The Nagar Vachanalaya Vita, Sangli V. Income Tax Exemption, Ward- Kolhapur, Kolhapur

ITA 999/PUN/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5591 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 01-11-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 12-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA Nos.999 & 1000/PUN/2023 नधा रण वष / Assessment Years : 2016-17 & 2017-18 The Nagar Vachanalaya Vita, Choundeshwari Chowk, Vita Lengare Road, Khanapur, Sangli – 415 311 Maharashtra Vs. ITO, Exemption Ward, Kolhapur Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: These two appeals by the assessee arise out of the separate orders, both dated 10-08-2023, passed by the ld. CIT(A) in National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment years 2016-17 & 2017-18. Since both the appeals are based on identical facts and common grounds of appeal, I am, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. Assessee by Smt. Deepa Khare Revenue by Shri Arvind Desai Date of hearing 06-11-2023 Date of pronouncement 06-11-2023 ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita 2 2. At the outset, it is relevant to mention that the additional ground raised by the ld. AR was not pressed at the time of hearing. The same is, therefore, dismissed as ‘not pressed’. 3. The only issue raised through the solitary effective ground is the disallowance of expenses incurred for charitable purposes after the denial of exemption. 4. Briefly stated, the facts of the case, are that the assessee is a Public Charitable Trust providing Books, Magazines, Newspaper etc. to the public at large. For the A.Y. 2016-17, the assessee received a grant from the State Government and incurred expenses which were not allowed by the Centralized Processing Centre (CPC), Bengaluru at the time of processing the return u/s.143(1) of the Act. The assessee contended before the ld. CIT(A) that deduction be allowed towards expenses incurred, if exemption was not to be allowed. The ld. CIT(A) opined that registration u/s.12A was a pre-requisite for claiming exemption u/s.11 & 12. Since the assessee was not registered in terms of section 12A, the ld. CIT(A) denied the benefit of exemption, without expressing any specific opinion on the deductibility of expenses. 5. I have heard the rival submissions and perused the relevant material on record. It is an undisputed fact that the assessee was not ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita 3 granted exemption u/s.11. The ld. AR was fair enough not to press for the grant of benefit of exemption u/s.11. The limited relief contended before the ld. CIT(A) as well as the Tribunal is that the income should be charged to tax and not the gross receipts. The ld. AR furnished details of certain expenses and requested for the granting of necessary relief. There can be no dispute on the fact that the tax is charged on income and income is deduced by reducing the deductible expenses/allowances from the revenue receipts. If exemption u/s.11 is allowed, then the excess of receipts over expenses gets exempted subject to the stipulated ceilings. In case the exemption is denied, then it is only the excess of receipts over eligible and deductible expenses/allowances that can be charged to tax. In the facts and circumstance of the case, the AO charged to tax the gross receipts without granting any deduction towards expenses and deductions. I, therefore, set-aside the impugned order and remit the matter to the file of AO for deducing the total income in accordance with law after considering the deductibility of various expenses noted in the Income and Expenditure account on the touchstone of the relevant provisions. Needless to say, the assessee will be allowed reasonable opportunity of hearing. ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita 4 6. Both the sides are in agreement that the facts and circumstances in the appeal for A.Y. 2017-18 are mutatis mutandis similar. Following the view taken hereinabove for the A.Y. 2016-17, the impugned order for the A.Y. 2017-18 is also set-aside and the matter is remitted to the file of the AO for deciding the issue in conformity with the directions given above. 7. In the result, both the appeals are partly allowed for statistical purposes. Order pronounced in the Open Court on 06 th November, 2023. Sd/- (R.S.SYAL) VICE PRESIDENT प ु णे Pune; दनांक Dated : 06 th November, 2023 Satish आदेश क त ल प अ े षत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The Pr.CIT concerned 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, SMC, Pune / DR, ITAT, Pune 5. गाड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita 5 Date 1. Draft dictated on 06-11-2023 Sr.PS 2. Draft placed before author 06-11-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *