Shree Vasupujya Swami Gruh Chaitya Samiti, Vadodara V. Income Tax Officer, Ward-Exemption, Vadodara

ITA 131/AHD/2023

AI Insights

The case involves Shree Vasupujya Swami Gruh Chaitya Samiti, a public trust, which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The primary contention was the denial of exemptions under Sections 11 and 12 of the Income Tax Act, 1961, for the assessment year 2011-12. The trust, not being registered under Section 12AA at the time of the relevant assessment year, faced additions to its income which it contested. The Tribunal considered precedents and the specific circumstances of the trust's registration under Section 12AA, which occurred after the assessment year in question but before the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299918 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 02-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2023
• Other Referred Cases: St. Jude's Convent School vs. ACIT, CIT vs. Mayur Foundation, Association of Indian Panelboard Manufacturer vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 154; 2; 11; 12AA; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o . 1 3 1/ A h d /2 0 2 3 ( A s se ss m e nt Y e a r : 20 11- 12 ) Sh r e e V as up uj ya S w a m i Gr u h C h ait ya S a mit i, F- 13, M eh ul J ai n S oci e t y- 2, O pp . Su b h an pur a B u s St an d , V a d o da r a V s . I .T .O . War d (E x e m p ti on ) , B ar od a [ P AN N o. A A AI TS 4 99 9 L ] (Appellant) .. (Respondent) Appellant by : Shri Tej Shah, A.R. Respondent by : Shri Ramesh Kumar, Sr. D.R. D a t e of H ea r i ng 05.07.2023 D a t e of P r o no u n ce me nt 07.07.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 10.01.2023 for A.Y. 2011-12. 2. The grounds of appeal raised by the assessee are as under: “1. The NFAC erred in law and in the facts of the case in confirming the order of the AO in denying exemption u/s 11 and 12 of the act. 2. The NFAC erred in law and in the facts of the case in confirming the action of the AO in allowing prima facie adjustments u/s 143(1)(a) of the act. 3. The NFAC erred in law and in the facts of the case in confirming the action of the AO in not allowing rectification of its order u/s 154 of the act.” 3. The assessee is a public trust registered under the Bombay Public Trust Act, 1950. At the time of assessment proceedings the trust was not registered under Section 12AA of the Act. The assessee filed return of income for A.Y. 2011-12 on 30.03.2013 declaring total income of Rs. ITA No. 131/Ahd/2023 Shree Vasupujya Swami Gruh Chaitya Samiti vs. ITO Asst.Year–2011-12 - 2 - 54,620/-. On the basis of information available with the Revenue department, the assessee case was reopened by issuing notice under Section 148 of the Act on 28.03.2018 which was duly served upon the assessee. The Assessing Officer treated the status of the assessee as AOP as the trust is a religious trust and is maintaining a Jain Derasar. During the year under consideration, the assessee has shown gross receipts of Rs. 15,84,389/- and income applied of Rs. 15,29,767/- towards objects of the trust. During the course of assessment proceedings the Assessing Officer observed that assessee is not registered under Section 12AA of the Act. The assessee submitted before the Assessing Officer that assessee received total donation of Rs. 19,33,032/- during the year out of that Rs. 11,61,109/- was for regular donation and balance amount of Rs. 7,71,923/- is for corpus donation. On further verification of Profit & Loss Account and computation of income the Assessing Officer observed that the regular donation of Rs. 11,61,109/- is added to the income and Rs. 7,71,923/- is not added to the income considering it as exempt under Section 11(1)(d) of the Act. As the assessee was not registered under Section 12AA of the Act the Assessing Officer held that the assessee is not entitled for getting benefits under Section 11 & 12 of the Act. Thus, the Assessing Officer made addition of Rs. 7,71,923/- in respect of said corpus donation amounting to Rs. 7,71,923/-. The Assessing Officer also made addition on account of expenses of Rs. 4,83,875/- for non-registration under Section 12AA. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. ITA No. 131/Ahd/2023 Shree Vasupujya Swami Gruh Chaitya Samiti vs. ITO Asst.Year–2011-12 - 3 - 5. The Ld. A.R. submitted that in assessee’s own case for A.Y. 2010-11 and 2012-13 the Tribunal has held that the proceedings pertaining to A.Y. 2010-11 were pending at the time of registration under Section 12AA of the Act. Therefore, the benefit of exemption under Section 11 of the Act will be extended to the assessee in light of the decision of the Tribunal in case of St. Jude’s Convent School vs. ACIT (77 taxmann.com 173) and as well as the decision of Gujarat High Court in case of CIT vs. Mayur Foundation 274 ITR 562. The Ld. A.R. also relied upon the decision Hon’ble Gujarat High Court in case of Association of Indian Panelboard Manufacturer vs. DCIT (R/Tax Appeal No. 655 of 2022 order dated 21.03.2023). 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). The Ld. D.R. further submitted that since the assessee was not registered under Section 12AA of the Act the CIT(A) has rightly confirmed the denial of exemption under Section 11 & 12 of the Act. 7. Heard both the parties and perused all the relevant material available on record. At the time of hearing the Ld. A.R. submitted the application for registration under Section 12AA in the format of Form No. 10A dated 21.09.2021 and submitted that the registration was granted on 23.09.2021. After going through the order of the Tribunal in assessee’s own case for A.Y. 2010-11 and 2012-13 it will be appropriate to follow the same guideline as the Hon’ble Gujarat High Court in case of Mayur Foundation (Supra) as well as in case of Association of Indian Panelboard Manufacturer (Supra) has categorically mentioned that even though From 10B was filed at a later stage was part of the Assessing Officer in course of the proceedings of the return of income. The Assessing Officer deny the exemption claimed ITA No. 131/Ahd/2023 Shree Vasupujya Swami Gruh Chaitya Samiti vs. ITO Asst.Year–2011-12 - 4 - by the assessee under Section 11(1) and 11(2) on the ground that the audit report was not filed. However, such benefit provided under Section 11 has to be taken into account after verifying the aspects related to exemption under Section 11 of the Act. Therefore, the Assessing Officer is directed to verify the same and if entitle in the light of the decision of Hon’ble Gujarat High Court exemption under Section 11 of the Act then adjudicate the same as per the income tax statutes. Needless to say, the assessee be given opportunity of hearing by following principle of natural justice. Hence, the appeal of the assessee is partly allowed for statistical purpose. 8. In result, the appeal of the assessee is partly allowed for statistical purpose. This Order pronounced in Open Court on 07/07/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 07/07/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad