SHETH HATHISING KESARISING TRUST,AHMEDABAD V. ITO WARD2, EXEMP, AHMEDABAD, AHMEDABAD

ITA 1765/AHD/2025

AI Insights

The case involves Sheth Hathising Kesarising Trust appealing against the order of the Additional/Joint Commissioner of Income Tax (A), Thiruvanantpuram, which dismissed their appeal regarding an adjustment of Rs. 44,00,000 made by the CPC during the processing of their income tax return for the Assessment Year 2018-19. The Trust argued that the adjustment was due to an arithmetical error and that all deductions claimed were correctly applied in their return. The Tribunal agreed with the Trust, noting the lack of opportunity given to the Trust by the Addl./JCIT(A) and the incorrect totaling of deductions by the CPC.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786453 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 22-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANANYA KULSHRESTH
• Assessee Lawyers: PRAKASH D. SHAH
• Keywords: Deemed to accrue or arise in india; Charitable institution
• Section: 12

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.1765/Ahd/2025 Assessment Year: 2018-19 Sheth Hathising Kesarising Trust, Mulewani Khadki, Ahmedabad City, Ahmedabad – 380 001. (Gujarat) [PAN – AABTS 0984 L] Vs. Income Tax Officer, Ward – 2 Exemption, Income Tax Office, Anandnagar-Prahladnagar Road, Vejalpur, Ahmedabad – 380 015. (Gujarat). (Appellant) (Respondent) Assessee by Shri Prakash D. Shah, AR Revenue by Smt. Ananya Kulshresth, Sr. DR Date of Hearing 17.11.2025 Date of Pronouncement 20.11.2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the Additional/Joint Commissioner of Income Tax (A), Thiruvanantpuram (in short “the Addl./JCIT(A)”) dated 10.07.2025 for the Assessment Year (A.Y.) 2018-19 in the proceeding under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2018-19 on 31.03.2019. The return was processed under Section 143(1) of the Act on 31.01.2020 by the CPC and while processing the return an adjustment of Rs.44,00,000/- was made by the CPC. Printed from counselvise.com ITA No.1765/Ahd/2025 (Assessment Year: 2018-19) Sheth Hathising Kesarising Trust vs ITO Page 2 of 6 3. Aggrieved with the adjustment made u/s 143(1) of the Act, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. Addl./JCIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee in second appeal before us. The following grounds have been taken in this appeal: - “1. That the learned Addl/JCIT (Appeal)/Thiruvanantpuram, has erred in law and facts by not quashing the Intimation order under section 143(1) passed by the Ld. CPC and therefore the Intimation order passed by CPC under section 143(1) of the Act, is required to be quashed and the Id.AO should be directed to accept the returned income. 2. That the learned Addl./JCIT (Appeal)/Thiruvanantpuram, has erred by allowing short deduction of Rs.44,00,000/- (Claimed Rs.7,96,41,564 Less Allowed Rs.7,52,41,564/- as there is Totalling Mistake of application in clause (TOTAL [4i + 4ii+4iii+ 4iv + 4v + 4vi + 4vii + 4viii]) in the Intimation order under section 143(1) of the Act and therefore the learned AO/CPC should be directed to allow deduction of application, as claimed in the return of income. 3. That the learned Addl./JCIT (Appeal)/Thiruvanantpuram has erred in law and facts by confirming the addition of income chargeable under section 11(1B) of the Act of Rs.44,00,000/- though the said amount has already been offered as income for the year under consideration under section 11(1B) of the Act, in the return of income for the assessment year consideration and therefore the Id. CPC/AO be directed to delete the said addition while computing the total income. 4. That your appellant craves a leave to add, alter or amend any grounds at the time of hearing.” 5. Shri Prakash D. Shah, Ld. AR of the assessee, explained that in the intimation under Section 143(1) of the Act issued by the CPC, there was an arithmetical error which had resulted in addition of Rs.44,00,000/-. He submitted that the Ld. Addl./JCIT(A) had dismissed the appeal of the assessee without allowing any opportunity to the assessee and without Printed from counselvise.com ITA No.1765/Ahd/2025 (Assessment Year: 2018-19) Sheth Hathising Kesarising Trust vs ITO Page 3 of 6 correctly appreciating the facts of the case. The Ld. AR has taken us through the copy of the return as well as the intimation which were brought on record in the paper-book filed by the assessee and explained that all the deductions claimed by the assessee in the return of income were duly allowed by the CPC while processing the return and a totalling mistake was apparent in the working of CPC. He further submitted that the adjustment as made by the CPC was beyond the scope of provisions of Section 143(1) of the Act. 6. Per contra, Smt. Ananya Kulshresth, Ld. Sr. DR submitted that the adjustment made by the CPC was correct. She submitted that the assessee did not show any amount as accumulated/set apart within the meaning of Section 11(2) in the return of income, which was considered by the Ld. Addl./JCIT(A) while dismissing the appeal of the assessee. 