DANAHER INDIA CSR FOUNDATION, MUMBAI V. ITO-14(1)(1), MUMBAI

ITA 1984/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5675 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-07-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 16-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund; Revised return
• Section: 11; 80G; 12AA; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.1984/MUM/2024 Assessment Year: 2022-23 Danaher India CSR Foundation, 3 rd floor, B Wing, Art Guild House, Phoenix Market City Compound, LBS Marg, Kurla (West), Mumbai – 400070 (PAN : AAGCD7976H) Vs. Income Tax Officer – 14(1)(1), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Vijay Mehta, CA Revenue : Smt. Mahita Nair, Sr. DR Date of Hearing : 10.07.2024 Date of Pronouncement : 23.07.2024 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), Bengaluru vide order no. ITBA/APL/S/250/2023-24/1061184670(1), dated 20.02.2024 passed against the Intimation order by Assistant Director of Income Tax, Centralised Processing Centre, Bengaluru (CPC), u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 28.07.2023 for Assessment Year 2022-23. 2. The sole contention of the assessee is in respect of addition of Rs.5,36,25,783/- by CPC without appreciating the fact of erroneous reporting by the assessee in the return filed by it. Further, assessee contends that ld. CIT(A) ought to have allowed the claim even if not 2 ITA No.1984/MUM/2024 Danaher India CSR Foundation, AY 2022-23 made in the original or revised return of income, it being first appellate authority. 3. Brief facts of the case are that assessee is a non profit making company within the meaning of section 8 of the Companies Act, 2013, for the purpose of undertaking corporate social responsibility initiatives. Registration u/s. 12AA of the Act was granted to the assessee on 25.04.2019 effective from Assessment Year 2019-20 and u/s. 80G on 17.02.2021 effective from Assessment Year 2021-22. Assessee filed its return of income on 25.10.2022 claiming exemption u/s.11 reporting total income at Rs.5,36,25,783/-. According to the assessee, reporting of this income in the return form was made erroneously, without filling in the fields in the return form correctly. Return of the assessee was processed u/s.143(1) vide intimation dated 28.07.2023 whereby the total income was assessed at Rs.5,36,25,783/- against which the assessee is in appeal before the Tribunal. 3.1. Prior to this, Ld. CIT(A) dismissed the appeal of the assessee by observing that assessee could have filed the revised return of income if there were any discrepancy in the original return of income. Assessee failed to do so and therefore its contention that the return was filed wrongly and the schedule ER of the return was filled in erroneously, was not accepted. 4. We have heard both the parties and perused the material available on record including the paper book in two volumes containing 103 pages. 5. Before we delve on the issue, certain facts are worth taking note of. During the year, assessee received voluntary contributions 3 ITA No.1984/MUM/2024 Danaher India CSR Foundation, AY 2022-23 aggregating to Rs.5,36,25,783/-, details of the which is tabulated as under: 5.1. According to the assessee, it applied Rs.9,23,48,664/- towards charitable purposes, duly accounted for and reported in its audited financial statements. Out of this amount, Rs.3,15,39,664/- pertained to Assessment Year 2021-22 which was applied in the year under consideration and the balance of Rs.6,08,09,040/- was applied during the year along with administrative and other expenses amounting to Rs.10,79,417/-. Assessee prepared its computation of income, details of which is tabulated below: 6. Before us, ld. Counsel for the assessee pointed out the errors which were committed in uploading the Income tax return form, listed as under: “(i) Reported amount of Rs. 5,25,46,366/- instead of Rs. 9,23,48,664/- in Schedule ER under 'Row B- Application towards objects of the trust/institution' through "donations to trust/institution registered u/s 12AAI 12AB or approved u/s 10(23C)(iv)/ (v)l (vi)/ (via) Other than Corpus" in the ITR. 4 ITA No.1984/MUM/2024 Danaher India CSR Foundation, AY 2022-23 (ii) Non-reporting of the amount of Rs. 3,15,39,624/- under "Income deemed to be applied in any preceding year under clause (2) of Explanation 1 of section 11 (1) (applicable only when exemption is claimed u/s 11 and 12)" in Schedule ER under 'Row E-Source of fund to meet revenue application' of the ITR. (iii) Erroneously reported the amount of Rs. 5,36,25,783 in Schedule ER under 'Row E-Source of fund to meet revenue application - Any other' of the ITR. 6.1. Thus, the erroneous reporting made in Schedule ER of ITR vis-a- vis the correct reporting which should have been done in Schedule ER of ITR for AY 2022-23 is tabulated below: 7. On the above stated set of facts, ld. Counsel for the assessee asserted that owing to the application of the entire contribution received during the year for charitable purposes, there would not arise any taxable income since assessee had deficiency of Rs.82,62,674/-. Thus, the total income of the assessee ought to have been reported at Nil instead of Rs.5,36,35,783/- with no tax due thereon. 