G.RAMASWAMY NAIDY MATRIC HR. SEC. SCHOOL,COIMBATORE V. ACIT, EXEMPTIONS, COIMBATORE

ITA 2626/CHNY/2024

AI Insights

The case involves G. Ramaswamy Naidu Matriculation Higher Secondary School, a trust running a school, which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the assessment made by the Assessing Officer. The dispute centered on the incorrect reporting of a claim for accumulation under Section 11(1) instead of Section 11(2) of the Income Tax Act, 1961, leading to the denial of an exemption of Rs. 93,44,279. The Tribunal considered the bona fide nature of the error and the compliance with all other conditions under Section 11(2), deciding to remand the matter for correct assessment under the appropriate section.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29300 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Other Referred Cases: Goetze (India) Ltd. V. CIT, Jai Parabolic Springs Ltd. vs. CIT, National Thermal Power Company Ltd. vs. CIT, Jute Corporation of India Ltd. vs. CIT, M/s. Abhinitha Foundation Pvt Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PUSHPA HEMACHAND
• Assessee Lawyers: N. ARJUN RAJ; S. GIRISH
• Keywords: Revised return
• Section: 142(1); 143(1); 11; 12AA

Judgement Text

" आयकर अपीलीय अिधकरण ‘बी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ एवं माननीय ŵी जगदीश, लेखा सद˟ क े समƗ। BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपील सं./ ITA No.2626/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2018-2019) G. Ramaswamy Naidu Matric. Hr. Sec. School, Secondary School Campus, Avanashi Road, Civil Aerodrome P.O. Race Course, Coimbatore 641 018. [PAN: AABTG 4164C] Vs. The Assistant Commissioner of Income Tax, Exemptions, Coimbatore. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri N. Arjun Raj and S. Girish Kumar, Advocates Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. Pushpa Hemachand, JCIT. सुनवाई कȧ तारȣख/Date of Hearing : 23.01.2025 घोषणा कȧ तारȣख /Date of Pronouncement : 31.01.2025 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member) This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2024-25/1068604684(1) dated 12.09.20243. The assessment was framed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income-tax Officer, National e-Assessment Centre, Delhi u/s.143(3) r.w.s. 143(3A) 2 ITA No.2626/Chny/2024 & 143(3B) of the Income Tax Act, 1961 (hereinafter the ‘Act’) for the assessment year 2018-19 vide order dated 22.03.2021. 2. Brief facts of the case are that the assessee Trust is running a Matriculation School by the name G. RAMASWAMY NAIDU MATRICULATION HIGHER SECONDARY SCHOOL. The main activity of the Trust is imparting education to the society. After considering the submission of the assessee, no addition is made on the issue under scrutiny. The assessee Trust is registered u/s 12AA of the Income Tax Act, 1961 (in short ‘’the Act’’). During the course of assessment proceedings, notice u/s 142(1) of the Act were issued to the assessee on 16.11.2020 and 08.02.2021 calling for certain details including explanation for non-filing of option Form 9A for claiming exemption of Rs. 93,44,279/- in the Income Tax return as 'Amount deemed to have been applied’ during the previous year as per clause (2) of Explanation to section 11(1). In response, the assessee vide its letter submitted on 12.02.2021 stated that the said exemption of Rs. 93,44,279/- has been claimed wrongly and inadvertently and Section 11 (1) was erroneously mentioned in the Return instead of correct Section 11 (2) and therefore, the Trust has not submitted the Form No. 9A. The ld. Assessing Officer considered the submission of the assessee but not accepted the reason firstly on the ground that, the assessee has himself claimed the said exemption u/s 11(1) of the Act in the return of income and has specifically stated that Form 9A has not been filed. Secondly, the assessee has been given opportunity by the CPC within due time which could have been used by the assessee for revising its return of income. Rather, the assessee in its reply filed before the CPC did not furnish the same reply as has been given to the office of the 3 ITA No.2626/Chny/2024 ld. Assessing Officer wherein it has claimed that the exemption has been inadvertently claimed u/s 11(1) of the act instead of 11(2). Rather, the assessee stated therein that it has e-filed Form 9A and the return should be accepted. The ld. Assessing Officer placing reliance on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. V. CIT (2006) 284 ITR 323 (SC) wherein it has been held that it is necessary for an assessee to revise its return of income for raising any new claim which is not raised in the original return of income and that the Assessing Officer does not have the power to entertain a fresh claim raised before him by the assessee otherwise than by filing a revised return of income. In the light of the above, the ld. Assessing Officer accepted the total income of Rs. 93,44,279 as determined by the CPC vide intimation order dated 31.01.2020 u/s 143(1) of the Act. Aggrieved, assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) confirmed the action of the ld. Assessing Officer. Aggrieved, assessee is in appeal before us. 3. Before us, the ld. Authorised Representative contended that the assessee had duly filed Form No. 10 in accordance with section 11(2) of the Act along with the return of income for claiming accumulation in terms of section 11(2) of the Act. The lower authorities only reason for such denial is on account of the wrong reporting in the return of income u/s 11(1) which requires the taxpayer to file Form No. 9A. The ld. Authorised Representative further contended that it was inadvertent error in incorporating the claim for accumulation in Row No. 4(v) u/s 11(1) of the Act instead of Row No. 4(vii) u/s 11(2) of the Act would not tantamount to fresh claim thereby negating the relevant findings of the lower authorities. The Authorized 4 ITA No.2626/Chny/2024 Representative further pleaded that the ld.CIT(A) was empowered to entertain such claim especially in view of the fact that all other conditions specified under the Act has been fully complied with by the Assessing Officer for claim of accumulation to the tune of Rs. Rs.93,44,279/- in terms of Section 11(2) of the Act, hence he requested to condone the mistake of filing the said sum in the wrong Row in the return of Income and thus render justice. 4. Per contra, the ld. Departmental Representative strongly supported the orders of the authorities below. 5. We heard the rival contention and perused the material on record. We note that the inadvertent error has been happened bona fide in incorporating the claim for accumulation in Row No. 4(v) u/s 11(1) of the Act instead of Row No. 4(vii) u/s 11(2) of the Act. All particulars are duly provided in the Return and nothing has been concealed. Technical or Venial breach/mistake cannot take away the substantive rights of the assessee. 6. The Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. [2008] 172 Taxman 258 (Delhi), having considered judgment in National Thermal Power Company Ltd. (292 ITR 383 SC) and Goetze (India) Ltd. (supra) has held that there is no restrictions in the powers of Appellate Authorities to entertain an additional ground. Hon'ble Delhi High Court has referred to judgment of Hon'ble Supreme Court in Jute Corporation of India Ltd. vs. CIT (1991) 187 ITR 688 wherein Hon'ble Supreme Court while dealing with the powers of Appellate Assistant Commissioner had observed : 5 ITA No.2626/Chny/2024 \"...An appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons, The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.\" 7. The Hon'ble Madras High Court summed up this issue in the case of M/s. Abhinitha Foundation Pvt Ltd. 249 Taxman p 37 at para 18 which read as under: \"In sum, what emerges from a perusal of the ratio of the judgments cited above, in particular, the judgments rendered by the Supreme Court in GOETZE's case and National Thermal Power Co. Ltd.'s case, and those, rendered by the Division Bench of this Court in Ramco Cements Ltd. and CIT vs Malind Laboratories P. Ltd., as also the judgments of the Delhi High Court in Sam Global Securities Ltd. 's case and Jai Parabolic Springs Ltd.'s case, that, even if, the claim made by the assessee company does not form part of the original return or even the revised return, it could still be considered, if, the relevant material was available on record, either by the appellate authorities, (which includes both the CIT (A) and the Tribunal) by themselves, or on remand, by the Assessing Officer.\" 8. Therefore, in the light of the above judgments of the Hon’ble High Courts, we find that the assessee by bona fide mistake chosen the wrong section while incorporating the claim for accumulation although assessee has filed all relevant 6 ITA No.2626/Chny/2024 particulars on record, hence we remand the matter back to the file of AO to treat the claim of the assessee as filed in Row No.4(vii) u/s 11(2) of the Act and consider the claim for accumulation u/s 11(2) of the Act. Accordingly, we do so. 9. In result, the appeal of the assessee is allowed for the statistical purposes. Order pronounced in the open court on 31st day of January, 2025 at Chennai. Sd/- Sd/- (जगदीश) (JAGADISH) लेखा सद˟ / ACCOUNTANT MEMBER (मनु क ुमार िगįर) (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 31-01-2025 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai/Coimbatore/Madurai/Salem. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "