DCIT EXEMPTIONS, CIRCLE-1, MANGALURU V. NAVODAYA GRAMA VIKAS CHARITABLE TRUST, MANGALORE

ITA 1562/BANG/2024

AI Insights

The case involves the DCIT (Exemptions), Circle-1, Mangalore as the appellant and Navodaya Grama Vikas Charitable Trust as the respondent. The appeal was against the order passed by the Commissioner of Income Tax (Appeals)-2, Panaji, which had partly allowed the appeal of the trust against the assessment order under section 143(3) of the Income Tax Act. The trust, engaged in charitable activities, had its income assessed and was denied certain benefits under section 11 of the Act, leading to the current appeal. The primary contention in the appeal was the tax effect, which was found to be below the required threshold for maintainability as per the relevant Board Circular.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712636 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Rectification of order; Charitable institution
• Section: 143(3); 154; 11; 12AA

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “B,”BANGALORE Before Shri Prashant Maharishi, Hon’ble Vice President & Shri Soundararajan K, Hon’ble Judicial Member ITA No.1562/Bang/2024 (A.Y.2018-19) DCIT (EXEMPTIONS) Albuquerque House Pandeshwar, Mangaluru Karnataka – 575001 vs. Navodaya Grama Vikas Charitable Trust SCDCC Bank Ltd Head Office Building Kodialbail Mangalore Karnataka - 575003 PAN: AAATN7594E (Applicant) (Respondent) Assessee Represented by: Ms. Sunaina Bhatia, CA Department Represented by: Sri Tamba Mahendra, JCIT Date of Hearing:23.07.2025 Date of Pronouncement 30.07.2025 O R D E R Per Prashant Maharishi, Vice President: 1. Captioned appeal is filed by DCIT (Exemptions), Circle-1, Mangalore for the A.Y. 2018-19 against the Appellate Order passed by the Commissioner of Income Tax (Appeals)-2, Panaji (“the Ld.CIT(A)”) dated 24.06.2024 wherein the appeal filed by the assessee against assessment order passed under section 143(3) Printed from counselvise.com 2 ITA No.1562/Bang/2024 Navodaya Grama Vikas Charitable Trust 2 of the Act determining the total income of the assessee at Rs.38,34,36,251/- is partly allowed. 2. The Ld. DCIT(Exemptions) is aggrieved and has preferred this appeal. 3. Brief facts of the case show that, assessee is a Public Charitable Trust engaged in providing assistance to the Rural Poor in Self-Help Group Activities. It is registered under section 12AA of the Act. It filed its return of income on 28.09.2018 declaring total income of Rs.NIL after claiming application of funds towards the object of the Trust. The case was selected for scrutiny under CASS and notice under section 143(2) of the Act was issued. The total income of the assessee was assessed by assessment order under section 143(3) of the Act dated 28.01.2021 at a total income of Rs.2,45,99,924/-. 4. During assessment proceedings, the Ld. AO noted that assessee had been doing activity of advancing loans, providing insurance cover, and thus deriving Printed from counselvise.com 3 ITA No.1562/Bang/2024 Navodaya Grama Vikas Charitable Trust 3 profit in the nature of business. Therefore, the Ld. AO held that the assessee is not carrying on any charitable objects and thus he denied the benefit of section 11 of the Act. Further, Ld. AO made several other additions to the total income of the assessee. Assessee preferred appeal before Ld.CIT(A) and he gave partial relied to the assessee. 5. Against this, the Ld. AO is in appeal. In the grounds of appeal, the Ld. AO has worked the total tax effect of Rs.81,74,241/-. However, Ld. Authorized Representative submitted that it is a low tax effect appeal and in fact the tax impact is only Rs.52,02,541/- and therefore the Ld. AO could not have filed this appeal. To support her case, she has stated that the tax determined as per rectification order passed under section 154 of the Act dated 30.03.2022 shows tax liability of Rs.85,19,487/- and tax determined by the Ld. AO as per order giving effect dated 17.09.2024 shows Rs.31,72,733/-. Therefore, Printed from counselvise.com 4 ITA No.1562/Bang/2024 Navodaya Grama Vikas Charitable Trust 4 the relief of tax is only Rs.53,36,754/- which is less than Rs. 60 Lakhs. 6. Ld. Departmental Representative could not dispute the tax working of order under section 154 of the Act as well as the order giving effect order passed on 17.09.2024. This shows that the tax effect involved in this appeal is only Rs.52,02,541/-. Therefore, as per Board Circular 9/2024 dated 17.09.2024 the appeal filed by the Ld. AO cannot be maintainable and hence dismissed. 7. However, if later it is found that there is an error in the computation of tax, the revenue is given the liberty to file proper application with necessary evidence. Accordingly, appeal of the revenue is dismissed. 8. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 30th July 2025. Sd/- (SOUNDARARAJAN K) JUDICIAL MEMBER Sd/- (PRASHANT MAHARISHI) VICE PRESIDENT Bangalore; Dated: 30th July 2025 Giridhar, Sr.PS Printed from counselvise.com 5 ITA No.1562/Bang/2024 Navodaya Grama Vikas Charitable Trust 5 Copy to: 1. The Applicant. 2. The Respondent. 3. The CIT(A) Concerned. 4. The DCIT concerned. 5. The Sr. DR, ITAT, Bangalore. 6. Guard File. Asst.Registrar ITAT, Bangalore Printed from counselvise.com "