DATAR KULMANDAL,PUNE V. INCOME TAX OFFICER (EXEMPTION), WARD -1, PUNE

ITA 3239/PUN/2025

AI Insights

The case involves DatarKulmandal, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) [NFAC], which confirmed the addition of Rs.3,22,574 as undisclosed income due to the denial of exemption under section 11 of the Income Tax Act, 1961. The Assessing Officer (AO) had initially added this amount to the assessee's income, stating that the assessee did not have registration under section 12A, which is necessary to claim exemptions under section 11. The CIT(A) upheld the AO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal, referencing a previous case where the issue of registration under section 12A was restored to the CIT, Exemption, decided to set aside the CIT(A)'s order and remand the case back to the AO for a de novo assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836438 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Appeal Filed On: 26-12-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SADANANDA
• Assessee Lawyers: ABHAY A AVCHAT; DENYING CLAIM OF EXEMPTION UNDER SECTION
• Keywords: Opportunity of being heard; Maximum Marginal Rate
• Section: 143(3); 11; 12A

Judgement Text

" आयकर अपीलीय अधिकरण ”एस एम सी” न्यायपीठ पुणेमें। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकरअपऩलसं. / ITA No.3239/PUN/2025 निर्धारणवषा / Assessment Year:2022-23 DatarKulmandal, C/o.Mr.Rajiv Agharkar, Flat No.13, Shivalay Apartment, Near Bharat Natya Mandir, 119, Sadashiv Peth, Pune – 411030. Vs The Income Tax Officer(Exemptions), Ward-1, Pune. PAN:AADTD1726H Appellant/ Assessee Respondent /Revenue Assessee by Shri Abhay A Avchat Revenue by Shri Sadananda – JCIT(DR) Date of hearing 10/02/2026 Date of pronouncement 12/02/2026 आदेश/ ORDER PER VINAY BHAMORE, JM : This is an appeal filed by the Assessee against the order of Ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2022-23dated 17.10.2025 emanating from the Assessment Order passed under section 143(3) r.w.s. 144Bof the I.T.Act, 1961 dated 26.02.2024. Printed from counselvise.com ITA No.3239/PUN/2025 [A] 2 2. The Assessee has raised the following grounds of appeal : “1. The learned AO erred in making addition of Rs.3,22,574/- being gross receipts of assessee by denying claim of exemption under section 11 and taxing the same as undisclosed income and the learned CIT (Appeals) erred in confirming the same 2. The AO erred in disallowing the claim of exemption under section 11 in assessee's case and in making addition of gross receipts and the Ld. CIT A erred in sustaining the same 3. The learned AO erred in not considering and allowing deduction of expenses incurred while assessing income of assessee since net gain / surplus is taxable and not gross receipts, and the learned CIT (Appeals) erred in confirming the same. 4. The AO has erred in treating gross receipts of assessee as taxable income and taxing it at maximum marginal rate. 5. The learned AO erred in solely relying on the order passed by the CIT Exemption refusing to renew registration u/s 12AB. 6. The assessee trust is liable to pay tax at normal slab rate on the net surplus and not on gross receipts since it is entitled to claim threshold income limit as AOP 7 The learned CIT Appeals erred in dismissing assessee's appeal without affording adequate opportunity of being heard and without considering assessee's submissions 8. The Assessee prays before your honour to allow any other relief as available under the income tax law 9 The appellant craves leave to add, revise, amend or alter any of the grounds of appeal” Findings & Analysis : 3. We have heard both the parties and perused the records. In this case, Assessee had filed Return of Income for A.Y.2022-23 on 19.09.2022 declaring total income at Rs.NIL. During the scrutiny proceedings, Assessing Officer observed that Assessee do not have Printed from counselvise.com ITA No.3239/PUN/2025 [A] 3 registration u/s.12A of the Act. Assessing Officer made addition of Rs.3,22,574/-. The relevant paragraph 4.6 of the assessment order is reproduced here as under : “4.6 Conclusion drawn:- During the year, the assessee was in receipt donations& other miscellaneous incomesof Rs. 3,22,574/-and claimed all these receipts exempt u/s 11 of the Act. However, as the CIT Exemptions, Pune, vide order dated31.03.2023 rejected the assessee's application for registration u/s 12A(1) of the Act. Therefore, the assessee's claim of exemptions u/s 11 of the Act become automatically invalid and these receipts of Rs.3,22,574/- is assessee's undisclosed income of the year and is added to the total income of the year. Penalty proceedings u/s 270A of the IT Act for under-reporting of income is also initiated separately for under reporting of income.” 4. Being aggrieved with the above assessment order, Assessee filed an appeal before the Ld.CIT(A)/NFAC. Not being satisfied with the submission of the assessee, Ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing as under :- “5.1.4 From the above, it is noted that document furnished could not be accepted as proof as a documentary evidence in support of the exemption u/s 11 of the Act as the CIT Exemptions, Pune, vide order dated 31.03.2023 rejected the appellant's claim of the exemptions u/s 11 of the Act become automatically invalid and these receipts of Rs.3,22,574/- is appellant's undisclosed income of the year. Accordingly, it is held that the action of the AO for making disallowance of exemption u/s 11 of the Act is hereby upheld. Hence, addition/disallowances made by the AO is confirmed. The ground of appeal is dismissed. 6. In the result, the appeal is dismissed.“ 5. It is the above order against which the assessee is in appeal before this Tribunal. Printed from counselvise.com ITA No.3239/PUN/2025 [A] 4 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the Assessing Officer has taxed the entire receipts of the assessee stating that the assessee do not have section 12A registration. In this regard, Ld. AR brought to the notice of the Bench that a coordinate bench of this Tribunal by allowing the appeal of the assessee in ITA No.1052/PUN/2024 order dated 27.02.2025 has already restored the issue of grant of registration u/s 12A of the IT Act to the file of Ld. CIT, Exemption for de novo adjudication. Under these circumstances, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of the Assessing Officer with a direction to reframe the assessment de novo in the light of fresh decision of Ld. CIT, Exemption after providing reasonable opportunity of hearing to the assessee. However, in this regard, we are of the considered opinion that even if the assessee do not have section 12A registration whole of the receipts cannot be taxed rather only net profit can be taxed. Accordingly, grounds of appeal raised by the Assessee are allowed for statistical purpose. Printed from counselvise.com ITA No.3239/PUN/2025 [A] 5 7. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 12 February, 2026. Sd/- Sd/- Dr.DIPAK P. RIPOTE VINAY BHAMORE ACCOUNTANT MEMBER JUDICIAL MEMBER पपणे / Pune; ददिधंक / Dated : 12 Feb, 2026/ SGR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1. अपऩलधर्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “एस एम सऩ” बेंच, पपणे / DR, ITAT, “SMC” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER, / / TRUE COPY / / सहधयक रनिस्ट्रधर /Assistant Registrar आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. Printed from counselvise.com "