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

Shanti Educational Trust, a registered non-profit organisation, has been assessed by the Assessing Officer under section 270(10). The Assessing Officer is satisfied that the trust committed a specified violation mentioned in section 351(1). Which course of action follows from section 270(13)?

The Assessing Officer must send a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration. He cannot make the assessment order under section 270(10) until he gives effect to the order passed on that reference under section 351(2)(ii)(A) or (B).

  1. AHe completes the assessment under section 270(10) and recommends withdrawal of registration afterwards
  2. BHe sends a reference to the Principal Commissioner or Commissioner to withdraw the approval or registration, and cannot make the assessment without giving effect to the order passed on that reference under section 351(2)(ii)(A) or (B)Correct
  3. CHe directly withdraws the registration and assesses the entire income as taxable
  4. DHe recommends to the Central Government to withdraw approval, which then forwards its order to the trust

Explanation

Section 270(13) requires a reference to the Principal Commissioner or Commissioner, and bars the assessment order under section 270(10) until effect is given to their order under section 351(2)(ii)(A) or (B). Option D describes section 270(14), which applies to a university, college or institution under section 45(3)(a) and involves the Central Government. Option A reverses the sequence.

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