SHREE SANT BHOJAJI MAHARAJ DEOSTHAN AJANSARA,WARDHA vs. COMMISSIONER OF INCOME TAX (EXEMPTION), PUNE AT NGP, NAGPUR

At the time of hearing the Ld. AR of assessee filed an application for raising additional grounds and prayed for admit the same, which are as under: “1.The Commissioner of Income Tax (Exemption) Pune at Nagpur erred in considering that the notice issued u/s. 263 were barred by limitation, therefore consequential order passed is non-est and void ab initio. 2. The Commissioner of Income Tax (Exemption), Pune at Nagpur erred in considering that the proceedings initiated and order passed under section 263 has become time barred by limitation and therefore continuation of the same proceedings became non- est and void ab initio, therefore order passed u/s. 263 is illegal, invalid and bad in law”

At the outset, we noticed that there is a delay of 1419 day in filing the present appeal before the Tribunal. The assessee has filed application for condonation of delay, which is supported with the affidavit of President of assessee-society. The counsel for assessee submitted that the order under section 263 dated 17/02/2021 issued during Covid Pandemic period and assessee trust were working with limited staff, the aforesaid order was received by the employee of the assessee trust but the employee Santosh Pratapsingh Gherwar R/o. Ajansara, Warda has left his services without communicated aforesaid order to the president of the assessee trust. Due to mistake of employee of the assessee trust for not communication the aforesaid order the assessee society has not filed appeal against the order passed by Commissioner of ITA 186, 211 & 212/Nag/2025 (A.Y. 2015–16) Shree Sant Bhojaji Maharaj Deosthan Ajansara Income Tax (Exemption), Pune at Nagpur. Later when the assessee trust received order u/s. 250 filed against order 143(4) r.w.s. 263 on 22/02/2025 and as per advice of new counsel, the president of assessee trust enquired regarding the order u/s 263 passed by the Commissioner of Income Tax (Exemption), Pune at Nagpur and immediately filed appeal on 19/03/2025. In support of its contention the assessee society has filed affidavit also. The counsel for the assessee submitted that due to above reason appeal is being filed on 19/03/2025 along with delay application therefore there is delay of 1431 days, which deserves and be condoned. The delay is not intentional or deliberate and may kindly be condoned in the interest of justice. The assessee has good case on merit and is likely to succeed if the case is heard and decided on merits. The ld. Counsel also filed list of various case law in support of his arguments on delay.

On the other hand, the ld. CIT-DR for the revenue argued that there is long delay in filing appeal and the cause of delay is not good cause. The delay may not be condoned.

We have heard counsel for both the parties on delay and perused the material placed on record, and the judgment cited before us on application seeking condonation of delay. Considering the entire factual position as explained before us

The brief facts of the case are that the assessee is a charitable trust, registered under Society Registration Act, 1860 in the office of Charity Commissioner, Wardha. The assessee filed return of income for the A.Y 2015-16 on 31.03.2017 declaring total income at Rs. 56,69,660/- claiming deduction u/s. 11(1)(d) at Rs. 47,08,027/-. The Trust has been established for the remembrances of late Shri Bhojaji Maharaj who devoted his whole life for economically needed peoples, like providing Food, Shelter and Cleanliness atmosphere. The assessee trust maintaining regular books of accounts and the ITA 186, 211 & 212/Nag/2025 (A.Y. 2015–16) Shree Sant Bhojaji Maharaj Deosthan Ajansara same are audited under the provision of Bombay Public Trust Act. The trust has decided to construct the community hall for devotee coming from adjoining are of Vidarbha and worship hence pass resolution in board meeting to construct hall with the help of devotees. In this regard a general notice was placed outside temple for building fund, area development and maintenance fund and also arranged a box at the temple premises naming box collection building fund and pilgrims put their offering for building construction and area development and maintenance specifically. The return was selected for limited scrutiny and scrutiny assessment was completed u/s. 143(3) of the IT Act on 26.12.2017. As the assessee trust was not registered u/s. 12AA, therefore assessment completed as AOP. During the course of assessment proceedings Assessing Officer has verified all the details which was furnished by assessee, against various show cause notices.

Thereafter, the assessment order dated 26.12.2017, was revised by ld. CIT(E) by exercising his power under section 263 of the Act on 17/02/2021. While revising assessment order, the Ld. CIT(E) observed that receipts of voluntary contributions to the tune of Rs. 47,48,027/- are not credited to Income & Expenditure Account, whereas, such receipts are directly credited to Corpus Fund Account and further endorsed to balance sheet. The ld. CIT (E) was of the view that the receipts of Rs. 47,48,027/- ought to have been charged to 6

Aggrieved by the order u/s 263 of the Act the assessee is in appeal before us.

The Ground Nos. 2 To 5 raised by the assessee are interrelated and interconnected and relates to challenging the order of CIT(E) in invoking the provisions u/s 263 of the Act.The Ld. counsel for the assessee strongly objected on the validity of order of CIT(E) and argued that during assessment all the issues have been considered and also verified by the AO and accepted the return income by allowing the claim at Rs. 47,48,027/- and determining total income at Rs. 56,79,096/-. During the course of original assessment proceeding the AO has issued several notices Under section 142(1) and 143(2) from time to time and called the details with respect of claim of the assessee, which is placed on record in Paper Book Page-17 To 18 of the Paper Book. In response to notices assessee has filed reply from time to time before the assessing officer, which is on Page-13 To 16, 19 of the Paper Book. The assessment order is not erroneous being legally sustainable order and not prejudicial to the interest of 7

Bills of building material produced and xerox of some bills are enclose for verification.

Copy of Bank statement produced for verification 6. The cash is deposited in to Bank A/c. from donations, shop rent, utensils rent, agricultural income and other income, which is duly reflected in financial statement which was deposited into Bank of India Wadher from time to time.

The Ld. CIT(E) has issued the show cause notice dated 25/01/2021 without mentioning the reasons for initiating proceedings 263 of the Act. In response to notice assessee has submitted the detailed and explained corpus fund received and expenditure incurred. The Ld. CIT(E) has not accepted the contention of the assessee and treated the receipt of voluntary contribution to the tune of Rs. 47,48,027/- are not credited to Income & Expenditure Account, whereas, directly credited to Corpus Fund Account and further endorsed to balance sheet. In view of the facts the trust is not registered u/s 12AA and assessed as AOP. It is apparent that the receipt of Rs. 47,48,027/- ought to have been charged to tax for A.Y. 2015- 16 under consideration. However, from the balance sheet as on 31.03.2015 only Rs. 4,76,339/- was credited to the 8

The Ld.AR of assessee further argued that voluntary contribution made with a specific direction to form part of the Corpus fund are generally considered as capital receipt and not taxable. Irrespective of the fact that assessee is registered u/s. 12A/12AA or not. The assessee has utilised the entire donation for constructing community hall for devotee and building fund and area development and maintenance fund by making arrangement at the entry point in temple premises a box specifically naming box collection for building fund and area development and maintenance.

The Ld. AR also drawn our attention to the assessment order in which clearly mentioned that (i) The case was selected under CASS and notice u/s. 143(2) was issued to the assessee 18/09/2017 which was duly served on the assessee. After change of incumbent, notice u/s 142(1) was issued to the assessee on 04/12/2017, (ii) In response these notices Shri Abhishek Patni C.A. duly authorized by the assessee and Shri Vasant Bhagwanji Yede Secretary of the trust attended from time to time and made compliances which are placed on record. Books of accounts of the assessee are duly audited as ITA 186, 211 & 212/Nag/2025 (A.Y. 2015–16) Shree Sant Bhojaji Maharaj Deosthan Ajansara required under provisions of Bombay Public Trust Act. (ii) the assessee is a charitable trust and it exists for the remembrance of Shri Bhojaji Maharaj and to arrange food charities for economically needed people, Gross receipt for the year under consideration is Rs. 65,95,200/-. It derives income from Rent, Interest, sale of gains and coconut and pooja donation. Books of account have been test checked vis-à-vis the vouchers, bills and supporting documents produced for examination. The assessee trust is not registered u/s. 12AA of the Income Tax Act, 1961. Hence the assessment was completed as AOP on 26.12.2017. The entire issues are duly verified and test checked by the assessing officer and assessment were completed therefore there is no need of proceedings U/s. 263 in the case of the assessee. In this regard the assessee has placed reliance upon the following judgments:

The Ld. AR further placed reliance upon the following judicial precedents: 1.

The counsel for the assessee placed reliance on following judgments

On the other hand, the ld. CIT-DR for the revenue supported the order of CIT(E). The ld. CIT-DR argued that the assessment order passed by assessing officer is erroneous and prejudicial to the interest of revenue as has been categorically

We have heard the rival arguments, perused the material facts available on record. The assessee- trust filed return of income showing income at Rs. 56,69,664/- by claiming deduction at Rs. 47,48,027/-. On perusal of record, it is clear that during assessment, the assessee filed written submission alongwith supporting evidence in response to notices details called and the assessing officer. From the contents of show cause notice it is clear that assessing officer has verified all the issues during the course of assessment proceedings and passed the assessment order U/s. 143(3) on 26.12.2017 allowing the deduction. It is also settled law that the trust is charitable trust even through eligible to claim deduction without 12A/12AA as corpus donation as capital receipts and not taxable irrespective of the fact that assessee registered under section 12A/12AA of the Act.

We are of the considered opinion that keeping in view the facts and circumstances of this case and in particular, having regard to the fact that the CIT(E) exercising its invoked revisional jurisdiction U/s. 263 only in relation to receipt of voluntary contribution are not credited to Income and Expenditure account the same cannot be subject of the 263 proceedings and the period of limitation provided for under 14

Accordingly, in the backdrop of our aforesaid observation read alongwith the judgment cited by the assessee, we are of the view that it is only in a case where the issues before the CIT(E) at the time of exercising powers under s. 263 of the Act related to the subject-matter of original assessment and the issue were already discussed, the same would not bring the order of assessment within the realm of the jurisdiction of the CIT(E) under s. 263 of the Act. It is also admitted fact that period of limitation for exercising jurisdiction under s. 263 of the Act would invoke from the date of the original assessment order and the proceedings initiate U/s. 263 were barred by limitation.

Even on merits of the case the entire issue has been discussed in the original assessment proceedings and the assessment were completed U/s. 143(3) by accepting the return income, then initiation of 263 proceedings on same issues were bad in law. The following judgments cited by the assessee also supported the case of the assessee:

Thus, in terms of our aforesaid observation, we are of the view that, the CIT(E) had exceeded the jurisdiction vested with him under s. 263 of the Act with respect to the aforesaid issue even in the show cause notice no reason has been mentioned for invoking 263 it fails to mention the specific reasons for proposed revision. Even the order U/s. 263 were passed beyond the time limit prescribed in the section. Accordingly, the revision order passed by the Ld. CIT(E) under s. 263 of the ITA 186, 211 & 212/Nag/2025 (A.Y. 2015–16) Shree Sant Bhojaji Maharaj Deosthan Ajansara Act dated 17/02/2021 being not as per the mandate of law cannot be sustained and is liable to be quashed.

In the result, appeal filed by the assessee is in is allowed in terms of our aforesaid observation.

In the result, all the appeals filed by the assessee are allowed.