JOHARIMALL PUBLIC CHARITABLE TRUST,CUTTACK vs. ITO (EXEMPTION WARD), CUTTACK

It was submitted by the ld AR that the assessee is a charitable trust, which is doing the activity of running a school. It was the submission that the assessee’s total receipts during the relevant assessment year from its operation of running a school, was only about Rs.13 lakhs. It was the submission that the assessee has the registration u/s.12A of the Act. It was the further submission that Form 10B was filed belatedly. It was the submission that when the return of income was filed by the assessee, the same was processed by issuance of intimation u/s.143(1) of the Act, wherein the benefit of exemption u/s.12A of the Act has been denied. On 2 appeal, the ld. CIT(A) accepted the alternate contention of the assessee that the assessee is entitled to the benefit of other deductions when its income is being assessed as an AOP. It was the submission that at the outset, the assessee is entitled to the benefit of deduction u/s.10(23C)(iiiad) of the Act as the total receipts of the assessee was below Rs.1 crore and there was also no necessity for filing of the form 10BB in such circumstances. It was the submission that these were clearly no adjustments that could be done in an intimation u/s.143(1) of the Act. It was the submission that in the application u/s.154 of the Act, the assessee had categorically brought out the issue that Form 10B has been filed and the specified adjustments have been done in the intimation u/s.143(1) of the Act, which was not permissible under the provisions of Section 143(1) of the Act. It was the prayer that the intimation issued u/s.143(1) of the Act may kindly be annulled and the appeal of the assessee be allowed.

In reply, the ld. Sr. DR submitted that the assessee has not raised the claim of the deduction u/s.10(23C)(iiiad) of the Act. It was the submission that without the claim being there, it was not possible to consider such a claim. It was further submitted that the ld. CIT(A) himself has allowed the alternate claim of the assessee of the deduction available when the income of the assessee was assessed u/s.56 of the Act. It was the prayer that the order of the ld. CIT(A) is liable to be upheld.

I have considered the rival submissions. A perusal of the order of the ld. CIT(A) clearly shows that the ld. CIT(A) has proceeded to give a 3 direction to the AO to consider the alternate claim of the assessee in respect of the assessment of the income of the assessee u/s.57 of the Act. This, admittedly, has not been challenged by the revenue. Thus, the fact that the ld. CIT(A) himself has felt that the intimation u/s.143(1) is to be modified itself shows that the intimation issued by the AO is erroneous per se. This being so, admittedly the adjustments as has been done by the AO is not something that can be done in an intimation u/s.143(1) of the Act. Consequently, the intimation issued u/s.143(1) of the Act stands quashed.

Further, even otherwise, when the benefit of deduction u/s.12A of the Act was being denied, it was incumbent upon the AO to grant the assessee the benefit of deduction u/s.10(23C)(iiiad) of the Act, especially because an AO is not just an Assessing Authority, he is not only a tax collector but he is a tax assessor and if any benefit is due to the assessee, it is incumbent upon the authority to grant such benefit as permissible under the law.

In the result, appeal filed by the assessee stands allowed. Order dictated and pronounced in the open court on 21/11/2023. (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 21/11/2023 Prakash Kumar Mishra, Sr.P.S.