L.G KAKADIA EDUCATION& CHARITABLE TRUST ,MUMBAI V. ITO EXEMPTION WARD 4, MUMBAI

ITA 1914/MUM/2025

AI Insights

The case involves the L. G. Kakadia Education and Charitable Trust appealing against the order of the Commissioner of Income Tax (Appeals), which upheld the Assessing Officer's decision denying benefits under Sections 11 & 12 of the Income Tax Act, 1961. The primary contention was the incorrect consideration of the return filing date, which the Trust argued was erroneously taken as August 31, 2018, instead of the correct date, September 30, 2018. Additionally, the Trust contested the taxation of a corpus donation and the disallowance of deductions for expenses on the trust's objects, among other issues. The tribunal found merit in giving the Trust another opportunity to present its case, leading to the remand of the case to the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396573 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: MANOJ CHAUHAN ACCOUNTS
• Keywords: Capital receipt; Principle of natural justice; Charitable institution; Benefit of exemption
• Section: 154; 11; 12A; 139; 12

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 1914/Mum/2025 (Assessment Year: 2018-19) L. G. Kakadia Education and Charitable Trust CC 3100, Bharat Diamond Bourse, Bandra Kurla Complex, Mumbai – 400051. Vs. ITO Exemption Ward 1 (4) ITAT Building, Mumbai – 400020. PAN/GIR No. AAATL1948A (Appellant) : (Respondent) Assessee by : Shri. Manoj Chauhan (Accounts Executive of the Assessee Trust) Respondent by : Shri. Ram Krishn Kedia (SR. DR) Date of Hearing : 08.05.2025 Date of Pronouncement : 26.05.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) ADDL/JCIT (A), Raipur (‘ld. CIT(A)’ for short), passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2018-19. 2. The assessee has raised the following grounds of appeal: “1) On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the learned Assessing Officer i.e., the Assistant Commissioner of Income-tax (CPC), Bangalore (the AO) of denying benefits under Sections 11 & 12 of the Act. to the Appellant Trust by erroneously considering the date of filing of return of income as 31st August, 2018 instead 30th September, ITA No. 1914/Mum/2025 (A.Y. 2018-19) L. G. Kakadia Education and Charitable Trust 2 misunderstanding of basic fact and consequential denial of benefit of exemption uls 11 and 12 to the Trust, shall be annulled. 2) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the learned AO in bringing to tax, a sum of Rs 71,47,376/- being received by the Trust as a donation towards its Corpus, which is not taxable in the hands of the Appellant Trust. which ought to be allowed, being capital receipt, even if the appellant trust were found to be ineligible to the benefit of section 11 and 12 of the Act. Thus, the said addition is unjust, unreasonable and thus shall be deleted 3) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the learned AO in not granting deduction for expenses on the objects of the trust amounting to Rs 61,33,051/-, which ought to be allowed even uls 57(iii) of the Act even if the appellant trust were found to be ineligible to the benefit of section 11 and 12 of the Act. Thus, the order passed without granting such deduction is bad in law and shall be deleted 4) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the learned AO of making addition of Rs. 40,00,000/- being donations paid by the Appellant Trust which ought to have been allowed, as disallowance of deduction would result in double taxation of the same amount. Thus, the order passed confirming such addition is bad in law and thus shall be annulled 5) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in not considering the submission filed by the appellant trust in response to notice dated 28.10.2023 on 16.11.2013 and considering all the other notices. Thus, the order passed based on such pick and choose approach shall be annulled.” 3. Brief facts of the case are that the assessee is charitable trust registered u/s. 12A of the Act and had filed its return of income dated 07.12.2018, declaring total income at Rs. Nil/-. and the same was processed u/s. 143(1) of the Act, dated 30.09.2019, where the ld. AO/CPC determined the total income at Rs. 1,11,47,376/- which constituted disallowance towards corpus donation (capital receipt) of Rs. 71,47,376/- and Rs. 40,00,000/- as application of income given for Jawan’s welfare and Police welfare aggregating to Rs. 1,11,47,376/- on the ground that the assessee had filed the return of ITA No. 1914/Mum/2025 (A.Y. 2018-19) L. G. Kakadia Education and Charitable Trust 3 income u/s 139 belatedly after the due date for filing of the returns. The learned Assessing Officer ('ld. A.O.' for short)/CPC vide intimation dated 02.01.2020, determined the total income of Rs. 1,11,47,376/- thereby rejecting the assessee’s request u/s. 154 of the Act, for rectification and made various additions/disallowance to the total income of the assessee. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide an ex parte order dated 21.01.2025, dismissed the appeal filed by the assessee on the ground that the assessee has been non-compliant and has failed to substantiate its claim. 5. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 6. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the Section 143(1) order before the ld. CIT(A) but has been non-compliant throughout the appellate authority proceeding. 7. The assessee contended that the ld. CIT(A) has failed to consider that the ld. AO has erred in taking the due date for filing of return of income u/s. 139 of the Act as 31st August, 2018 as against 30th September, 2018 which is the actual due date for the assessee to file its return u/s. 139 of the Act. The assessee further contended that it has got a good case on the merits and prayed that the assessee may be given one more opportunity to present its case before the ld. CIT(A). 8. The learned Departmental Representative ('ld. DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunities by the ld. CIT(A) which was not availed by the assessee. ITA No. 1914/Mum/2025 (A.Y. 2018-19) L. G. Kakadia Education and Charitable Trust 4 9. On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation, where the ld. CIT(A) has also failed to decide the issue on the merits. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on its side and the ld. CIT(A) is also directed to decide the issue on the merits of the case based upon the submission of the assessee and in accordance with law. 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order Pronounced under Rule 34(4) of the ITAT Rules by placing result on the notice board on. 26.05.2025 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 26.05.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "