Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MANISH AGARWAL
O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Addl/ JCIT (A)-5, Chennai, dated 05/12/2024, in DIN & Order No.ITBA/APL/S/250/2024-25/1070904602(1) having Appeal No. ADDL/JCIT(A)-5, Chennai/10003/2014-15 for the assessment year 2015- 2016. 2. The assesee has challenged the appellate order on the strength of the following grounds appeal:-
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
2. For that, the learned CIT(A) has committed gross error of law as well as of fact, while confirming the intimation issued by the learned A.O. u/s.143(1) of the Act, which was issued determining the entire gross receipt as income of the Assessee trust, in ignoring the explanation and evidence submitted by the Assessee trust. The impugned order passed by the learned CIT(A), being not sustainable in the eye of law, needs to be quashed in the interest of justice.
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
, if any, at the time of hearing in the interest of justice.”
3. Brief facts of the case are that the assesee is a charitable trust and filed its Return of Income after claiming exemption u/s.11 & 12 as it is registered under section 12A of the Act. Since the Form 10B was not filed within the stipulated time limit, CPC while processing the return of income, has disallowed the expenditure claimed as application against the income/ receipt, which order was confirmed by the JCIT(A). Thus, the present appeal has been filed before us.
4. It is submitted by the assessee that in this case assessment was completed u/s 143(1) of the Act and even if the assessee has not filed the audit report in time, the income should have been computed by treating the assessee as AOP where the gross income cannot be taxed and only the expenses claimed should have been allowed.
3 4. He further submits that there was no occasion for the CPC to disallow such claim in the order passed u/s 143(1) of the Act where total receipts had been brought to tax on the ground that from 10B has been filed belatedly. He therefore submits that the assessee should be allowed deduction on account of expenditure claimed as the application against such receipts even if the audit report was not filed in time.
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.