INCOME TAX OFFICER (EXEMPTION), WARD- KOLHAPUR, KOLHAPUR vs. DAKSHIN BHARAT JAIN SABHA, SANGLI

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ITA 607/PUN/2023Status: DisposedITAT Pune11 September 2023AY 2017-184 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 if exemption is denied, the assessment should be a normal assessment where only total income is taxed, not gross receipts. The CIT(A)'s direction to tax total income was therefore upheld.

What were the facts?

The assessee trust, registered u/s.12A, failed to file Form No.10B on time. The CPC disallowed exemption u/s 11 and taxed gross receipts. The CIT(A) upheld the denial of exemption but directed taxation of total income instead of gross receipts.

What were the issues?

Whether the assessee should be taxed on gross receipts or total income when exemption under Section 11 is denied. Whether the CIT(A) was justified in directing taxation of total income.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH, ‘A’ PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Pramod S. Shingte
For Respondent: Shri Ramnath P. Murkunde

आदेश / ORDER

PER R.S. SYAL, VP :

1.

This appeal by the Revenue is directed against the order dated 23-03-2023 passed by the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi in relation to the assessment year 2017-18.

2.

The only grievance of the Revenue in this appeal is against the direction of the ld. CIT(A) to the Assessing Officer (AO) for taxing only the total income of the assessee as against the gross receipts.

3.

Briefly stated, the facts of the case are that the assessee trust is registered u/s.12A of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). It did not file Form No.10B along with its return of income for the year under consideration. The Centralized Processing Centre (CPC) completed the assessment u/s.143(1), disallowing the claim of exemption u/s 11 of the Act. The assessee, thereafter, filed Form No.10B and moved application for rectification u/s.154 of the Act. The CPC dismissed the application u/s.154. The assessee preferred appeal before the ld. CIT(A), who held that the application filed by the assessee was rightly rejected because in the absence of the uploading Form No.10B on time, it was not entitled to exemption. He, however, directed the AO to tax only the total income of the assessee as against the gross receipts which was subjected to tax. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.

4.

Having heard the rival submissions and gone through the relevant material on record, it is seen that the order of the ld. CIT(A) has attained finality qua the assessee’s grievance inasmuch as there is no appeal anent to the disallowance of claim of exemption u/s.11.

Thus, the only issue which survives in the Revenue’s appeal is about taxing the gross receipts or total income. If the necessary form is filed on time, the assessee, subject to the other provisions, becomes entitled to exemption. In case the exemption is denied, it becomes a case of normal assessment, in which only the total income can be taxed and not the gross receipts. In the instant case, the Department, after rejecting the claim for exemption, charged to tax the gross receipts. The ld. CIT(A), in our considered opinion, was fully justified in directing the AO to tax only the total income of the assessee and not the gross receipts. We, therefore, countenance the same.

5.

In the result, the appeal is dismissed. Order pronounced in the Open Court on 11th September, 2023.

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