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The appeal by the revenue was therefore dismissed..

As a result, the assessment proceedings were set aside and remanded for fresh consideration in accordance with law..

The Court’s intervention ensures that the petitioner’s application is considered on its merits by the competent authority, i.e., the Assessing Officer, within a stipulated period..

The CIT (Exemption) is directed to reconsider the exemption application after properly evaluating the audit report and employing the liberal condonation powers envisaged by Section 119(2)(b) and clarified in CBDT Circular No.

As an actionable measure, any demands or refund adjustments arising out of such procedurally flawed reassessment orders must be stayed and reversed until the final resolution of appellate proceedings..

Assessees facing similar circumstances must be prepared to substantiate their claims and cannot rely solely on procedural lapses or challenge the sufficiency of the AO’s reasons without credible evidence..

The court must base its decision on the cogency and authenticity of the evidence provided by the claimant..

However, both the Revenue and the assessee must remain alert to the final outcome of the pending SLP, as the present relief is conditional upon it..

The actionable takeaway is that entities receiving similar subsidies from the RBI can safely exclude such receipts from their computation of assessable interest for the purposes of the Interest Tax Act..

Accordingly, the impugned reassessment notice was set aside, and relief was granted in favour of the assessee..