INDIAN NATIONAL ASSOCATION FOR STUDY OF THE LIVER,CUTTACK vs. ITO EXEMPTION, CUTTACK

PDF · subscribers
ITA 10/CTK/2023Status: HeardITAT Cuttack12 June 2024AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while lack of Section 12A registration means income is assessed as business income, expenses related to such receipts must still be considered. The matter was restored to the AO for examination and allowance of eligible expenses.

What were the facts?

The assessee's return of income for AY 2018-19 was processed under Section 143(1) with entire expenses disallowed due to lack of Section 12A registration. The assessee filed a rectification application under Section 154, which was rejected by the AO.

What were the issues?

Whether the entire expenses can be disallowed solely due to lack of Section 12A registration, and if rectification under Section 154 is appropriate for considering such expenses.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: MANISH AGARWAL

For Appellant: Shri B.N. Behera/P.K.Mishra/Himanshu Jena, Shri B.N. Behera/P.K.Mishra/Himanshu Jena, Advs
For Respondent: Shri Sanjay Kumar, CIT
Hearing: 12/0Pronounced: 12/0

This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld CIT(A), CIT(A), NFAC, NFAC, Delhi Delhi dated dated 13.12.2022 13.12.2022 in in Appeal Appeal No.CIT(A), No.CIT(A),

P a g e 1 | 4 Cuttack/10827/2019-20 against the rejection of the rectification u/s.154 of the Act for the assessment year 2018-19.

2.

Shri B.N.Behera/P.K.Mishra/Himanshu Jena, ld ARs appeared for the assessee and Shri Sanjay Kumar, Ld CIT DR appeared for the revenue.

3.

It was submitted by ld AR that the assessee had filed its return of income for the relevant assessment year on 30.9.2018 and intimation u/s.143(1) came to be issued on 2.1.2020, wherein, the entire expenses of the assessee had been disallowed. It was the submission that no show cause notice had been issued to the assessee. It was the submission that the assessee had filed application u/s.154 of the Act before the Assessing Officer on 26.11.2019. In the rectification application, the assessee has specifically claimed the allowance of expenses of Rs.2,58,43,396/- which is the same amount as mentioned in the intimation. It was the submission that the Assessing Officer, on the ground that the assessee did not have registration u/s.12A of the Act denied the expenditure claimed by the assessee. It was the submission that the denial of the registration u/s.12A of the Act would not amount to disallowance of the entire expenses. It only amounts to denial of exemption. He submitted that he had no objection if the issues are restored to the file of the AO for verification of the expenses and allowance of the same. Ld CIT DR had no objection if the issues are restored to the file of the AO for verification of the expenses and allowance.

P a g e 2 | 4

4.

We have considered the rival submissions. The facts in the present case clearly show that the assessee is not having registration u/s.12A of the Act. Once it is found that the assessee does not have registration u/s.12A of the Act, the income of the assessee is liable to be assessed as business income. Once the total receipts of the assessee are being considered, then obviously the expenses in relation to such receipts would also have to be considered. This being so, as it is noticed that the Assessing Officer has not considered the expenses claimed by the assessee, the issues are restored to the file of the AO for examination of the various expenses claimed by the assessee and if it is found that the expenditure are incurred for the purpose of earning the income, same is liable to be allowed.

5.

In the result, appeal of the assessee stands partly allowed for statistical purposes.

Order dictated and pronounced in the open court on 12/06/2024.

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →