INCOME-TAX OFFICER (EXEMPTIONS), PUNE vs. POONA PANJARPOLE TRUST, PUNE

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ITA 846/PUN/2022Status: DisposedITAT Pune06 October 2023AY 2015-164 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that investments made in fixed deposits out of sale proceeds of capital assets are considered utilization of net consideration for acquisition of another capital asset under Section 11(1A). Therefore, when the entire income was applied for charitable purposes, filing of Form 10B was not necessary.

What were the facts?

The assessee, a public trust, filed its return of income showing Nil income after claiming exemption under Section 11. The processing of the return resulted in a higher total income as exemption was denied due to non-filing of Form 10B. The trust argued that Form 10B was not required as income was not accumulated.

What were the issues?

Whether Form 10B is mandatory for claiming exemption under Section 11 when the income is utilized for charitable purposes and not accumulated. Whether investments in fixed deposits from sale proceeds of capital assets constitute application of income for charitable purposes.

Which sections of the Income-tax Act were involved?

Section 11,Section 11(1A),Section 80G,Section 12A,Section 154

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI

For Appellant: Shri Suhas Bora
For Respondent: Shri M. G. Jasnani, Shri Suhas Bora
Hearing: 06.09.2023Pronounced: 06.10.2023

ORDER

PER INTURI RAMA RAO, AM:

1.

This is an appeal filed by the Revenue directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 27.09.2022 for the assessment year 2015-16.

2.

Briefly, the facts of the case are that the assessee is public trust registered under the Bombay Public Trust Act, 1950. It is formed for the purpose of rendering the charitable activities by running a Goshala. The assessee trust is also registered u/s 12A of the Income Tax Act, 1961 (‘the Act’) and granted approval u/s 80G of the Act. The Return of Income for the assessment year 2015-16 was filed on 04.09.2015 disclosing Rs.Nil income after claiming exemption u/s 11 of the Act. The said return of income was processed u/s 143(1) vide Intimation dated 24.02.2017 at total income of Rs.4,50,00,000/-. On receipt of the intimation, a rectification petition u/s 154 was filed on 08.03.2017 stating that the intimation was issued without granting exemption u/s 11 of the Act. The said petition u/s 154 came to be rejected vide order dated 28.06.2021 on the ground that the assessee trust had not filed Form No.10B. 3. Being aggrieved, an appeal was filed before the NFAC, who vide impugned order held that there is requirement of filing Form No.10B in order to apply surplus income for subsequent application. The NFAC further held that the investments made in the acquisition of the assets made by the assessee trust in fixed deposits amounts to application of income and, therefore, the question of filing Form No.10B does not arise. 4. Being aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us in the present appeal. 5. The ld. Sr. DR contends that the assessee trust had not sought the exemption u/s 11(1A) in respect of the sale proceeds of the capital assets in the return of income. Therefore, the NFAC erred in holding that the investments in fixed deposits amounts to application of income. He further contended that the NFAC ought

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