CHAIR LITERARY TRUST,UKHRA, PASCHIM BARDHAMAN V. I.T.O., WARD - 2(1), EXEMPTION, DURGAPUR

ITA 653/KOL/2025

AI Insights

The case involves Chair Literary Trust, which appealed against the order of the Ld. Addl./JCIT(A)-4, Mumbai, concerning the assessment year 2019-20. The primary issue was the non-allowance of exemption under section 11 of the Income Tax Act, 1961, and the inclusion of the entire quantum of receipts amounting to Rs. 18,41,785 as taxable income, without allowing any expenses. The trust had not filed Form 10B along with its return of income, and although it obtained registration under section 12AA of the Act effective from AY 2020-21, it was not registered during the year in question. The ITAT found that the income of the trust should be assessed based on total receipts minus the expenses incurred, regardless of its status as a trust or an Association of Persons (AOP)/Body of Individuals (BOI).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707103 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 28-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Set aside; Revised return
• Section: 11; 12AA; 12; 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH”, KOLKATA SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 653/KOL/2025 (Assessment Year 2019-20) Chair Literary Trust, Vivekanand Path, Dakshinayan, Ukhra, Bardhaman - 713211 [PAN: AACTC3996R] ……..…...…………….... Appellant vs. ITO Ward 2(1), Exemption, Durgapur, Aayakar Bhavan, City Centre, Durgapur - 713216 ................................. Respondent Appearances by: Assessee represented by : Prasenjeet Ram, A.C.A Department represented by : Raja Sengupta, CIR-DR Date of concluding the hearing : 07.07.2025 Date of pronouncing the order : 09.07.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER 1. This appeal arises from order dated 31.01.2025, passed by the Ld. Addl./JCIT(A)-4, Mumbai u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”). 1.2 In this case, the assessee had approached the Ld. Addl./JCIT(A) with the grievance that the Ld. AO-CPC had passed an order u/s 143(1) of the Act through which the entire quantum of receipts of Rs. 18,41,785/- had been brought to tax since the Form 10B had not been filed along with return of income. Admittedly, the assessee-trust obtained registration u/s 12AA of the Act on 02.09.2019, w.e.f. AY 2020-21. Thus, for the year under consideration, there was no registration available with the assessee for seeking exemption. The Ld. Addl./JCIT(A) has given the following findings while dismissing appeal of the assessee: 2 ITA No. 653/Kol/2025 Chair Literary Trust “6.1.5 It is evident that the appellant had not filed Form 10B after due date in violation of Rule 12A(1)(b) of Income Tax Rules, 1962. It is a trite law that if a thing is said to be done in a particular manner, it shall be done in that manner and its performance in any other mode or fashion shall be of no consequence. Therefore, in application of the above decisions of the apex court and also the mandated provisions of the statute, the Assessing Officer has rightly disallowed the exemption claimed as per the provisions of section 143(1)(a)(ii). 6.2 With regard to ground No. 2 i.e. as per appellants submission it is contested by the appellant that, when a trust is not registered u/s 12AA of the Income Tax Act, 1961, it may be assessed as an AOP/BOI under Income Tax Act, 1961. 6.2.1 It is evident that the appellant has not compiled with the conditions for applicability of sections 11 & 12 of the Act. Further, the appellant has not filed any revised return with regard to change in status of the appellant before the AO during the assessment proceedings. Hence, the appellants ground to consider it as an AOP/BOI rather than Trust during the appellate proceedings is not considered and hence dismissed. 6.2.2. Accordingly, I am not inclined to interfere with the decision of the Assessing Officer. These grounds of appeal are therefore dismissed.” 1.2 Aggrieved with this action of Ld. Addl/JCIT(A), the assessee has approached the ITAT with the grounds of appeal basically challenging the non-allowance of exemption u/s 11 of the Act, and more importantly what has been challenged is the action of bringing to tax the entire quantum of receipts, without allowing for any expenses. 2. Before us, the Ld. AR argued that even though the assessee-trust did not have the requisite exemption but still the benefit of expenses should have been given to the assessee even if it was to be assessed as an AOP. The Ld. AR assailed the action of Ld. Addl/JCIT(A) contained in paragraph 6.2.1 (supra). 2.1 The Ld. DR relied on the orders of authorities below. 3. We have carefully considered the submissions of the Ld. AR/DR and have also gone through the records before us. It is obvious that the assessment of income of the assessee-trust has to be on the basis of total receipts minus the expenses incurred. Thus, the Ld. AO is directed to tax only the net income, if any, and work out the tax thereon. With these remarks, we set aside the impugned order and remand this matter back to the file of Ld. AO for computing taxable income as directed herein. 3 ITA No. 653/Kol/2025 Chair Literary Trust 4. In result, this appeal is allowed for statistical purposes. Order pronounced on 09.07.2025 Sd/- Sd/- (Pradip Kumar Choubey) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 09.07.2025 AK, Sr. P.S. Copy of the order forwarded to: 1. Chair Literary Trust 2. ITO Ward 2(1), Exemption, Durgapur 3. CIT(A) 4. CIT 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "