THE NAGAR VACHANALAYA VITA,SANGLI vs. INCOME TAX EXEMPTION, WARD- KOLHAPUR, KOLHAPUR
No AI summary yet for this case.
Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI R.S. SYAL
PER R.S. SYAL, VP:
These two appeals by the assessee arise out of the separate
orders, both dated 10-08-2023, passed by the ld. CIT(A) in National
Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act,
1961 (hereinafter also called ‘the Act’) in relation to the assessment
years 2016-17 & 2017-18. Since both the appeals are based on
identical facts and common grounds of appeal, I am, therefore,
proceeding to dispose them off by this consolidated order for the sake
of convenience.
2 ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita
At the outset, it is relevant to mention that the additional ground
raised by the ld. AR was not pressed at the time of hearing. The same
is, therefore, dismissed as ‘not pressed’.
The only issue raised through the solitary effective ground is the
disallowance of expenses incurred for charitable purposes after the
denial of exemption.
Briefly stated, the facts of the case, are that the assessee is a
Public Charitable Trust providing Books, Magazines, Newspaper etc.
to the public at large. For the A.Y. 2016-17, the assessee received a
grant from the State Government and incurred expenses which were
not allowed by the Centralized Processing Centre (CPC), Bengaluru at
the time of processing the return u/s.143(1) of the Act. The assessee
contended before the ld. CIT(A) that deduction be allowed towards
expenses incurred, if exemption was not to be allowed. The ld.
CIT(A) opined that registration u/s.12A was a pre-requisite for
claiming exemption u/s.11 & 12. Since the assessee was not
registered in terms of section 12A, the ld. CIT(A) denied the benefit of
exemption, without expressing any specific opinion on the
deductibility of expenses.
I have heard the rival submissions and perused the relevant
material on record. It is an undisputed fact that the assessee was not
3 ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita
granted exemption u/s.11. The ld. AR was fair enough not to press for
the grant of benefit of exemption u/s.11. The limited relief contended
before the ld. CIT(A) as well as the Tribunal is that the income should
be charged to tax and not the gross receipts. The ld. AR furnished
details of certain expenses and requested for the granting of necessary
relief. There can be no dispute on the fact that the tax is charged on
income and income is deduced by reducing the deductible
expenses/allowances from the revenue receipts. If exemption u/s.11 is
allowed, then the excess of receipts over expenses gets exempted
subject to the stipulated ceilings. In case the exemption is denied,
then it is only the excess of receipts over eligible and deductible
expenses/allowances that can be charged to tax. In the facts and
circumstance of the case, the AO charged to tax the gross receipts
without granting any deduction towards expenses and deductions. I,
therefore, set-aside the impugned order and remit the matter to the file
of AO for deducing the total income in accordance with law after
considering the deductibility of various expenses noted in the Income
and Expenditure account on the touchstone of the relevant provisions.
Needless to say, the assessee will be allowed reasonable opportunity
of hearing.
4 ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita
Both the sides are in agreement that the facts and circumstances
in the appeal for A.Y. 2017-18 are mutatis mutandis similar.
Following the view taken hereinabove for the A.Y. 2016-17, the
impugned order for the A.Y. 2017-18 is also set-aside and the matter
is remitted to the file of the AO for deciding the issue in conformity
with the directions given above.
In the result, both the appeals are partly allowed for statistical
purposes. Order pronounced in the Open Court on 06th November, 2023.
Sd/- (R.S.SYAL) VICE PRESIDENT
पुणे Pune; �दनांक Dated : 06th November, 2023 Satish
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order is forwarded to: 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The Pr.CIT concerned िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, 4. SMC, Pune / DR, ITAT, Pune गाड� फाईल / Guard file 5.
आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
5 ITA Nos.999 & 1000/PUN/2023 The Nagar Vachanalaya Vita
Date 1. Draft dictated on 06-11-2023 Sr.PS 2. Draft placed before author 06-11-2023 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *
