PRAGATI CHARITABLE TRUST,PURI vs. INCOME TAX OFFICER, EXEMPTION WARD, BHUBANESWAR, BHUBANESWAR

1. For that, when the learned A.O. has no power and authority to determine the income of the Assessee trust, treating the entire gross receipt as Income, while processing the return u/s.143(1) of the Act for Assessment year 2015-16, the learned CIT(A) has committed gross error of law in confirming the said order, as such, order passed by the learned CIT(A) as well as by the learned A.O., being not sustainable in the eye of law, needs to be quashed in the interest of justice 2

For that the learned A.O. as well as the learned CIT(A) have committed gross error of law in not allowing the deductions u/s.57 of the Act, while computing the total income of the Assessee, in absence of benefit of exemption, because of delay in uploading of audit report, as such, the income determined by the authorities below being not sustainable in the eye of law, needs to be deleted and the income returned needs to be accepted in the interest of justice..

For that, your Appellant Trust craves leave of this Hon'ble Tribunal to urge other grounds of Appeal

Per Contra, the ld Sr DR vehemently supported the orders of the lower authorities and submits that since the assessee has not filed the audit report in time and the expenses claimed in the nature of application of the gross receipts, they cannot be held as the expenditure incurred to earn such income therefore the disallowances as made by the CPC is correct and he prayed accordingly.

We have considered the rival submissions. From the perusal of the intimation u/s 143(1) of the Act, it clear that the assessee has filed its return and has claimed exemption u/s 11 & 12 of the Income Tax Act. It is an admitted fact that form 10B was filed belatedly. Thus, in such circumstances income of the assessee is to be computed on the basis of the Income & Expenditure account and entire income cannot be brought to tax. The Co-ordinate bench of this tribunal in the case of Meghna Charitable Trust in vide an order dated 12.12.2024 under identical circumstances has held that the disallowances of entire application in an intimation u/s 143(1) of the Act is an adjustment which is not permissible in the order passed u/s 143(1) of the Act. Since the income of the assessee is computed as business income, it is incumbent 4 on the AO to allow the necessary outgoing in the nature of expenses out of such income while processing the intimation u/s 143(1) of the Act. The Act does not permit the AO to make any kind of adjustment by not allowing expenditure out of such income while processing the return u/s.143(1) of the Act. Under these circumstances, we are of the view that the CPC is not correct in not allowing the expenditure claimed by the assessee as application out of the income of this receipts so declared.

Therefore, we are of the view that the adjustment has done by the CPC in an intimation u/s 143(1) of the Act is infeasible and stands quashed.

In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 17/12/2024. (GEORGE MATHAN) (MANISH AGARWAL) लेखा सद"य/ ACCOUNTANT MEMBER "याियक सद"य / JUDICIAL MEMBER कटक Cuttack; "दनांक Dated 17/12/2024 Prakash Kumar Mishra, Sr.P.S.