NANDLAL SHARMA CHARITABLE TRUST, Kolkata V. ITO(Exemption), Kolkata

ITA 356/KOL/2023

AI Insights

The appeals by Nandlal Sharma Charitable Trust challenged the decisions of the National Faceless Appeal Centre, which had denied the trust the deduction of amounts applied for charitable purposes during the years 2018-19 and 2019-20. The primary contention was the non-eligibility for exemption under Section 11 of the Income Tax Act due to late filing of the return in 2018-19 and the procedural denial in 2019-20. The Tribunal examined the circumstances of the late filing and the application of funds, ultimately deciding in favor of the trust by allowing the set off of expenditures against gross receipts for both assessment years.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132655 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-08-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 11-04-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KR. AGARWALA
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Charitable institution
• Section: 11; 12A; 143(1); 250; 139(1)

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI SANJAY GARG, HON’BLE JUDICIAL MEMBER & DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 356/Kol/2023 Assessment Year: 2018-19 & I.T.A. No. 357/Kol/2023 Assessment Year: 2019-20 Nandlal Sharma Charitable Trust 8, Lyons Range Kolkata - 700001 [PAN: AAATN3848D] Vs Income-tax Officer, Ward-1(1), Exemption, Kolkata अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : Shri Miraj D. Shah, A/R Revenue by : Shri Sunil Kr. Agarwala, CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 10/08/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 06/09/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The above captioned appeals are directed against the order of the National Faceless Appeal Centre, Delhi (hereinafter ‘the ld. CIT(A)’), Kolkata, passed u/s 250 of the Income-tax Act, 1961 (hereinafter ‘the Act’), dt. 29/04/2022, for the Assessment Year 2018- 19 and Assessment Year 2019-20; respectively. 2. We first take up ITA No. 356/Kol/2023 for adjudication. 3. Though the assessee has raised various grounds of appeal but the sole grievance of the assessee is that the CPC erred in not giving the deduction of the amount applied during the year at Rs.5,94,448/-. 4. We have heard rival contentions and perused the material available on record. We notice that the assessee is a charitable trust. Due date of filing the return for Assessment Year 2018-19 is I.T.A. No. 356/Kol/2023 Assessment Year: 2018-19 & I.T.A. No. 357/Kol/2023 Assessment Year: 2019-20 Nandlal Sharma Charitable Trust 2 30/09/2018. Assessing filed the return of income on 30/10/2018 and the same was delayed. This fact is not disputed. During the year the gross receipts of the assessee were Rs.6,05,000/- and Rs.5,94,448/-, was applied for charitable purposes. Since the assessee did not file the return of income before the due date, assessee was not eligible for exemption u/s 11 of the Act. The CPC in its intimation dated 21/05/2019, denied the same and made the addition of Rs.5,94,448/-. The plea of the ld. Counsel for the assessee is that even if the assessee is not considered as a charitable trust for the purpose of completing the assessment for the year under appeal, the expenditure claimed during the year ought to have been allowed against the gross receipts. 5. We find merit in the contention of the assessee and as has been held consistently by various Hon’ble Courts, that even in case benefit of Section 11, is not granted to the assessee and it is not deemed to be registered under section 12A of the Act, even then for that particular year the expenditure incurred during the year should be allowed to be set off against the gross receipts. We, therefore, are inclined to hold that the assessee deserves set off of Rs.5,94,448/-being the expenditure incurred during the year and the same is well supported by the audit report filed for the year. Thus, appeal of the assessee for Assessment Year 2018-19 is allowed as per the terms indicated hereinabove. 6. Now we take up ITA No. 357/Kol/2023, wherein also similar issue has raised and against the gross receipts of Rs.2,42,500/-, assessee has incurred expenditure of Rs.2,40,920/-towards charitable purposes and the same has not been allowed to the assessee on the I.T.A. No. 356/Kol/2023 Assessment Year: 2018-19 & I.T.A. No. 357/Kol/2023 Assessment Year: 2019-20 Nandlal Sharma Charitable Trust 3 ground that return of income has been filed beyond the due date of filing of return. We, however, after considering the submissions of the ld. Counsel for the assessee notice that in the intimation u/s 143(1) of the Act for Assessment Year 2019-20, the system itself indicates that the date for filing of original return of income was extended to 31/10/2019. Further we find that the assessee filed return of income on 30/10/2019, which was well before the due date. Therefore, the ground on which the CPC has denied the benefit of application of fund to the assessee is in itself invalid. Therefore, since the assessee has filed return of income before the due date provided u/s 139(1) of the Act, the assessee is eligible to claim benefit of Section 11 of the Act being a registered trust u/s 12A of the Act. Thus, the impugned addition is deleted and the grounds of appeal raised by the assessee are allowed. 7. In the result, both these appeals of the assessee are allowed. Order pronounced in the Court on 6 th September, 2023 at Kolkata. Sd/- Sd/- (SANJAY GARG) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 06/09/2023 *SC SrPs I.T.A. No. 356/Kol/2023 Assessment Year: 2018-19 & I.T.A. No. 357/Kol/2023 Assessment Year: 2019-20 Nandlal Sharma Charitable Trust 4 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata