SHREE BAANKE BIHARI CHARITABLE TRUST,NEHRU NAGAR V. ASSTT.COMMR.OF INCOME TAX ,CIRCLE-1(1),BHILAI, BHILAI

ITA 374/RPR/2024

AI Insights

The case involves Shree Banke Bihari Charitable Trust appealing against the order of the Addl/JCIT(A)-1, Gurugram, which arose from an intimation issued by the Centralized Processing Center (CPC)/A.O under Sec.143(1) of the Income-tax Act, 1961. The trust contested the computation of total receipts and the determination of total income without allowing deductions for revenue expenses. The tribunal found that the CPC/A.O had erroneously added certain receipts twice, leading to a double assessment. Furthermore, it was determined that the trust's claim for deduction of expenses should be considered, as the trust had not been granted exemption under section 11 of the Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469748 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-10-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 09-08-2024
• Other Referred Cases: Shri Jain Shwetamber Murtipujak Sangh Vs. ITO (Exemption), Ward-1, Raipur
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: MOOLCHAND JAIN
• Keywords: Condonation of delay; Opportunity of being heard; Depreciation; Charitable institution
• Section: 143(1); 11; 12A; 13; 119(2)(b); 10B

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.374/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2018-19 Shree Banke Bihari Charitable Trust 67, Nehru Nagar, Bhilai (C.G.)-490 020 PAN: AALTS9903P .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax, Circle-1(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Moolchand Jain, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 22.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 24.10.2024 2 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee trust is directed against the order passed by the ADDL/JCIT(A)-1, Gurugram dated 20.06.2024, which in turn arises from the intimation issued by the Centralized Processing Center (CPC)/A.O under Sec.143(1) of the Income- tax Act, 1961 (in short ‘the Act’) dated 18.03.2020 for the assessment year 2018-19. The assessee trust has assailed the impugned order on the following grounds of appeal: “1. That the learned A.O., CPC has erred in computing, the total receipts at Rs.7,92,389/- against Rs.4,70,1221-. As per Income & Expenditure A/c total receipts from Donations is Rs. 3,22,267/- and other income is Rs.1,47,855/-, but the learned A.O. has again. added the figure of Rs.3,22,267/- in column 13 in the total receipts and computed the total receipt at Rs.7,92,389/-, which is a mistake glaringly apparent on the face of the record and the learned Addl/JCIT(A), Gurugram has erred in law & on facts in maintaining the same. 2. That the learned A.O. had erred in law & on facts in determining total income levying tax on the gross receipts (which figure is also wrong) without allowing deduction for the revenue expenses as per normal accounting -principles and the learned Addl./JCIT(A) has also erred in law & on facts in maintaining the same. 3. That the order passed by the learned Addl./JCIT(A) is prejudiced and without considering the written submission and the records, which is had in law. 4. That the appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing.” 2. Succinctly stated, the assessee trust which is stated to be registered u/s. 12A of the Act, had filed its return of income on 23.01.2019 i.e. beyond 3 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 the extended “due date”, declaring its income at Rs. Nil after claiming exemption u/s. 11 of the Act. 3. Ostensibly, as observed by the ADDL/JCIT(A), the assessee’s claim for exemption u/s.11 of the Act was declined by the CPC/A.O, Bengaluru vide intimation u/s. 143(1) of the Act, dated 18.03.2020 and its income was determined at Rs.7,92,389/-. 