same was allowed to be proceeded with under section 245D(1). Meanwhile, DGIT passed order withdrawing approval granted under section 10(23C)(iv) with retrospective effect. Held: By virtue of section 245F(2), DGIT was not empowered to step into shoes of Settlement Commission (ITSC) and issue the show cause notice. One of issues which was pending before ITSC, was for violation of the conditions of section 11/section 10(23C). While that being so, when DGIT was clearly without jurisdiction to issue the SCN, there was no justification on his part to proceed further on SCN and pass order effecting retrospective withdrawal of the approval under section 10(23C)(iv).

REFERRED : CIT v. Adhiparasakthi Charitable Medical [W.P.Nos.34040 & 34041 of 2014 And M.P.Nos.1 And 1 of 2014, dt. 24-10-2020], Vidya Mandir Trust v. CIT [Tax Case (Appeal). No. 674 of 2013, dt. 2-12-2013]

FAVOUR : In assessee's favour.

A.Y. :

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