Law: Income Tax Act, 1961

Section: 148

Income-tax-Reassessment---Gross receipts exceeding Rs.50,000---Initiation of proceedings under S.148 upheld by Tribunal for some years---Question of fact---Reopening of assessments justified---Indian Income Tax Act, 1961, Ss. 148 & 256. The assessee was an association of rice millers with the object of promoting the common interests of the members of the association. The Assessing Officer found that it indulged in various activities, realised fees and donations and the activities were not confined to its legitimate functions. It also was found to have made donations to political parties. Hence, the -Assessing Officer found that the income would be taxable and it would not be entitled to exemption under section 11 of the Income Tax Act, 1961. On that basis some of the earlier assessments were reopened. The Tribunal upheld that action as the gross receipts exceeded Rs. 50,000. On a reference: Held, that the finding of the Tribunal was a question of fact and, therefore, the initiation of proceedings under section 148 was justified. JUDGMENT A. K. MATHUR, C. J. ---This is an income-tax reference under section 256(1) of the Income Tax Act, 1961, at the instance of the assessee and the following question of law has been referred by the Tribunal for answer of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that initiation of proceedings under section 148 of the Income-tax Act, 961, was justified?" The brief facts giving rise to this reference are thus: The assessee is an association of rice millers. The objects of the association are advancement of common interests of the members of the association in accordance with the Government, policies formulated from time to time. The objects do not mention carrying on any activity for profit. According to the assessee, the object of the association was advancement of charitable purposes as defined in section 2(15) of the Act. The Assessing Officer, however, found that the association indulged in various activities whereby it had not only realised fees regularly from its members but also realised large amounts by way of donations, etc. He further found that the…

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