4. As is discernible from the order of the Addl/JCIT(A), it transpires that the A.O/CPC, Bengaluru had disallowed the claim of the assessee trust for exemption u/s. 11 of the Act because it had failed to submit “Form 10B” through online mode. The Addl/JCIT(A) observed that as the assessee trust was compulsorily required to have filed “Form 10B” within the stipulated time period and that too as per the prescribed procedure, therefore, the AO/CPC, Bengaluru had rightly declined its claim for exemption u/s.11 of the Act. Also, the ADDL/JCIT(A) observed that as per Section 119(2)(b) of the Act, the Assessing Officer (A.O), Joint Commissioner of Income Tax (Appeals) [JCIT(A)] and Commissioner of Income Tax (Appeals) [CIT(A)] did not have any authority to grant condonation for delay in filing of “Form 10B”. It was observed by him that the assessee applicant was vested with an option to approach the jurisdictional Commissioner of Income Tax, Chief Commissioner of Income Tax or Principal Commissioner of Income Tax for the condonation of the delay in filing “Form 10B” and to claim the benefits 4 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 of Sections 11/12 of the Act. Accordingly, the Addl/JCIT(A), finding no infirmity in the view taken by the A.O/CPC upheld the declining of the claim of the assessee trust for exemption u/s 11 of the Act, and dismissed the appeal. 5. The assessee trust being aggrieved with the order of the Addl/JCIT(A) has carried the matter in appeal before the tribunal. 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 7. Shri Moolchand Jain, Ld. Authorized Representative (for short ‘AR’) of the assessee trust, at the threshold submitted that the assessee trust had not assailed the declining of its claim for exemption u/s.11 of the Act. Elaborating further on his contention, the Ld. AR submitted that the A.O/CPC, Bengaluru had grossly erred in sustaining the adjustments carried out by the A.O/CPC vide his intimation issued u/s. 143(1) of the Act on two grounds, viz.(i). that the computing of the income of the assessee trust at Rs.7,92,389/- by the AO/CPC, Bengaluru had resulted to double assessing of its receipts/income to the tune of Rs. 3,22,267/-; and (ii) that the AO/CPC, Bengaluru had erred in law and facts of the case in not allowing the assessee’s claim for deduction of expenses while deducing its true income in a commercial manner. 5 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 8. Apropos the claim of the assessee trust that the determining of its income by the AO/CPC, Bengaluru at Rs.7,92,389/- had resulted to double assessing of its receipts/income to the tune of of Rs.3,22,267/-, the Ld. A.R had drawn my attention to the “Income and expenditure account” of the assessee trust for the year under consideration, which for the sake of clarity is culled out as under: PARTICULARS AMOUNT PARTICULARS AMOUNT AUDIT FEES PAYABLE BANK CHARGES DEPRECIATION ELECTRICITY CHARGES FESTIVAL & FUNCTION LEGAL FEES PAYABLE MISCELLANOEUS EXPENSES POOJA EXPENSES PRINTINING & STATIONARY PROFESSIONAL FEES STAFF SALARY 9,000.00 - 49,747.00 1,04,707.00 1,08,501.00 5,000.00 12,660.00 70,067.00 1,555.00 5,500.00 2,28,000.00 GENERAL DONATIONS MISC. RECEIT FROM DONATION BOX RENTAL INCOME FROM HALL AND MANDIR BANK INTEREST DEFICIT CARRIED OVER TO BALANCE SHEET 56,100.00 2,66,167.00 1,27,800.00 20,055.00 1,24,615.00 TOTAL AMOUNT 5,94,737.00 TOTAL AMOUNT 5,94,737.00 The Ld. AR, submitted that the gross receipts/income of the assessee trust, which aggregated to Rs.4,70,122/- was comprised of, viz. (i) general 6 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 donations: Rs.56,100/-; (ii). Misc. receipts from donation box :Rs.2,66,167/-; (iii) rental income from hall and mandir: Rs.1,27,800/-; and (iv) bank interest: Rs.20,055/-. The Ld. AR submitted that the A.O/CPC, Bengaluru while processing the return of income of the assessee trust u/s. 143(1) of the Act, had after aggregating its total income at Column 7 of its intimation at Rs.4,70,122/-(supra) had, thereafter, wrongly made a separate addition of Rs.3,22,267/-, viz. (i) general donation: Rs.56,100/-; and (ii) Misc. receipts from donation box: Rs.2,66,167/-, which already was included in its total income of Rs.4,70,122/- (supra). The Ld. AR to buttress his aforesaid claim had taken me through the intimation issued by the CPC/A.O, Bengaluru u/s 143(1) of the Act, dated 18.03.2020 which fortified his aforesaid claim. It was submitted by him that as the assessee trust had been visited with double addition to the extent of Rs.3,22,267/-, therefore, its income that was wrongly determined by the AO/CPC, Bengaluru was required to be scaled down by the aforementioned impugned addition. The Ld. AR, submitted that though the assessee trust had filed an application seeking rectification of the aforesaid mistake u/s.154 of the Act but the same is pending for four years and had not been disposed off. 9. Per contra, the Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 7 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 