NATIONAL ACADEMY OF RUDSETI,BANGALORE vs. ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE-1,(EXEMPTIONS) , BENGALURU

The brief facts of the case are that the assessee is a charitable trust registered u/s. 12AA of the Act. The assessee filed their return of income on 09/10/2018 along with the form 10. The assessee in the Schedule 1 to the

As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had not accepted the claim of the assessee and dismissed the appeal filed by the assessee.

As against the said order, the assessee is in appeal before this Tribunal.

At the time of hearing, the Ld.AR submitted that the assessee had claimed for the accumulation of the corpus donation of Rs. 1,44,00,000/- in the return of income and in the audit report filed in form 10B but mistakenly not mentioned the said details in the original form 10 filed on 09/10/2018 and therefore a revised form 10 was filed in which the mistake has been corrected and therefore the addition made by the AO is not correct. The Ld.AR further submitted that the assessee had all the details of the donors and also the donations were received through banks and therefore the addition made by the AO is not correct. The Ld.AR further submitted that the AO had failed to note that the original form 10 was filed in time and the mistake crept in the said form 10 was rectified and a revised form 10 was filed by the assessee before passing the assessment order and therefore the disallowance and the addition made by the AO is not in order. The Ld.AR further submitted that the corpus donations were received for capital

The Ld.AR further submitted that the addition by treating the donations as anonymous donation and not accounted by the assessee is also not correct since the income over expenditure for the period ended 31/03/2018 and 31/03/2017 was capitalized. The Ld.AR further submitted that the grant was given by the Ministry of Rural Development, Government of India and treated the unspent grants as their own money at the end of the year and the said amounts were treated as the grants granted in the next year. Therefore the said unspent grant even though shown as capital fund in the balance sheet, it belongs to the Ministry of Rural Development and therefore the same was not shown in the return of income. The Ld.AR therefore submitted that the additions made by the AO and confirmed by the Ld.CIT(A) has to be deleted.

The Ld.DR submitted that the assessee had filed form 10 along with the return of income in which the said accumulation was not mentioned and therefore the AO had rightly made the addition. Similarly, the excess income over the expenditure even though it belongs to the Ministry of Rural Development, the assessee had not mentioned about the same in the return of income and therefore the said amount has been added as anonymous donation u/s. 115BBC of the Act.

We have heard the arguments of both sides and perused the materials available on record.

In this appeal, the first dispute involved is that the addition made by the AO on the accumulation of income which was not mentioned in the form 10 filed along with the return. We have considered the materials placed by the assessee from which all the documents such as return of income and audit report exhibits that the accumulation of amount by the assessee. But unfortunately, while filing the form 10, the said amount was inadvertently

We accept that it is an inadvertent mistake since the return of income as well as the audit report clearly mentioned about the accumulation of the said income. The assessee also voluntarily found out the said mistake and filed a revised form 10. When such being the case, the AO is not justified in making the said addition by disallowing the accumulation u/s. 11(2) of the Act. The assessee had not filed the rectified return of income and the audit report and therefore in the basic records, the accumulation was very much available and only in the statement in form 10, the mistake has been committed by the assessee which was rectified suomoto by filing a revised form 10. In such circumstances, we are not accepting the findings of the Ld.CIT(A) as well as the AO and allow the appeal filed by the assessee insofar as this issue is concerned.

The second dispute involved in this appeal is about the addition made u/s. 115BBC of the Act by treating the said amount as anonymous donation and not accounted for by the assessee. The case of the assessee is that it is the excess income over the expenditure for the period ended 31/03/2018 and 31/03/2017 which has been capitalized. It is also the case of the assessee that the said unspent grant along with the interest kept by the assessee in their bank account does not belongs to the assessee and therefore the said amount was not shown in the return of income filed by the assessee. We have considered the said fact and also the fact that the excess income of Rs. 55,06,509/- is the excess income for the year ending 31/03/2018 and 31/03/2017 and after deducting 5%, the donation comes out Rs. 52,31,184/- for which all the details were available with the assessee. It seems from the assessment order, no proper explanation was given by the assessee about the said excess income and therefore the AO had added the said amount as anonymous donation u/s. 115BBC of the Act. Before us, it was submitted that it could not be termed as anonymous

In the result, the appeal filed by the assessee is partly allowed.