Society of Indian Automobile Manufactures Supernnuation Scheme Trust, New Delhi V. DCIT CPC, Banglore

ITA 1871/DEL/2019

AI Insights

The case involves the Society of Indian Automobile Manufactures Superannuation Scheme Trust appealing against the orders of the CIT(A)-40, New Delhi, which upheld the denial of exemption on income by the DCIT, CPC, Bangalore. The primary contention was the incorrect application of the return form ITR-7 instead of ITR-5, leading to the misclassification of the exemption claim under section 11 instead of section 10(25)(iii). The Tribunal found that the trust, being a superannuation trust recognized under the specific rule, was eligible for the claimed exemption and directed the necessary rectification in the assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121258 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 04-03-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Revised return
• Section: 12; 10; 154; 11; 12A; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 1871/Del/2019 : Asstt. Year: 2014-15 ITA No. 1870/Del/2019 : Asstt. Year: 2015-16 Society of Indian Automobile Manufactures Superannuation Scheme Trust, Core-4B, 5 th Floor, India Habitat Centre, Lodhi Road, New Delhi-110003 Vs DCIT, CPC, Bangalore (APPELLANT) (RESPONDENT) PAN No. AACTS0128B Assessee by : Sh. Deepesh Jain, Adv. Revenue by : Sh. Ravi Kant Choudhary, Sr. DR Date of Hearing: 27.06.2023 Date of Pronouncement: 09.08.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals have been filed by assessee against the orders of ld. CIT(A)-40, New Delhi dated 31.12.2018. 2. Since, the issue involved in both the appeals are similar, they were heard together and being adjudicated by a common order. 3. In ITA No. 1870/Del/2019, following grounds have been raised by the assessee: “1. That the Commissioner of Income tax (Appeals) ['CIT(A)'] erred on facts and in law in upholding denial of exemption of Rs.20,39,524 made by DCIT, CPC Bangalore in order passed under section 143(1) of the Income Tax Act, 1961 (the Act). ITA No. 1870 & 1871/Del/2019 Society of Indian Automobile Manufactures Superannuation Scheme Trust 2 1.1 That the CIT(A) erred on facts and in law in upholding denial of exemption on the ground that exemption was allegedly claimed by the appellant under section 11 and in absence of any details of application for charitable purposes, exemption was rightly disallowed under section 143(1)(a) of the Act. 1.2 That the CIT(A) erred on facts and in law in not appreciating that only wrong return form (TTR-7) was erroneously filed by the appellant but the exemption was rightly claimed under section 10(25)(iii) of the Act. 1.3 That on the facts and circumstances of the case, the CIT(A) erred in not appreciating that the contribution received by the appellant trust was exempt under section 10(25)(i) read with Rule 2 of Part B of Fourth Schedule of the Act, as claimed by the appellant. 2. That the CIT(A) erred on facts and in law in not appreciating that the aforesaid adjustment made by the assessing officer/CPC with respect to aforesaid exempt income(s) is without jurisdiction, bad in law and beyond the scope of adjustments specified under section 143(1) of the Act. 3. Without prejudice, that on the facts and circumstances of the case, no income was assessable in the hands of the appellant trust as the appellant is merely a pass-through entity established for holding contribution of employer (Society of Indian Automobile Manufacturers) towards the social security schemes of its employees. 4. That the CIT(A) erred on facts and in law in not deleting interest charged under section 234B/234C of the Act.” 4. Brief facts of the case are that the return of income was filed on 20.02.2015. The assessee is a superannuation trust which is recognized under Rule 2 of Part B of the Fourth Schedule to the Income Tax Act, 1961 vide order dated ITA No. 1870 & 1871/Del/2019 Society of Indian Automobile Manufactures Superannuation Scheme Trust 3 07.06.1999. As per the claim of the assessee, the income is exempt u/s 10(25)(iii) which exempts any income received by the trustees on behalf of and approved superannuation fund. The return of income was filed in ITR-7 and in column pertaining to section under which exemption claimed, Section 11 was mentioned. It was also mentioned in the relevant columns that the institution is registered under section 12A and gross income was shown at Rs. 17,75,437/- and no amount was shown to have been applied for charitable purposes in India either on revenue account or capital account in the relevant columns in the return of income. In column 16 of the return under part B-TI, the amount of gross receipts was shown to be exempt under section 10 under clauses other than the ones mentioned that columns 14 and 15. 5. The CPC processed the return u/s 143(1) and vide intimation dated 02.02.2016, total income was computed at Rs.17,75,437/- which was also the amount of income returned. An application under section 154 was filed with the CPC which was rejected by noting as under: "Pl ea se ref er t o t h e recti fi ca ti on req u est fil ed b y y ou f or t he A ss es sm ent Yea r: 2014- 15 in resp ect of ab ov e m ent i on ed or d er and recei v ed at a C ent rali z ed P ro ces si n g C en t re on 03 /11/ 2016 . On V eri fi cat i on , it i s s een th at t h ere i s n o p rim a fa ci e error in th e or d er whi ch y ou h av e s ou gh t t o b e rec t if i ed. Th eref ore, y ou r app li ca ti on f or Rect i fi ca t i on u nd er Sec . 154 i s rej ect ed , f or th e f oll owin g rea s on s (i f an y) " ITA No. 1870 & 1871/Del/2019 Society of Indian Automobile Manufactures Superannuation Scheme Trust 4 You r rect if i cat i on req u est c ou l d n ot b e c on sid ered at CP C f or t echn i ca l rea s on s. Th e rec tif i cat i on ri gh t s in y ou r c a s e a r e b ein g t ra nsf erred t o y ou r as s ess in g of fi cer. K i n dl y con t a ct y ou r a ss es si n g off ic er fo r t h e s am e.” 6. Aggrieved by the rejection of the rectification request as above, this appeal has been filed before the ld. CIT(A), who rejected the application of the assessee on the grounds that the assessee had submitted that its income is exempt u/s 10(25)(iii) but the said exemption has not been claimed and exemption has been claimed u/s 11 and information given in the columns pertaining to income from other sources and voluntary contributions. As noted above processing u/s 143(1)(a) is done on the basis of information available in the return of income and adjustments have to be made in the said processing on account of incorrect claim, if such incorrect claim is apparent from any information in the return. Since income in the case of a trust which is claiming exemption u/s 11 has to be computed in accordance with the various provisions of Sections 11, 12 and 13, 85% of the receipts have to be applied for charitable purposes which has not been done in the case under consideration since no amount has been claimed as applied for charitable and religious purposes in the relevant columns in the return of income. 7. We find that the CPC processed the return solely and truly by the details filed by the assessee themselves. However, before the ld. CIT(A), it was submitted that instead of Form ITR-5, the Form ITR-7 was used. 8. The fact that the assessee is not a charitable trust but a superannuation trust recognized under Rule 2 of Part-B of the ITA No. 1870 & 1871/Del/2019 Society of Indian Automobile Manufactures Superannuation Scheme Trust 5 fourth schedule of the Income Tax eligible to claim exemption u/s 10(25)(iii) is not in dispute. We have also gone through the copy of the trust deed dated 07.06.1999 and also the copy of the order dated 21.09.1999 of the DIT(E), New Delhi according the approval to the superannuation scheme. The revised return has been filed within the due date allowed. Hence, we direct the Jurisdictional Assessing Officer (JAO) to accord the benefit due for the assessee by passing the rectification order u/s 154. 9. In the result, both the appeals of the assessee are allowed for statistical purpose. Order Pronounced in the Open Court on 09/08/2023. Sd/- Sd/- (C. M. Garg) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 09/08/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR