FAITH ACTION FOR COMMUNITY TRANSFORMATION FACT, MACHILIPATNAM vs. INCOME TAX OFFICER, EXEMPTIONS, RAJAHMUNDRY

The Learned Authorised Representative, Shri K. Siva Rama Rao, CA [hereinafter in short “Ld.AR”] submits that the assessee is not interested to prosecute the claim of section 11 of Income Tax Act, 1961 [hereinafter in short “the Act”] and prayed to consider the alternative plea in remanding the matter to the file of A.O for his fresh consideration to tax the net income but not the gross receipts. Accordingly, having no objection from Ld. DR we proceed to consider the alternative arguments ignoring the grounds raised in Form No. 36.

At the outset, we note that the assessee is a Registered Public Charitable Trust and filed its return of income vide acknowledgment No.963547660260216 on 26.02.2016 claiming exemption under section 11 of the Act. The Centralized Processing Center, Bangalore [hereinafter in short “CPC”] denied the said exemption for non-filing of Audit Report in Form No.10B vide intimation under section 143(1) of the Act dated 14.03.2016. The assessee filed application under section 154 of the Act seeking rectification to allow exemption under section 11 of the Act. The Jurisdictional Assessing Officer [hereinafter in short “JAO”] rejected the said rectification application and confirmed the disallowance made therein for non-filing of Audit Report in Form No. 10B along with the return of income. The assessee challenged the same before the CIT(A), vide his reasoning the CIT(A) confirmed the disallowance made by the CPC by holding the order

Having considered the facts and circumstances of the case, we note that admittedly Form No. 10B was not filed along with return of income and since the Ld.AR stated that the assessee is not interested in pursuing the claim under section 11 of the Act, we are of the considered opinion that the A.O shall examine the case of the assessee to bring the net income to tax. It is a settled principle that the gross receipt cannot be brought to tax only the net income should be taxed by giving benefit to the expenditure. Thus, considering the facts and circumstances of the case and submissions of Ld.AR & Ld. DR, we deem it proper to remit the matter to the file of the A.O for fresh consideration. The assessee is at liberty to file evidences, if any, in support of its claim. Therefore, grounds raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes.

The Ld.AR submits that the alternative arguments as made in A.Y.2014-15 may be considered in remanding the matter to the file of A.O. We note that the issue of alternative argument is similar as in the A.Y. 2014-15 in ITA No. 703/VIZ/2025. Since we have taken a view in remanding the matter

In the result, appeal of the assessee is allowed for statistical purposes.

To sum-up, both the appeals of the assessee are allowed for statistical purposes.