RISHI PUBLIC WELFARE TRUST,DELHI vs. ITO WARD EXEMPTION, DELHI

The assessee is a trust registration u/s.12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The notice u/s.148 of the Act was issued to the assessee on 23.02.2024. In response to the said notice, the assessee filed return of income on 16.03.2024. The Assessing Officer (AO) made addition of Rs.16,21,380/- on account of interest income received by the assessee as the assessee had violated the conditions mandated u/s.12A(1)(b) and 12A(1)(ba) of the Act for availing the benefit of sections 11 and 12 of the Act. Aggrieved by the assessment order dated 31.01.2025 passed u/s.147 r.w.s. 144D of the Act, the assessee filed appeal before the CIT(A), inter alia, assailing disallowance of exemption of Rs.16,21,380/- on merits. The CIT(A) vide impugned order upheld findings of the AO to the extent that since the assessee has

Shri Vinod Kumar Garg, appearing on behalf of the assessee submits that the assessee is carrying out charitable activities. Admittedly, no return of income was filed by the assessee for the impugned assessment year. However, in response to notice u/s.148 of the Act, the assessee filed return of income and also Audit Report. The benefit u/s.12A of the Act has been denied to the assessee merely for the reason that the return of income and audit report was not filed withtin the due date. In so far as, charitable activities carried out by the assessee, they are not disputed. The ld. AR submits that the benefit of exemption u/s.12A of the Act cannot be denied to the assessee for the reason that the audit report has not been filed within the due date u/s.139(4A) of the Act. The ld. AR submitted that in AY 2019-20 under similar set of facts, the AO accepted the return of income and audit report and allowed the benefit of exemption u/s.12A of the Act. He placed on record copy of the assessment order dated 14.03.2024 passed u/s.147 r.w.s. 144D of the Act for AY 2019-20 at page 50 to 63 of the paper book. He further asserted that the issue is squarely covered by the decision of Hon’ble Gujarat High Court in the case of CIT(E) vs. Anjana Foundation, decided on 09.10.2024 reported as 168 taxmann.com 462.

Per contra, Shri Manoj Kumar, representing the department vehemently defending the impugned order prayed for dismissing appeal of the assessee. The ld. DR submits that the assessee is a non-filer. The assessee filed return of income only after issuance of notice u/s. 148 of the Act. The assessee is eligible to claim deduction u/s.12A of the Act only if the return of income and the audit report is filed by the assessee before the due date as specified u/s/ 139(4A) of the Act. The AO and the CIT(A) have rightly denied benefit of exemption to the assessee for violation of provision of sections 12A(1)(b) and 12A(1)(ba) of the Act.

Both sides heard, orders of the lower authorities examined. Undisputedly, no return of income was filed by the assessee under the provisions of section 139(1) of the Act. The assessee filed return of income only in response to the notice u/s.148 of the Act dated 16.03.2024. The provision of section 12A(1)(ba) of the Act mandates that to claim benefit of sections 11 and 12 of the Act, the return of income should be furnished in accordance with the provisions of section 139(4A) of the Act within the time allowed u/s.139(1) or (4) of the Act. It is an accepted fact that the charitable activities carried out by the assessee during the relevant period are not in dispute. The benefit of sections 11 and 12 of the Act have been denied to the assessee for the

The impugned order is set aside and the AO is directed to take on record audit report filed by the assessee and, thereafter, frame assessment, in accordance with law.

In the result, appeal of the assessee is allowed in the terms aforesaid.