USHA AGGARWAL TRUST,DELHI V. ITO,WARD- EXEMPTION 1(3), NEW DELHI

ITA 5046/DEL/2024

AI Insights

The case involves the Usha Aggarwal Trust, a charitable organization, appealing against the denial of exemption under Section 11 of the Income-tax Act, 1961, for the assessment year 2016-17. The Trust was initially denied the exemption by the Assessing Officer due to not applying 85% of its receipts for charitable purposes. However, the Trust had filed Form No. 10 seeking accumulation of funds, which was overlooked by the lower authorities. The Tribunal examined the Trust's activities and compliance with statutory requirements, ultimately ruling in favor of the Trust by acknowledging its compliance with Section 11 through the proper filing of Form No. 10.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708325 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: B. K. ANAND
• Keywords: Charitable institution
• Section: 143(3); 11; 12A

Judgement Text

"INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 5046/Del/2024 (Assessment Year: 2016-17) Usha Aggarwal Trust, 4792/23, Daryaganj, New Delhi Vs. ITO, Ward-Exemption (1(1), New Delhi (Appellant) (Respondent) PAN:aaatd8944n Assessee by : Shri B. K. Anand, CA Revenue by: Shri Om Prakash, Sr. DR Date of Hearing 02/07/2025 Date of pronouncement 16/07/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.5046/Del/2024 for AY 2016-17, arises out of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024-25/1068047598(1) dated 28.08.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 29.10.2018 by the Assessing Officer, ITO, Ward Exemption-1(3), New Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in denying the claim of exemption u/s 11 of the Act to the assessee in the facts and circumstances of the instant case. ITA No. 5046/Del/2024 Usha Aggarwal Trust Page | 2 3. We have heard the rival submissions and perused the material available on record. The assessee is a charitable trust duly registered u/s 12A of the Act and accordingly eligible for exemption u/s 11 of the Act subject to compliance of conditions prescribed u/s 11 to 13 of the Act. The assessee trust was established vide deed dated 18.02.2005 with the objects of advancement of general public utility, providing financial assistance to students and educational institution by way of scholarship and grants and also relief to poor by way of medical and financial assistance. Over the years, it was donating books to various schools and colleges libraries and also scholarship to students of both at college and high school level on the basis of requests it received from such institutions. However, with the advancement in technology, more educational materials were available on internet such that the students preferred to online reading rather than hard cover of books resulting in dwindling demand for assistance from schools and colleges and a consequent reduction of assistance outflow from the assessee trust. Thus, the accumulation of funds was building up and assessee could not fulfill the requirement of applying 85% of its receipts for charitable purpose. 4. At the outset, on perusal of the objects of the trust which are listed in brief hereinabove, we find that the assessee trust is indeed a charitable trust engaged in imparting education, relief to the poor apart from medical relief. Since, the requisite 85% criteria for application of funds for charitable purposes were not fulfilled by the assessee during the year under consideration, the ld AO proceeded to deny the benefit of the claim of exemption u/s 11 of the Act. It is a fact that the assessee had filed Form No. 10 on 15.10.2016 itself electronically seeking accumulation of fund. The copy of Form 10 dated 07.09.2016 which was electronically uploaded on 15.10.2016 is duly placed on record which has been completely ignored by the lower authorities. Hence, the assessee having not spent ITA No. 5046/Del/2024 Usha Aggarwal Trust Page | 3 the requisite 85% of receipts during the year and having filed statutory Form No. 10 for accumulation of fund and electronically uploading the same on 15.10.2016 before the ld AO had duly complied with the provisions of Section 11 of the Act. Hence, the assessee would be entitled to claim of exemption u/s 11 of the Act in the facts and circumstances of the instant case. Accordingly, grounds raised by the assessee are hereby allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 16/07/2025. -Sd/- -Sd/- (VIKAS AWASTHY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16/07/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "