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CA Final · Direct Tax Laws & International Taxation · Assessment of Various Entities

Anand Charitable Research Association is an entity referred to in section 270(12)(a) and is required to furnish a return under section 263(1)(a)(iv). The Assessing Officer believes it has contravened conditions listed in Schedule III. Which statement correctly reflects section 270(11)?

The Assessing Officer cannot deny section 11 on his own view. He must first intimate the contravention to the Central Government or prescribed authority, and the assessment without giving effect to section 11 is allowed only after the approval is withdrawn or the notification is rescinded.

  1. AThe Assessing Officer may make the assessment on his own, denying section 11 benefit, as soon as he forms the view that a contravention has occurred
  2. BThe Assessing Officer may deny section 11 benefit only if the entity has filed its return late
  3. CThe Assessing Officer must intimate the contravention to the Central Government or prescribed authority, and an assessment without giving effect to section 11 can be made only after the approval is withdrawn or the notification rescindedCorrect
  4. DThe Assessing Officer must withdraw the approval himself before making the assessment

Explanation

Section 270(11) bars an assessment without giving effect to section 11 unless two conditions are met: the Assessing Officer has intimated the contravention to the Central Government or prescribed authority, and the approval has been withdrawn or the notification rescinded. The Assessing Officer only intimates and does not withdraw approval himself, so option D is wrong, and option A skips both conditions.

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