B NARAYANA DAS SHYAM SUNDER LOYA CURE THALASSEMIA WELFARE TRUST,HYDERABAD V. ITO, EXEMPTION WARD-1(1), HYDERABAD

ITA 273/HYD/2025

AI Insights

The case involves the B. Narayan Das Shyam Sunder Loya Cure Thalassemia Welfare Trust, which appealed against the order of the learned CIT(A) concerning the assessment year 2018-2019. The Trust, engaged in charitable activities, had its income tax return processed under sections 143(1) and 143(3) of the Income Tax Act, 1961, where it claimed exemption under section 11 for a corpus donation received for constructing a research block. The Assessing Officer rejected this exemption, leading to a series of appeals. The ITAT's decision to set aside the CIT(A)'s order and remand the case for re-evaluation was based on the principle that the order under section 143(1) is subsumed by the later order under section 143(3).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360481 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: S.RAMA RAO

Judgement Text

" 1 ITA.No.273/Hyd./2025 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD [THROUGH HYBRID HEARING] BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.273/Hyd./2025 Assessment Year 2018-2019 B. Narayan Das Shyam Sunder Loya Cure Thalassemia Welfare Trust, Hyderabad. PIN –500 016. PAN AACTB8835A Telangana. vs. The Income Tax Officer, [Exemption], Ward-1(1), Hyderabad. (Appellant) (Respondent) For Assessee : Shri S. Rama Rao, Advocate For Revenue : Dr. Sachin Kumar, Sr. AR Date of Hearing : 15.05.2025 Date of Pronouncement : 20.05.2025 ORDER PER MANJUNATHA G. : This appeal has been filed by the Assessee-Trust against the order dated 10.07.2024 of the learned CIT(A)- National Faceless Appeal Centre [in short the “NFAC”] Delhi, relating to the assessment year 2018-2019. 2 ITA.No.273/Hyd./2025 2. Briefly stated facts of the case are that, the assessee-trust is a registered trust carrying on the charitable activity of running a Hospital for Thalassemia disorder. The Trust made an application for registration u/sec.12AA of the Income Tax Act, 1961 [in short “the Act”] before the Commissioner of Income-Tax-(E), Hyderabad on 28.03.2019. The learned CIT-(E) vide order dated 28.09.2019 granted registration to the assessee-trust from the assessment year 2019-2020. The assessee-trust has filed it’s return of income for the assessment year 2018- 2019 on 16.10.2018 admitting Rs.NIL income after claiming exemption u/sec.11 of the Act. During the previous year relevant to assessment year under consideration, the assessee-trust has received Rs.1,09,00,000/- donation for construction of a research block. The assessee-trust treated the said donation as ‘corpus’ donation since it has been paid for specific purpose of construction of research block. The Assessing Officer-CPC processed the return of income filed by the assessee-trust and intimation u/sec.143(1) of the Act dated 26.09.2019 has been issued and determined 3 ITA.No.273/Hyd./2025 the total income of the assessee-trust at Rs.1,09,00,000/- and taxes payable at Rs.48,04,844/- by rejecting the exemption claimed by the assessee-trust u/sec.11 of the Act. 2.1. Further, the case of the assessee-trust has been selected for scrutiny and notice u/sec.143(2) of the Act dated 26.09.2019 was issued to the assessee-trust. The assessment has been completed u/sec.143(3) r.w.s.143(3)(a) and 143(3)(b) of the Act dated 05.04.2021 and determined the total income of the assessee-trust as per computation sheet which is in furtherance to the order u/sec.143(1) of the Act. 3. The assessee-trust has filed an appeal against the order passed u/sec.143(3) of the Act dated 05.04.2021 before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee-trust. The assessee-trust has filed further appeal before the Tribunal against the order of the learned CIT(A). The ITAT, Hyderabad Bench in ITA.No.775/ Hyd./2024 vide order dated 14.10.2024 has set-aside the appeal of the assessee-trust to the file of learned CIT(A) and 4 ITA.No.273/Hyd./2025 directed the learned CIT(A) to decide the appeal filed by the assessee-trust against the order passed by the Assessing Officer u/sec.143(3) of the Act dated 05.04.2021 along with appeal filed by the assessee-trust against the intimation u/sec.143(1) of the Act. 4. Further, the learned CIT(A) disposed of the appeal filed by the assessee-trust against the order dated 26.09.2019 passed u/sec.143(1) of the Act on 23.01.2025 and dismissed the appeal by holding that, since the appeal filed by the assessee-trust against the order passed u/sec.143(3) is pending before the Tribunal for adjudication, the present appeal filed by the assessee against the order passed u/sec.143(1) subsumed into appeal against the order u/sec.143(3) and the Appropriate Authority now is the Tribunal. Therefore, dismissed the appeal filed by the assessee against the intimation u/sec.143(1) of the Act on the ground of redundant and has dismissed the appeal as infructuous. 5. Aggrieved by the order of the learned CIT(A), the assessee-trust is now in appeal before the Tribunal. 