Law:

Section:

Section 132 of the Income-tax Act, 1961 - Search and seizure - General - Assessment years 1984-85 to 1990-91 - Whether appeal or application provided by statute under section 132(11) is against order passed under section 132(5) and, hence, it requires iden- tical application of mind and consideration even by appellate auth-ority - Held, yes - Pursuant to search and seizure procee- dings conducted at premises of assessee-trust, ITO seized fixed deposit receipts - Assessee claimed exemption under section 10(22) - Assistant Commissioner in order under section 132(5) rejecting claim of assessee determined tax liability of assessee - Pursuant to assessee's application under section 132(11), Commissioner passed order under section 132(12) and refused to consider claim for exemption on ground that it would result in premature decision of matter which needed to be decided during course of regular assessment proceedings - Whether since there was failure to exercise jurisdiction on part of Commissioner, matter was to be remanded back to Commissioner to prima facie consider correctness or otherwise of claim of exemption made by assessee - Held, yes FACTS The assessee-trust was running about 12 educational institutions. Pursuant to the search and seizure proceedings conducted at the premises of the assessee-trust, the ITO seized FDRs of certain amount. The assessee claimed exemption under section 10(22). The Assistant Commissioner in order passed under section 132(5) rejecting claim of assessee, determined the tax liability of the assessee along with the interest. The assessee challenged the said order of the Assistant Commissioner by filing application under section 132(11). The Commissioner disposed of the said application by passing order. The assessee's case was that the Commissioner passed order without considering the assessee's contention that it was exempt from provisions of Act because of exemption available in Public Trust in view of section 10(22), and on appeal under section 132(12), the Commissioner was duty bound to record a finding about the same and since that had not been recorded, the order of the Commissioner was liable to be quashed and set aside. HELD…

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