SHREE RADHA MADHAV GAU SEVA CHARITABLE TRUST,BHAVNAGAR vs. THE ADIT, CPC, BENGALURU JURIS. AO- THE ITO(EXEMP), BHAVNAGAR

The grounds of appeal are as under:- “1. On the facts and circumstances of the case as well as law on the subject, the ld. ADDL/JCIT (Appeals)-2, Chandigarh, has erred in confirming the action of learned ADIT, (CPC) in making huge addition by disallowing the amount of Rs. 12,96,800/- claimed as application of income. 2. It is therefore prayed that above addition made by ADIT, (CPC) and confirmed by ld. ADDL/JCIT (Appeals)-2, Chandigarh may please be deleted. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. Total tax effect (see note below) Rs. 2,55,820/-”

The assessee trust is registered u/s. 12AA of the Income Tax Act, 1961 on 19-01-2019. As regards the provisional registration, the assessee trust due to oversight and newly introduced clause u/s. 12A(1)(ac)(i) has made application under sub-clause VI of section 12A(1)(ac) of the Act on 11-08-2021. The trust was granted provisional registration vide order dated 30-09-2021 for assessment year 2022-23 to 2024-25. Since the clause VI pertains to trust certain fresh registration, there was an error and income tax portal did not reflect the availability of exemption u/s. 11 and 12 for the earlier years more particularly for assessment year 2021-22 and demand was raised when the assessee filed return of income citing that exempt was as not available. Since the assessee has not given opportunity of hearing and even the rectification request was not disposed off, the assessee filed appeal before of the CIT(A). The CIT(A) dismissed the appeal of the assessee

The ld. A.R. submitted that there was a delay of 3 days in filing the present appeal, the same is condoned. The ld. A.R. further submitted that the CIT(A) should have taken into account the assessee’s return of income and should have granted the benefit of exemption u/s. 11 and 12 of the Act.

The ld. D.R. relied upon the assessment order and the order of the CIT(A).

Heard both the parties and perused all the relevant material available on record. The CIT(A) in para 5.2.9 had categorically directed the assessee to approach the jurisdictional Pr. Commissioner or Commissioner of Income Tax for condonation of delay in filing application or its re- registration under the correction provisions i.e. section 12A(1)(ac)(i) of the Act. Thus, the error on the part of the assessee and the CIT(A) has rightly directed the assessee to approach the appropriate income tax authority. The CPC has given the details as disallowed assessee’s claim for exemption because the process for assessment year 2021- 22 for the charitable activities as per the registration is not followed by the assessee. Therefore, the assessee is further directed to file the appropriate application for its re- registration under the correct provisions i.e. u/s. 12A(1)(ac)(i) of the Act and after following the procedure, the revenue authorities may grant the exemption as per the Income Tax Act. The appeal of the assessee is partly allowed.

In the result, the appeal of the assessee is partly allowed.