5 ITA.No.273/Hyd./2025 6. Shri S. Rama Rao, Advocate-Learned Counsel for the Assessee referring to the sequence of events submitted that, the return of income filed by the assessee-trust has been processed u/sec.143(1) of the Act and against this order the assessee-trust has filed an appeal before the learned CIT(A). The Assessing Officer has passed order u/sec.143(3) and once again the assessee has filed appeal before the learned CIT(A). The learned CIT(A) disposed of the appeal filed by the assessee-trust against the order passed u/sec.143(3) of the Act and the same has been challenged by the assessee-trust before the Tribunal. The ITAT, Hyderabad Bench in ITA.No.775/Hyd./2024 vide order dated 14.10.2024 (supra) has set-aside the issue to the file of learned CIT(A) for reconsideration along with the pending appeal filed by the assessee-trust against the intimation u/sec.143(1) of the Act. Since the appeal filed by the assessee is against the order passed u/sec.143(3) of the Act has been set-aside to the file of learned CIT(A) for reconsideration, the present appeal filed by the assessee before the ITAT also needs to be set-aside to the file of 6 ITA.No.273/Hyd./2025 learned CIT(A) to re-consider the issue on merits because, once the assessment order has been passed u/sec.143(3), then, earlier order passed u/sec.143(1) of the Act subsumed or merged with the assessment order passed by the Assessing Officer. Therefore, he submitted that, this issue may be set-aside to the file of learned CIT(A) with appropriate directions. 7. Dr. Sachin Kumar, Sr. AR for Revenue, on the other hand supporting the order of the learned CIT(A) submitted that, the assessee should have brought to the notice of the learned CIT(A) with respect to the order passed by the Assessing Officer and fairly agreed that since the appeal filed against the order passed u/sec.143(3) has been set-aside to the file of the learned CIT(A), this appeal also may be set-aside to the file of learned CIT(A) with appropriate directions. 8. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to the settled position of law that, once an order has been passed 7 ITA.No.273/Hyd./2025 u/sec.143(3) of the Act, then, any earlier order passed u/sec.143(1) of the Act for the very same assessment year is subsumed or merged with the subsequent order passed by the Assessing Officer u/sec.143(3) of the Act. In the present case, the Assessing Officer has passed order u/sec.143(1) of the Act on 26.09.2019 and further has passed order u/sec.143(3) of the Act on 05.04.2021. The issue before the Assessing Officer in both the orders are one and the same i.e., exemption claimed by the assessee on corpus donation received for specific purpose. The assessee-trust has filed appeal against both the orders before the learned CIT(A). The learned CIT(A) disposed of the appeal filed by the assessee-trust against the order passed by the Assessing Officer u/sec.143(3) of the Act on 10.07.2024 for non- prosecution and the assessee-trust has challenged the said order before the Tribunal. The ITAT, Hyderabad Bench in ITA.No.775/Hyd./2024 vide order dated 14.10.2024 (supra) has remitted the issue back to the file of learned CIT(A) with a direction to reconsider the issue along with the pending appeal filed by the assessee-trust against the intimation 8 ITA.No.273/Hyd./2025 issued u/sec.143(1) of the Act. In the meantime, the learned CIT(A) disposed of the appeal filed by the assessee-trust against the order passed u/sec.143(1) of the Act dated 26.09.2019 on 23.01.2025 and dismissed the appeal filed by the assessee on the ground that since the appeal filed by the assessee-trust against the order passed u/sec.143(3) of the Act is pending before the Tribunal, the earlier order passed u/sec.143(1) of the Act is subsumed into appeal against the order u/sec.143(3) and Appropriate Authority to decide this appeal is Tribunal. Since the first appeal filed by the assessee against the order passed u/sec.143(3) has been set-aside to the file of the learned CIT(A), we are of the considered view that, this issue also needs to be remitted back to the file of learned CIT(A) to decide the issue on merits, since the order passed u/sec.143(1) is merged or subsumed with the order passed u/sec.143(3) of the Act. Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of learned CIT(A) for fresh consideration and also direct the learned CIT(A) to re- consider the issue on merit along with pending appeal of the 9 ITA.No.273/Hyd./2025 assessee-trust filed against the order passed u/sec.143(3) of the Act. 9. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 20.05.2025 Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 20th May, 2025 VBP Copy to 1. B. Narayan Das Shyam Sunder Loya Cure Thalassemia Welfare Trust, P.No.1&2, Survey No.50/3, Shivarampally Police Acad. Rajendra Nagar, Hyderabad – 500 016. Telangana. 2. The Income Tax Officer (Exemptions), Ward-1(1), Aaykar Bhavan, Hyderabad. 3. The Pr. CIT, Central Hyderabad 4. The DR ITAT “B” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// "