7. We have considered the rival submissions. It is found from the order of the Ld. Addl./JCIT(A) that no opportunity was allowed to the assessee and he had dismissed the appeal as ex-parte without giving an opportunity to the assessee, which cannot be held as correct. We have gone through the return of income as well as the intimation under Section 143(1) brought on record by the assessee. The aggregate of income referred to in section 11, 12 & Section 10(23C) of the Act, derived during the year excluding voluntary contribution, was disclosed at Rs.7,52,41,564/- in the return of income. From this amount, deductions were claimed in respect of application of income for charitable purpose and certain additions were also made in respect of income chargeable u/s 11(1B) of the Act. In the intimation under Section 143(1) of the Act, the deduction claimed by the Printed from counselvise.com ITA No.1765/Ahd/2025 (Assessment Year: 2018-19) Sheth Hathising Kesarising Trust vs ITO Page 4 of 6 assessee and the deduction as computed under Section 143(1) are found to be as under: - 4 DEDUCTIONS As per Return As computed u/s 143(1) (1) AMOUNT APPLIED DURING THE PREVIOUS YEAR – REVENUE ACCOUNT (24 OF SCHEDULE ER) 6,56,31,990 6,56,31,990 (II) AMOUNT APPLIED DURING THE PREVIOUS YEAR – CAPITAL ACCOUNT [EXCLUDING APPLICATION FROM BORROWED FUNDS] (8A OF SCHEDULE EC) 8,75,000 8,75,000 (III) AMOUNT APPLIED DURING THE PREVIOUS YEAR – CAPITAL ACCOUNT (REPAYMENT OF LOAN) 0 0 (IV) AMOUNT APPLIED DURING THE PREVIOUS YEAR – UTILISATION OF DEEMED INCOME OF AN EARLIER YEAR [ITEM NO.24(B) OF SCHEDULE ER + ITEM No.8(B) OF SCHEDULE EC] 0 0 (V) AMOUNT DEEMED DURING THE PREVIOUS YEAR AS PER CLAUSE (2) OF EXPLANATION TO SECTION 11(1) 18,50,000 18,50,000 (a) IF (IV) ABOVE APPLICABLE, WHETHER OPTION FORM NO.9A HAS BEEN FURNISHED TO THE ASSESSESSING OFICER Y Y (b) IF YES, DATE OF FURNISHING FORM NO.9A (DD/MM/YYYY) 16-OCT-18 16-OCT-18 (VI) AMOUNT ACCUMULATED OR SET APART FOR APPLICATION TO CHARITABLE OR RELIGIOUS PURPOSES OR FOR THE STATED OBJECTS OF THE 1,12,84,575 1,12,84,575 Printed from counselvise.com ITA No.1765/Ahd/2025 (Assessment Year: 2018-19) Sheth Hathising Kesarising Trust vs ITO Page 5 of 6 TRUST/INSTITUTION TO THE EXTENT IT DOES NOT EXCEED 15 PER CENT OF INCOME DERIVED FROM PROPERTY HELD IN TRUST/INSTITUTION UNDER SECTION 11(1)(a)/11(1)(b) OR IN TERMS OF THIRD PROVISO TO SECTION 10(23C) [RESTRICTED TO THE MAXIMUM OF 15% OF (2+3) ABOVE] (VII) AMOUNT IN ADDITION TO AMOUNT REFERRRED TO IN (V) ABOVE ACCUMULATED OR SET APART FOR SPECIFIED PURPOSES IF ALL THE CONDITIONS IN SECTION 11(2) NAD 11(5) OR THIRD PROVISO TO SECTION 10(23C) ARE FULFILLED (FILL OUT SCHEDULE I) 0 0 (VIII) AMOUNT ELIGIABLE FOR EXEMAPTION UNDER SECTION 11(1)(c) 0 0 (A) APPROVAL NUMBER GIVEN BY THE BOARD 0 0 (B) DATE OF APPROVAL BY BOARD TOTAL [4I+4II+4III+4IV+4V+4VI+4VII+4VIII] 7,96,41,565 7,52,41,564 8. It is thus found that all the deductions as claimed by the assessee were duly accepted by the CPC while processing the return. However, there was a totalling mistake made by the CPC and the total of Rs.7,96,41,565/- of the deductions was wrongly taken at Rs.7,52,41,564/- by the CPC. As regarding the addition of income chargeable u/s 11(1B) of the Act, there is no difference in the figure of the assessee and the figure as computed by the CPC, as the amount of Rs.44,00,000/- is appearing in both the columns. It is thus apparent that the CPC had wrongly computed the gross income of Rs.44,00,000/- which was due to Printed from counselvise.com ITA No.1765/Ahd/2025 (Assessment Year: 2018-19) Sheth Hathising Kesarising Trust vs ITO Page 6 of 6 wrong totalling of the four deductions claimed by the assessee and allowed while processing the return. Considering the fact that income of Rs.44,00,000/- was wrongly computed by the CPC, which was due to arithmetical mistake in totalling the deductions as mentioned at S. No.4 of the intimation, the addition of Rs.44,00,000/- made u/s 143(1) of the Act is deleted. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on this 20th November, 2025. Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 20th November, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "