ACIT 17(1), MUMBAI vs. NAWAZBHAI RATAN TATA TRUST, MUMBAI

ORDER \nPER NARENDRA KUMAR BILLAIYA, AM:\nThis appeal by the revenue is preferred against the order dated\n07/03/2025 by NFAC, Delhi (hereinafter “the ld. CIT(A)"} pertaining to\nAY 2016-17.\n2. The grievance of the revenue reads as under:-\n“1. Whether on the facts and in the circumstances of the case and in law, the\nLd.CIT(A) was justified in deleting the addition made by the Assessing Officer on\naccount of dividend income ignoring the fact that dividend income was claimed exempt\nu/s 10(34)/10(35) of the Act despite the fact that the assessee's registration u/s 12A\nwas in force during the previous year relevant to A. Y 2016-17 and thus contravene\nthe provisions of section 11(7) of the Act ?\"\n2. \"Whether, on the facts and in the circumstances of the case, the Ld. CIT(A) is erred\nin allowing deduction u/s 80GGA, ignoring the fact that the assessee had not claimed\nsuch deduction in the return of income and the claim was raised for the first time\nduring appellate proceedings. No revised return was filed and hence such a claim is\nnot admissible under the law.\n3. \"Whether, on the facts and in the circumstances of the case, the Ld. CIT(A) is erred\nin directing the AO to allow deduction u/s 80G beyond the statutory limit prescribed\nunder Section 80G(4) of the Act. As per Section 80G(4), the aggregate deduction\ncannot exceed 10% of Gross Total Income, and the restriction made by the AO was in\naccordance with law\"\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 3581/Mum/2025\n2\n4. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A)\nwas justified in deleting the addition made by the Assessing Officer on account of\ndividend income ignoring the fact that mere surrender of registration u/s 12A of the\nAct, suo-moto, does not entitle the assessee to be out of registration u/s 12AA of the\nAct granted in perpetuity, unless it is withdrawn by the competent authority?\"\n5. \"The appellant craves the leave to add, substitute, modify, alter, delete or amend all\nor any ground of appeal

