SUBHASRI CHARITABLE TRUST,AHMEDABAD vs. ITO,WARD EXEMPTION, VADODARA, VADODARA

ITA 717/AHD/2026Status: DisposedITAT Ahmedabad23 October 2026AY 2018-193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged that the assessee did not hold registration under Section 12AA for the relevant assessment year, which justified the denial of exemption under Section 11. However, it held that denying exemption does not automatically mean the entire gross receipts should be taxed without considering the expenditure incurred. The CIT(A) had not examined the expenditure of Rs. 26,90,225/- claimed against total receipts of Rs. 27,00,000/-. Therefore, the matter was restored to the Assessing Officer (AO) with a direction to verify the claimed expenditure and allow it to the extent admissible. The remaining income was to be assessed in the status of an Association of Persons (AOP) applying the applicable tax rates. The AO was directed to provide the assessee with a reasonable opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Subhasri Charitable Trust, filed its return for AY 2018-19 declaring an income of Rs. 9,780/- after claiming application of Rs. 26,90,225/- towards charitable purposes out of total receipts of Rs. 27,00,000/-. The CPC, processing under Section 143(1), disallowed the exemption claim and determined total income at Rs. 27,00,000/-. The CIT(A) upheld this disallowance, stating the trust was granted registration under Section 12AA only from 06.05.2019, making it ineligible for Section 11 exemption for the year in question. The appeal is against the CIT(A)'s order dated 29.01.2024.

What were the issues?

1. Whether, on facts and in circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance of exemption amounting to Rs. 26,90,225/- under Section 11 of the Act. The assessee contended that while registration under Section 12AA was granted later, the denial of exemption should not automatically lead to taxing gross receipts without considering expenditure. The revenue's position, as upheld by the CIT(A), was that the trust was not eligible for Section 11 exemption due to the lack of registration for the relevant assessment year. 2. Whether, on facts and in circumstances of the case and in law, the Ld. CIT(A) erred in confirming the non-application of slab rate of tax, available to an AOP, on the income of the charitable trust. The assessee argued for the application of AOP slab rates. 3. Whether, on facts and in circumstances of the case and in law, the Ld. AO erred in making adjustment under Section 143(1)(a) amounting to Rs. 26,90,225/-. 4. Without prejudice, whether the Ld. CIT(A) erred in confirming the gross receipts as total income and not allowing Rs. 26,90,225/- as business expenditure. The assessee argued for the allowance of expenditure.

Which sections of the Income-tax Act were involved?

Section 11,Section 12AA,Section 143(1)(a),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. B.R.R. KUMAR, VICE-

For Appellant: Shri Divyang Shah, AR
For Respondent: Shri Kalpesh Rupavatia, Sr DR
Hearing: 21.10.2026Pronounced: 23.10.2026
1.

Delay condoned.

2.

This appeal has been filed by the assessee against the order passed by the Addl/JCIT (A)-7, Delhi (hereinafter referred to as "CIT(A)" for short), dated 29.01.2024 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2018-19. 2. The assessee has raised following grounds of appeal:- “Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) has erred in confirming disallowance of exemption amounting to Rs.26,90,225/- u/s 11 of the Act.”

3.

The assessee has also raised following additional grounds:- “1. Wh

The order continues below.

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