Summary: The Bombay High Court canceled several notices sent to the Sir Jamsetjee Jejeebhoy Charity Fund by the Income Tax Department. The court found that the department's actions were based on wrong information and were more about changing their mind rather than finding new evidence.
In 2024, the Sir Jamsetjee Jejeebhoy Charity Fund, a registered charity in Mumbai, got notices from the Income Tax Department. These notices were about checking the fund's income for the year 2018-2019, questioning how the fund saved money and the details provided in Form 10.
Initial Notices: The Income Tax Officer sent notices in August 2024, claiming the fund didn't specify why they were saving money. They said the fund's Form 10 only repeated the charity's goals without specific details.
Sir Jamsetjee Jejeebhoy Charity Fund's Response: The fund argued that their finances had already been checked and accepted before. They said reopening the case was just the department changing their mind, not because of new information.
Following Rules: The court found that the charity fund had followed the rules of Section 11(2) of the Income Tax Act. The fund had submitted Form 10 with a plan detailing the savings for medical, educational, and social help, which was considered enough.
Mistake in Notices: The court noted that the Income Tax Department's notices were based on wrong facts. The plan dated 26th September 2018 was submitted, which went against the department's claim that it was made in January 2020.
"The reasons given by the Income Tax Officer that there is no compliance with Section 11(2) of the Act is factually wrong."
The court referred to several previous court decisions, emphasizing that checking finances again can't be based on just changing their mind without new evidence.
Decision: Judges B. P. Colabawalla and Amit Satyavan Jamsandekar ruled in favor of the fund, canceling the disputed notices and orders.
The court decided that tax authorities cannot reopen financial checks just because they changed their mind without real new evidence. The Sir Jamsetjee Jejeebhoy Charity Fund showed they followed tax laws, leading to the cancellation of the notices.
This case highlights the importance of keeping accurate records and being transparent in financial dealings for charitable organizations.