either before or at the time of hearing.\"\n3. Representative of both the sides were heard at length. Case records\ncarefully perused.\n4. Insofar as the issues raised vide Ground No. 1 are concerned, on\nidentical set of facts, the Co-ordinate Bench in &\n2058/Mum/2025; Jamsetji Tata Trust had considered a similar grievance.\nThe facts are mutatis mutandis the same. On finding parity of facts, we\ndraw support from the following observations of the Co-ordinate Bench\n(supra):-\n\"8.\nBefore us, the ld. D/R placed strong reliance on the assessment order and\nthe ld. Counsel for the assessee reiterated what has been stated before the lower\nauthorities and drew our attention to the order of the Co-ordinate Bench in the\ncase of Jamsetji Tata Trust in ITA No. 7239/Mum/2019, wherein the Co-\nordinate Bench drawing support from the decision of the Mumbai Bench in the\ncase of Navajbai Ratan Tata Trust vs. PCIT in ITA No. 7238/Mum/2019,\nwherein the Co-ordinate Bench held as under:-\n\"Our conclusions:\n68. In view of the above discussions, as also bearing in mind the entirety of\nthe case, we are of the considered view that the impugned order of cancellation\nof registration granted to the assessee under section 12A must be held to be\neffective from the date on which the hearing on first show-cause notice was\nconcluded and the show cause notice issued by the Commissioner was\nformally acquiesced by the assessee in the said hearing, i.e., 20' March 2015,\nsince, without disposing of the said matter, the Commissioner, or his\nsuccessors, could not have started other parallel proceedings for cancellation\nof registration obtained under section 12A. The registration having been\n\"obtained\" under section 12A was in the nature of a benefit to the assessee,\nand it was, therefore, entirely at the option of the assessee. In our considered\nview, an assessee unwilling to avail the \"benefit\" of registration \"obtained\"\nunder section 12A cannot be, directly or indirectly and by actions or by\ninactions, compelled by the revenue authorities, to continue with the said\nregistration \"obtained' by the assessee, particularly when it pertained to the\nregistration obtained in a period prior to the insertion of section 12AA. The\npresent cancellation of registration under section 12A must, therefore, be held\nto be effective from 20th March 2015. To this limited extent, we uphold the\nplea of the assessee.\n69.\nWe have noted that many other peripheral issues, with regard to the\nconduct of the assessee trust and compliance with the statutory provisions\nunder section 11 to 13, are raised in the course of the impugned proceedings.\nIn our humble understanding, there is no need to deal with these aspects so\nfar as our adjudication, on the core issue requiring our adjudication in this\nappeal, is concerned. All these issues so raised by the revenue authorities are\nleft open for adjudication at the appropriate stage such as in the assessment,\nor any other related, proceedings, if and so necessary. Our observations\nhereinabove have no bearing, or should be construed as having any bearing,\non these issues.\n70.\nThe admission of additional ground of appeal is also an academic issue\nin the light of the above conclusions arrived by us, and there is no need to deal\nwith that aspect of the matter either. As we have decided this appeal on the\nshort issue about the date from which the impugned order must be held to be\neffective, we refrain from dealing with all other issues, including the\nadditional ground of appeal, at this stage. There are many other facets of\narguments advanced before us and the grievances raised before us. However,\nwe see no need to deal with all these aspects of the matter at this stage.\n6.\nWe see no reasons to take any other view of the matter than the view so taken by\nthe coordinate bench in the case of Navajbai Ratan Tata Trust vs PCIT (Supra). These\nobservations will apply mutatis mutandis in the present case as well. Respectfully\nfollowing the same, we hold that the impugned order cancelling registration granted\nto the assessee trust will have effect from the date on which hearing, on the first show\ncause notice requiring the assessee to show cause as to why registration under section\n12A not be cancelled, and the assessee formally acquiesced to the said notice\n10.03.2015, i.e on 20th March 2015.”\n9. As no distinguishing decision has been brought to our notice,\nrespectfully following the decision of the Co-ordinate Bench (supra), we decline\nto interfere with the findings of the ld. CIT(A).\"\n5. Insofar as Ground Nos.2 & 3 are concerned, while scrutinizing the\nreturn of income, the AO noticed that the assessee has claimed deduction\nu/s 80G at Rs.16,93,07,443/- and u/s 80GGA Rs.29,79,92,156/-. These\ndeductions were claimed in the computation of income by the assessee\nbut in the return of income, the assessee has claimed deduction u/s 80G\nof the Act only for which the assessee furnished necessary proof.\nHowever, as per the provisions of Section 80G(4), the donation made in\nexcess of credits of sums in respect of deduction has to be allowed u/s\n80G of the Act. As mentioned hereinabove, in the computation the\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 3581/Mum/2025\n4\nassessee claimed deduction u/s 80GGA of the Act but in the return of\nincome, only deduction u/s 80G of the Act was claimed. The AO\naccordingly rejected the claim of deduction u/s 80GGA of the Act.\n6. When the matter was agitated before the ld. CIT(A), the ld. CIT(A)\nwas of the opinion that since there is no column in the return in ITR-V\nfor claiming deduction u/s 80GGA of the Act, therefore such deduction\ncould not be claimed by the assessee due to this technical reason and\naccordingly directed the AO to allow the claim subject to his satisfaction\nof other conditions laid down in this regard.\n7.\nWe find that similar difficulty arose and was considered by the Co-\nordinate Bench in the case of RD Tata Trust in ITA No. 4075/Mum/2023.\nThe relevant findings read as under:-\n“09. We have carefully considered the rival contentions and perused the orders of the\nlower authorities. We find that the assessee is a public trust registered under the\nBombay Public Trust Act, 1950, originally registered under Section 12A of the Act\non 10th December, 1990 but subsequently, it surrendered its registration on 26th\nFebruary, 2015, as it did not want to claim any benefit under Section 11 of the Act.\nThe assessee has earned interest income of ₹247,23,301/-. Out of this interest income,\nit claimed deduction of ₹1,42,033/- under 80G of the Act and ₹1,27,02,000/- under\nSection 80GGA of the Act. It was stated that as no separate column was available in\nITR filed for section 80GGA of the Act, the assessee clubbed both this deduction\ntogether and accordingly, restricted the taxable income to ž nil. In Page |

8. RD Tata\nTrust; A.Y. 2017-18 the computation of total income file during the course of\nassessment proceedings, the assessee claimed deduction under Section 80GGA of the\nAct of ₹1,27,02,000/- and also claimed deduction under Section 80G of the Act of\n₹1,42,33,000/-. The deduction under Section 80G of the Act was made by the assessee\nas it donated *1,42,33,000/- to Tata Institute of Social Sciences, Deonar, Bombay\nwhich is approved university or educational Institution by prescribed authority as per\nnotification dated 15th December, 1993. Therefore, the deduction under Section 80G\nof the Act was not restricted to 10% of the gross total income as deduction granted to\nthe specified entities and therefore, 50% of the above amount was allowed. The learned\nCIT (A) has restored the matter back to the file of the learned Assessing Officer to\ngrant deduction to the assessee under Section 80G of the Act to the entities registered\nunder Section 80G(3)(a)(iiif) of the Act after verification. Thus, according to him on\nperusal of Section 80G(4) of the Act, it does not restrict the donation given to such\nentity by restricting it to the 10% of the total income.”\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 3581/Mum/2025\n5\n8. Respectfully following the decision of the Co-ordinate Bench\n(supra), we do not find any error or infirmity in the directions of the ld.\nCIT(A). Ground Nos.2 & 3 are accordingly dismissed.\n9. The issue raised by Ground No. 4 is directly related to the issue\nraised in Ground No.