SHRAMIK MAHILA MANDAL,MUMBAI vs. LD INCOME TAX OFFICER (EXEMPTIONS) , THANE

Briefly stated facts necessary for adjudication of the issues at hand are: assessee being a charitable trust registered under section 12A of the Income Tax Act, 1961 (for short ‘the Act’) has filed the return of income in time declaring nil income, which was processed under section 143(1) of the Act by the Assessing Officer (AO) [CPC, Bangalore) and thereby made an addition of Rs.10,02,135/- to the total income of the assessee thus raised a demand of Rs.1,92,510/-. Subsequently, assessee filed a rectification application under section 154 of the Act dated 10.12.2020 before the AO who has dismissed the application vide order dated 02.03.2021.

Assessee carried the matter before the Ld. CIT(A) by way of challenging the order passed by the AO under section 154 of the Act who has dismissed the same. Feeling aggrieved assessee has come up before the Tribunal by way of filing present appeal.

Notice was issued to the assessee through RPAD for 20.06.2022 on which date none appeared on behalf of the assessee. Thereafter, next notice was issued for 20.07.2022 on which date one Shri Rohan Dedia put in appearance on behalf of the assessee vide attorney dated 17.06.2022 brought on record and the case was adjourned to 14.11.2022 at the request of Ld. A.R. for the assessee, on which date none appeared on behalf of the assessee nor any

I have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.

Undisputedly return of income was filed by the assessee within time declaring nil income which was processed by AO, CPC Bangalore under section 143(1) of the Act. It is also not in dispute that by declining the exemption alleged to have been claimed by the assessee trust under section 11 of the Act addition was made and demand was raised on account of non filling of audit report in form No.10B for the year under assessment, for which assessee trust moved a rectification application under section 154 of the Act which has also been dismissed by the AO.

From the aforesaid undisputed facts it has come on record that the assessee has failed to file the audit report in form 10B along with return of income, however, during the course of appellate proceedings before the Ld. CIT(A) it is contended by assessee trust that the Trust had spent a sum of Rs.10,42,284/- on the objects of the Trust needs to be verified. The Ld. CIT(A) decided the aforesaid contentions raised by the assessee by returning following findings: “It is only after the submissions of the necessary evidences in this regard that the statement 6f the appellant can be considered. However this is a long drawn process and cannot be considered as a mistake

Assessee also raised contentions before the Ld. CIT(A) that assessee trust is also exempted under section 10(23C)(iiiad) which contention has also not been accepted by the Ld. CIT(A) by observing that this is a fresh alternate claim being made by the assessee and it requires detail examination whether appellant fulfils the conditions for claiming exemption under section 10(23C)(iiiad) of the Act.

Aforesaid finding returned by the Ld. CIT(A), though made while deciding the appeal against the order passed under section 154 of the Act, are not sustainable because when assessee has come up with specific contention that the trust had spent a sum of Rs.10,42,284/- on the object of the trust the same was not examined by the AO during passing of the order under section 154 of the Act, I am of the considered view that when addition has been made on non sustainable grounds by ignoring the contention of the assessee the same is certainly a mistake apparent on record and the issue was required to be decided by verifying the facts pleaded by the assessee. Furthermore, another contention of the assessee that trust is also exempted under section 10(23C)(iiiad) could have been accepted during the proceedings under section 154 of the Act as the same is also a mistake apparent on record and the addition made and demand has been raised on the basis of mechanical process carried out by the AO/CPC Bangalore.

In view of what has been discussed above, I am of the considered view that order passed by the Ld. CIT(A) is not