JD CHARITABLE TRUST,SALEM V. ITO, EXEMPTIONS WARD, SALEM

ITA 414/CHNY/2025

AI Insights

The case involves JD Charitable Trust appealing against the order of the Commissioner of Income Tax (Appeals), which confirmed the Assessing Officer's decision treating a surplus of \\u20b936,78,099 as business income. The surplus was allegedly used for the construction of a school building, a claim that was not substantiated during the assessment and first appellate proceedings. The Tribunal, considering the circumstances and the affidavit of undertaking by the CEO of the Trust, decided to remand the matter back to the Assessing Officer, subject to the payment of costs by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315978 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPTHA
• Assessee Lawyers: S. BHUPENDRAN; VIRTUAL
• Keywords: Business income; Charitable institution
• Section: 148; 144; 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर. रगुनाथॎ, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.414/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2013-14 JD Charitable Trust, 2/315, Bharathi Nagar, Vellakkal Patti, Chettichavadi Post, Salem 636 012. [PAN:AAATC4409R] Vs. The Income Tax Officer, Exemptions Ward, Salem. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Bhupendran, Advocate (virtual) ŮȑथŎ की ओर से/Respondent by : Ms. Deeptha, Addl. CIT सुनवाई की तारीख/ Date of hearing : 01.05.2025 घोषणा की तारीख /Date of Pronouncement : 14.05.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 09.12.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2013-14. 2. The ld. AR Shri S. Bhupendran, Advocate request to take up ground No. 4 raised by the assessee in challenging the action of the ld. CIT(A) in rejecting the claim made under section 10(23C) of the I.T.A. No.414/Chny/25 2 Income Tax Act, 1961 [“Act” in short]. The ld. AR submits that the ld. CIT(A) confirmed the view of the Assessing Officer in disallowing ₹.36,78,099/- treating the same as business income. He submits that the assessee could not furnish the details of surplus used for construction of school building during the course of assessment proceedings as well as first appellate proceedings. He prayed to remand the matter to the file of the Assessing Officer for fresh consideration as the assessee is ready to prosecute its case before the Assessing Officer and to that effect, the ld. AR filed an affidavit of undertaking by the Chief Executive Officer of the assessee. 3. The ld. DR Ms. Deeptha, Addl. CIT vehemently opposed in remanding the matter to the file of the Assessing Officer. She argued that ample opportunities were given to the assessee by the Assessing Officer as well as the ld. CIT(A), but nothing was brought on record to show the surplus has been utilized for construction of school building. Further, she drew our attention to the assessment year under consideration, being old, if this Tribunal grants an opportunity of remand that should be on a condition that the assessee shall pay cost of ₹.1,00,000/-. She prayed to dismiss the ground raised by the assessee. I.T.A. No.414/Chny/25 3 4. Heard both the parties and perused the material available on record. Admittedly, there was no return of income filed by the assessee for the year under consideration. The Assessing Officer, on an information having found cash deposits, requested the assessee to file return of income by way of notice under section 148 of the Act. The assessee did not prefer to file the return of income even after issue of notice under section 142(1) of the Act. A show-cause notice under section 144 of the Act was issued why the cash deposit should not be treated as undisclosed income, in response to which, the assessee filed return of income declaring total income of the assessee at NIL. The Assessing Officer, for not disclosing the amount of ₹.36,78,099/- in the return of income as income, treated the same as business income. Before us, the ld. AR vehemently contended that the said amount was utilized for the purpose of construction of school building, but, however, nothing was brought on record by the assessee. The ld. AR conceded that there was no material as on today to show that the assessee has utilized for school building, but, however, a notarized affidavit filed before us deposed by Rathinam Shanthimuthusamy, the Chief Executive Officer of the assessee with an undertaking that the I.T.A. No.414/Chny/25 4 assessee would participate before the Assessing Officer without fail, the content of which is reproduced herein below: AFFIDAVIT OF UNDERTAKING I, Rathinam Shanthimuthusamy, the Chief Executive Officer of JD Charitable Trust, the Appellant in the aforementioned appeal before the Income Tax Appellate Tribunal, Chennai, pursuant to the oral directions of the Hon’ble Bench given on 01/05/2025, submit as under: That pursuant to setting aside of the case to the file of the concerned Assessing Officer, I undertake on behalf of the Appellant Trust to participate in the income tax proceedings and comply with the notices issued by the Assessing Officer from time to time and furnish all the particulars and details called for. 5. On perusal of the above and with the submissions of the ld. AR, the facts remain admitted that there was no material evidence showing the surplus stated to have been utilized for construction of school building before the Assessing Officer and the ld. CIT(A), including this Tribunal. Therefore, considering the submissions of the ld. DR as well as the ld. AR, we deem it proper to remand the matter to the file of the Assessing Officer subject to the condition of payment of ₹.50,000/- in favour of the State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the Assessing Officer shall satisfy the payment of cost and decide the issue afresh after considering the written submissions/documentary evidences as I.T.A. No.414/Chny/25 5 may be filed by the assessee to substantiate its claim. Thus, the grounds raised by the assessee are allowed for statistical purposes. 6. In view of our decision in ground No. 4, the issues raised in ground No. 1 to 3 become academic requiring no adjudication. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 14th May, 2025 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 14.05.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "