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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MANISH AGARWAL
O R D E R आदेश आदेश आदेश Per Bench : This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 23.07.2024, passed in appeal No.CIT(A), NFAC/2018-19/10036113 vide DIN & Order ITBA/NFAC/S/250/2024-25/1066952057(1) for the assessment year 2017-2018, on the following grounds of appeal :-
1. That the calculation of total income of Rs 26195428/- in the Computation sheet taking wrongly revenue expenditure of the Schedule ER as 0 instead of Rs.3,14,09,252/- during the year as taxable income is arbitrary, purely surmise and unjustified in law to the particular facts and circumstance of the case.
2. That the revenue expenditure of Rs.3,14,09,252/- in the Computation sheet has been taken at 0 but the A.O in the order U/s 143(3) total Income determined as Nil, but the learned CIT(Appeal) has dismissed the Appeal and uphold the revenue Expenditure of Rs.3,14,09,252/- as disallowance, is unjustified and uncalled for to the particular facts and circumstance of the case.
3. That the Appellant craves leave to add or amend any grounds of appeal and put-forth evidences and urge other ground during the course of hearing.
4. PRAYER:-
2 That the Appellant prays that the revenue expenditures of Rs 31409252/- during the year may kindly be taken while calculating Total Income in the Computation sheet and levy of tax and interest in the demand notice may kindly be waived in the interest of justice for which the Appellant shall as in duty bound ever pray.
Since both the grounds of appeal are related to one issue of charging tax on the total income of Rs.3,12,71,078/- in computation of income though no addition was made in the assessment, thus, the same are canvassed together for the sake of convenience.
Brief facts of the case are that the assessee is a trust registered u/s.12A of the Act and also had approval u/s.80G of the Act. The assessee had also been approved u/s.10(23C)(iv)(v) of the Act. The return of income was filed on 25.10.2019 declaring Nil income. The AO after examining the claim of the assessee was of the view that the assessee was engaged in the charitable activities as provided in its memorandum and had not claimed any deduction u/s.35(1)(ii)(iii) of the Act. However, while computing the tax as per the computation sheet attached to the assessment order,, the income of the assessee was taken at Rs.3,12,71,078/- and a demand notice of Rs.1,13,76,574/- was issued along with the assessment order. The assessee preferred appeal before the ld. CIT(A) against such order and also filed an application u/s.154 of the Act for rectification before the AO. Ld. CIT(A) while deciding the appeal of the assessee failed to appreciate the fact that the assessee has not made any claim u/s.35(1)(ii)(iii) of the Act and confirmed the income computed as per the Income Tax Computation sheet at Rs.3,14,09,252/-.
In the meantime, the AO has rectified the assessment order in terms of 3 rectification order dated 03.05.2024 and computed the income of the assessee at Nil. This fact was not brought to the notice of the ld. CIT(A).
Thus, the entire confusion was created.
Before us, ld. AR submitted a copy of the rectification order which reads as under :-
4 5. From the perusal of the same, it is found that the error committed by the AO in the computation sheet was rectified in terms of the order date 03.05.2024, however, as this order was not communicated to the ld. 5 CIT(A), the same remained unconsidered by the ld. CIT(A) while disposing the appeal of the assessee. It is further noticed that the ld. CIT(A) has wrongly observed that the assessee has made claim u/s.35(1)(ii)(iii) of the Act though after examination of the records it was specifically observed by the AO in para 5 of the order that no such claim was made in the return, therefore, the order of the ld. CIT(A) is contrary to the facts of the case. In view of these facts and considering that the AO himself has already rectified the assessment order, the order of the ld. CIT(A) is set aside and the income finally computed by the ld. AO as per the order passed u/s.154 of the Act, dated 03.05.2024 is hereby upheld.
In the result, appeal of the assessee is allowed.