NAYAN CHETNA SHASAN LABDHI SEVA TRUST,SURAT vs. ITO, WARD 2(2)(1), SURAT

ITA 1207/SRT/2025Status: DisposedITAT Surat06 October 2026AY 2020-215 pages
AI SummaryAllowed

What were the facts?

The assessee, Nayan Chetna Shasan Labdhi Seva Trust, a registered charitable trust, filed its return of income for Assessment Year 2020-21 on March 30, 2021, declaring Nil income. The trust received Rs. 15,97,624 and expended Rs. 16,10,944 towards its objects. The return was processed under Section 143(1) by CPC Bangalore, which disallowed the expenditure claim of Rs. 16,10,944, treating the gross income of Rs. 15,97,621 as taxable. This adjustment was made because the return of income and Form 10B were filed after the original due date of February 15, 2021. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal.

What did the Tribunal hold?

The Tribunal held that the assessee's appeal should be allowed. The Tribunal noted that the due date for filing the return of income was extended by CBDT Circular No. 08/2021 dated 30.04.2021 to May 31, 2021. The assessee filed its return on March 30, 2021, and uploaded the audit report (Form 10B) on March 27, 2021, both within the extended period. Therefore, the adjustment made under Section 143(1) indicating 'no form filed' was incorrect. The Tribunal also observed that the assessee is a registered trust under Section 12A and that disallowing the expenditure claim without providing an opportunity for explanation was unjustified. The Assessing Officer's disallowance/adjustment was deemed incorrect, and the CIT(A) had ignored these facts. The case laws cited by the assessee were also found to support its case.

What were the issues?

1. Whether the adjustment made by the CPC under Section 143(1)(a) of the Income Tax Act, 1961, disallowing the deduction of expenses amounting to Rs. 16,10,944, was valid, considering the assessee trust is eligible for deduction under Sections 11/12 of the Act? Assessee's Contention: The assessee argued that the adjustment under Section 143(1)(a) is permissible only based on information in the return or accompanying documents, or for apparent mistakes of law. The assessee claimed it was eligible for deduction under Sections 11/12 and that the adjustment was beyond the scope of Section 143(1)(a). The assessee also contended that the return and Form 10B were filed before the extended due date of May 31, 2021, as per Circular No. 08/2021, and relied on Alidhara Tex Fab Pvt Ltd vs. CPC and Maharaja Agrasen Trust vs. ITO. Revenue's Contention: The revenue contended that furnishing the return of income in terms of Section 139(1) is mandatory under Section 12A(1)(ba), and failure to do so disentitles the assessee from claiming exemption under Section 11.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 12,Section 139,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 06.10.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 14.10.2025 for the Assessment Year (in short “AY”) 2020-21. 2. The assessee has raised the following grounds of appeal:

“1. On the facts and in the circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making prima facie adjustment and making addition by not allowing deduction of ex

The order continues below.

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