7.1. Ld. Counsel for the assessee has taken us through the return form filed by the assessee which is placed in the paper book and has reconciled the same with the audited financial statements to corroborate the errors which were committed in filing the return form. 5 ITA No.1984/MUM/2024 Danaher India CSR Foundation, AY 2022-23 From the verification of the records and material before us, as referred by the ld. Counsel, it is evident that mistake had indeed occurred in filing the return form. In the present context, what is material before us is that there is a mistake which is clear, glaring and incapable of two views being taken thereon. It is important that income liable to be taxed has to be worked out in accordance with the law as in force. 7.2. In our considered view, right tax has to be collected from the right person even though the return has been processed by the CPC based on the information furnished by the assessee in its return form which is incorrect in filling the relevant columns. According to us, legitimate claim of the assessee should be allowed while determining the taxable income. In this regard, we take note of the observations of the Hon'ble Supreme Court in the case of Goetze (India) Ltd vs. CIT [2006] 284 ITR 323 (SC), whereby it was held that “nothing impinges on the power of the appellate authorities to entertain such a claim of the assessee”. 7.3. For our considered finding, we draw force from the decision of Hon'ble High Court of Gujarat in case of R. Koshti vs. CIT [276] ITR 165, wherein it was held that regardless of whether the revised return was filed or not, once an assessee is in a position to show that it has been over assessed under the Act either as a result of its own mistake or otherwise, the authorities under the Act are under an obligation to act in accordance with law. The relevant extract from the said decision is reproduced as under: “18. "The position is, therefore, that, regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over-assessed under the provisions of the Act, regardless of whether the over- assessment is as are sult of assessee's own mistake or otherwise, the CIT has the power to correct such an assessment under section 264(1) of the Act. If the CIT refuses to give relief to the assessee, in such circumstances, he would be acting dehors the powers under the Act and the provisions of the Act and, therefore is duty-bound to give relief to an assessee, where due, in accordance with the provisions of the Act. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 6 ITA No.1984/MUM/2024 Danaher India CSR Foundation, AY 2022-23 20. A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. This Court, in an unreported decision in case of Vinay Chandulal Satia v. N.O. Parekh, CIT [Spl. Civil Application No. 622 of 1981 dated 20-8-1981), has laid down the approach that the authorities must adopt in such matters in the following terms: "The Supreme Court has observed in numerous decisions, including Ramlal v. Rewa Coal fields Ltd. AIR 1962 SC 361, State of West Bengal v. Administrator, Howrah Municipality AIR 1972 SC 749 and Babutmal Raichand Oswal v. Laxmibai R. Tarte AIR 1975 SC 1297, that the State authorities should not raise technical pleas if the citizen shave a lawful right and the lawful right is being denied to them merely on technical grounds. The State authorities cannot adopt the attitude which private litigants might adopt.” 8. Accordingly, the matter is remanded back to the file of Jurisdiction Assessing Officer (JAO) to consider the correct computation of income as claimed by the assessee as well as to rectify the mistake committed by the assessee in filing its return of income. Grounds taken by the assessee are thus allowed. 9. In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 23 July, 2024 Sd/- Sd/- (Satbeer Singh Godara) (Girish Agrawal) Judicial Member Accountant Member Dated: 23 July, 2024 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai