ARUMIGU SWAMINATHA SWAMI THIRUKKOVIL,THANJAVUR vs. ITO, EXEMPTIONS WARD, TRICHY, TRICHY

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ITA 1746/CHNY/2026Status: DisposedITAT Chennai26 October 2026AY 2024-254 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the intimation issued under Section 143(1) of the Act merged with the subsequent assessment order passed under Section 143(3) read with Section 144B of the Act dated February 27, 2026. In this scrutiny assessment order, the Assessing Officer accepted the returned income of the assessee without any disallowance or addition, thereby allowing the exemption claimed under Section 10(23C)(v) of the Act. Consequently, the assessee had no grievance left as its total income was assessed at NIL with no tax liability. Therefore, the present appeal filed by the assessee was dismissed as infructuous. The grounds raised by the assessee were also dismissed as they became infructuous in light of the scrutiny assessment order.

What were the facts?

The assessee, Arumigu Swaminatha Swami Thirukkovil, filed its return of income for Assessment Year 2024-25 declaring NIL total income. The return was processed under Section 143(1) of the Income Tax Act, 1961, vide an intimation dated January 29, 2025. During this processing, the exemption claimed under Section 10(23C)(v) of the Act, amounting to Rs. 1,51,88,364/-, was disallowed, leading to a tax liability. The assessee appealed this intimation to the Additional/Joint CIT (Appeals)-1, Delhi, who dismissed the appeal. The assessee then filed the present appeal before the ITAT. However, during the pendency of the appeal, the case was selected for scrutiny under CASS, and an assessment order under Section 143(3) read with Section 144B was passed on February 27, 2026, accepting the returned income of NIL without any disallowance or addition.

What were the issues?

1. Whether the disallowance of exemption under Section 10(23C)(v) of the Act amounting to Rs. 1,51,88,364/- in the intimation under Section 143(1) was justified, and whether the subsequent appellate order sustaining this addition was correct? The assessee argued that the adjustment made was outside the scope of Section 143(1), the presumption of non-availability of exemption was unjustified, and the non-filing of the audit report in Form No. 10B within the stipulated time did not automatically result in taxation. The assessee contended that the conditions for filing Form 10B were directory, not mandatory, and any delay was not willful. Furthermore, the assessee argued that the Form 10B was made available to the CPC, Bengaluru, and the condonation petition filed under Section 119(2)(b) was misunderstood. The assessee also raised issues regarding the violation of principles of natural justice and the adherence to the faceless regime. The revenue's contentions are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 10(23C)(v),Section 143(1),Section 143(3),Section 144B,Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & HONOURABLE SHRI GAGAN GOYAL

Hearing: 10.09.2026Pronounced: 26.10.2026

आयकर अपीलीय अधिकरण ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI माननीय श्री एबी टी. वर्की, न्याययक सदस्य एवं माननीय श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND HONOURABLE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1746/Chny/2026 ननिाारण वर्ा /Assessment Years: 2024-25 Arumigu Swaminatha Swami v. Income Tax Officer, Thirukkovil Exemption Ward, Thirumanjana Veedhi, Swamimalai, Trichy. Thanjavur, Tamil Nadu-612 302. [PAN: AAATA6446J] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. S. Sridhar, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Ms. N. Abhinaya, JCIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 10.09.2026 घोषणाकीतारीख /Date of Pronouncement : 26.10.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Addl. / JCIT (A)-1, (hereinafter referred as the ‘Ld. Addl. / JCIT (A)-1’), Delhi dated 18.03.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2024-25.

GROUDS OF APPEAL 1. The order of the ADDL/JCIT (A)-1 Delhi dated 18.03.2026 vide DIN & Order No. ITBA/APL/S/250/2025-26/1087546733(1) for the assessment year under consideration is contrary to law, facts and in the circumstances of the case. 2. The ADDL/ICIT (A)-1 Delhi erred in sustaining the addition of Rs.1,51,88,364/- being the excess of income over expenditure, in consequence to rejection of claim of tax exemption in terms of Section 10(23C) (v) of the Act, as income of the appellant in the computation of taxable total income without assigning proper reasons and justification.

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ITA No.1746/Chny/2026 Arumigu Swaminatha Swami Thirukkovil 3. The ADDL/JCIT (A)-1 Delhi failed to appreciate that the disputed adjustment made was outside the purview of the scope of adjustment contemplated in Section 143(1) of the Act, there by vitiating the impugned adjustment made in the intimation order dated 29.01.2025. 4. The ADDL/JCIT (A)-1 Delhi failed to appreciate that the presumption of non-availability of tax exemption benefit in terms of Section 10(23C) (v) of the Act was wholly unjustified and hence ought to have appreciated that the assessment of gross income should be considered as nullity in law. 5. The ADDL/JCIT (A)-1 Delhi failed to appreciate that the mere non filing of audit report in Form No. 10B within the stipulated time could not automatically result in taxation of the disputed differential receipts, there by vitiating the passing of the impugned order. 6. The ADDL/ICIT (A)-1 Delhi failed to appreciate that the conditions prescribed in relation to filing of tax audit report in Form No. 10B were only directory and not mandatory and further ought to have appreciated that the presumed delay in filing the said Form was neither willful nor deliberate but due to reasons beyond the control of the appellant, there by vitiating the impugned order passed in its entirety. 7. The ADDL/JCIT (A)-1 Delhi failed to appreciate that in any event, the Form No. 10B dated 09.11.2024 was made available to the CPC, Bengaluru during the processing of the return of income filed, the action in disallowing the claim of tax exemption computation under Section 10(23C) (v) of the Act, which claim is otherwise eligible was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 8. The ADDL/JCIT (A)-1 Delhi failed to appreciate that the condonation petition filed in terms of Section 119(2)(b) of the Act was in the nature of seeking condonation of delay in filing the Form No. 10B for the assessment year under consideration and further ought to have appreciated that the incorrect understanding of the fact of the same being a petition seeking condonation of delay in filing Form No. 10 would vitiate the impugned order passed on gross non application of mind/complete mis-direction. 9. The ADDL/JCIT (A)-1 Delhi failed to appreciate that the entire computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 10. The ADDL/ICIT (A)-1 Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential appellate order passed should be reckoned as bad in law. 11. The ADDL/JCIT (A)-1 Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 12. The Appellant craves leave to file additional grounds/arguments at the time of hearing.

2.

The brief facts of the case are that the assessee trust filed its return of income on 09.11.2024 declaring total income at Rs. NIL. Return of the assessee was processed u/s. 143(1) of the Act vide intimation dated: 29.01.2025 and exemption

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ITA No.1746/Chny/2026 Arumigu Swaminatha Swami Thirukkovil claimed u/s. 10(23C) (v) of the Act is disallowed amounting to Rs. 1,51,88,364/-, resulting into a tax liability of Rs. 56,62,200/- (after set-off of Rs. 2,88,871/- towards taxes already paid). The assessee being aggrieved with this intimation passed u/s. 143(1) of the Act preferred an appeal before the Ld. Addl./JCIT (A)-1 Delhi, who in turn dismissed the appeal of the assessee. The assessee being further aggrieved with the same preferred the present appeal before us.

3.

We have gone through the intimation passed u/s. 143(1) of the Act, order of the Ld. Addl./JCIT (A)-1 Delhi and submissions of the assessee alongwith the grounds taken before us. It is observed that after processing u/s. 143(1) of the Act vide intimation dated: 29.01.2025 and filing of appeal before the Ld. Addl./JCIT (A)-1 Delhi vide dated: 21.05.2025, the case of the assessee was selected for scrutiny under CASS vide notice u/s. 143(2) of the Act, dated: 23.06.2025 and notice u/s. 142(1) of the Act vide dated: 30.07.2025. The case of the assessee was assessed u/s. 143(3) r.w.s. 144B of the Act vide order dated: 27.02.2026 by accepting returned income filed by the assessee without any disallowance/addition.

4.

The relevant extracts of the assessment order are reproduced herein below: -

“… During the course of assessment proceedings, the assessee has furnished return of income, audited financials, ledgers, trust deed, approval for order of registration u/s. 12A of the Act, Payment of salary details and PAN of all the specified persons, activities of the trust and written submission. In view of the above, the benefit of tax exemption u/s. 10 (23C) (v) of the Act is allowed to the assessee. After verifying the assessee’s submissions and taking into account all relevant materials on records and information gathered, the income of the assessee for the year is assessed u/s. 143(3) r.w.s. 144B of the I.T. Act, 1961, at total income declared in the return of income for the year under consideration, with no adverse inference drawn in this case for the A.Y. 2024-25. Final, Computation of Taxable Income: In view of the foregoing, the total income of the assessee is determined as under: -

Description Amount (in INR) Total income as per ITR Nil Income as computed u/s. 143(1) of the Act. Nil Variation Nil Assessed income Nil

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ITA No.1746/Chny/2026 Arumigu Swaminatha Swami Thirukkovil 5. In view of the above facts, the intimation issued u/s. 143(1) of the Act get merged with the order passed u/s. 143(3) r.w.s. 144B of the Act vide order dated: 27.02.2026 by accepting returned income filed by the assessee without any disallowance/addition as discussed (supra). Hence the present appeal of the assessee is dismissed as the same is found to be infructuous, as no grievance to the assessee is there after NIL tax liability and acceptance of the assessee’s claim in the scrutiny order itself. Resultantly, the grounds raised by the assessee are dismissed as the same became infructuous in view of the scrutiny order mentioned (supra).

6.

In the result, the appeal of the assessee is dismissed in above terms. Order pronounced on the 26th day of October 2026 in Chennai.

Sd/- Sd/- (एबी टी. वर्की) (गगन गोयल) (ABY T. VARKEY) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 26th October 2026. KB आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR 5. गार्ड फाईल/GF Digitally signed K BABU by K BABU Date: 2026.10.29 10:14:12 +05'30'

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