10. Apropos the Ld. AR’s claim that the A.O/CPC, Bengaluru after declining the assessee’s claim for exemption u/s.11 of the Act ought to have allowed its claim for deduction of expenses while deducing its true income in a commercial manner, had once again drawn my attention to the “Income and expenditure account” of the assessee trust. The Ld. AR submitted that the assessee’s claim for deduction of expenses aggregating to Rs.3,53,762/- , viz. (i) audit fees payable: 9,000/-; (ii) Electricity charges: Rs.1,04,707/-; (iii) legal fees payable: Rs.5,000/-; (iv) printing and stationary expenses: Rs.1,555/-; (v) professional fees: Rs.5,500/-; and (vi) staff salary: Rs.2,28,000/- ought to have been allowed for deducing the true income of the assessee trust. 11. I have thoughtfully considered the aforesaid contentions advanced by the Ld. Authorized Representatives in the backdrop of the material available on record. Admittedly, it is a matter of fact borne from the intimation issued u/s. 143(1) of the Act, dated 18.03.2020 by the CPC/A.O, Bengaluru, that the income of the assessee trust from general donations and misc. receipts from donation box aggregating to Rs.3,22,267/- (supra) was included in the total income of Rs.4,70,122/- (supra). I concur with the Ld. AR’s claim that an amount of Rs.3,22,267/- (supra) had inadvertently separately been added by the A.O/CPC, Bengaluru which, thus, had resulted to a double addition to the said extent in the hands of the assessee trust. Accordingly, I direct the A.O to vacate the addition of Rs. 3,22,267/-. 8 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 12. Apropos the Ld. AR’s contention that after declining of the assessee’s claim of exemption u/s.11 of the Act, the AO ought to have allowed its claim for deduction of expenses, I find substance in the same. I find that a similar issue had been dealt with by the ITAT, Raipur in the case of Shri Jain Shwetamber Murtipujak Sangh Vs. ITO (Exemption), Ward-1, Raipur, ITA Nos. 15 & 16/RPR/2022, dated 22.05.2023, wherein the Tribunal after necessary deliberations had held as under: “15. Be that as it may, as the assessee-trust does not cumulatively satisfy the set of conditions specified in Para 4(i) of the CBDT Circular No.10 (supra), and also had not filed any application for condonation of delay u/s.119(2)(b) of the Act as provided in Para 4(ii) of the said circular, therefore, there remains no occasion for condoning the delay involved in filing of Form 10B by the assessee beyond the stipulated time period. I, thus, on the basis of my aforesaid observations, find no infirmity in the view taken by the lower authorities who had rightly declined the assessee's claim for exemption u/s.11 of the Act. However, I may herein observe that the A.O after declining the assessee's claim for exemption u/s.11 of the Act could not have summarily held its gross receipts of Rs.24,83,562/- as its income. In sum and substance, the A.O after treating the assessee as an unregistered trust was obligated to have considered its claim for deduction of expenses as were raised in the income and expenditure account. Accordingly, on the basis of my aforesaid deliberations, I though uphold the declining of the assessee's claim for exemption u/s.11 of the Act, but at the same time, restore the matter to the file of the A.O with a direction to consider the assessee's claim for deduction of expenses as debited in the income and expenditure account, i.e. to the extent the same are allowable under the Act. Needless to say, the A.O shall grant a reasonable opportunity of being heard to the assessee in the course of set-aside proceedings.” As the facts and the issue involved in the present appeal remain the same as was there before the Tribunal in the aforesaid case (supra), therefore, I 9 Shree Banke Bihari Charitable Trust Vs. ACIT, Circle-1(1), Raipur ITA No. 374/RPR/2024 respectfully follow the same. Accordingly, on similar terms, I restore the aforesaid issue to the file of the A.O with a direction to verify the maintainability of the assessee’s claim for deduction of the aforesaid expenses aggregating to Rs. 3,22,267/- (supra). 13. In the result, the appeal of the assessee trust is allowed in terms of the aforesaid observations. Order pronounced in open court on 24th day of October, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 24th October, 2024. **#SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "