INCOME TAX OFFICER, (EXEMPTIONS), WARD-1, BENGALURU vs. CUTCHI MEMON UNION, BENGALURU

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ITA 1751/BANG/2019Status: DisposedITAT Bangalore21 February 2022AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issue of the donation claim to the Assessing Officer for fresh examination. The Assessing Officer was directed to consider the claim without being influenced by the CIT(A)'s previous decision and to provide the assessee with an adequate opportunity to be heard.

What were the facts?

The assessee, a charitable trust, claimed a deduction for a donation made to another charitable organization. This claim was made for the first time before the CIT(A), as it was not presented to the Assessing Officer. The CIT(A) rejected the claim, stating the assessee's objects did not include making such donations.

What were the issues?

Whether a donation made by a charitable trust to another charitable organization can be considered as utilization of funds for its own objects, and whether such a claim can be considered for the first time before the appellate authority.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI B.R. BASKARAN

For Appellant: Shri Ashok A Kulkarni, A.R
For Respondent: Shri Sankar Ganesh K., D.R
Hearing: 16.02.2022Pronounced: 21.02.2022

Heard together (2 matters)

ITA No.1268/Bang/2019
ITA 1751/Bang/2019

Read from the judgment's own cause title. This page is filed under one of them.

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

These cross appeals are directed against the order dated 28.3.2019 passed by Ld. CIT(A)-14, Bengaluru and they relate to the assessment year 2014-15.

& ITA 1751/Bang/2019 M/s. Cutchi Memon Union, Bengaluru

Page 2 of 4 2. At the time of hearing, both the parties submitted that the tax effect involved in the appeal filed by the revenue is less than the monetary limit of Rs.50 lakhs prescribed by the CBDT in circular no.17/2019 dated 8.8.2019. Accordingly, the revenue is precluded from pursuing this appeal. Accordingly, appeal of the revenue is dismissed in limine.

3.

We shall now take up the appeal filed by the assessee. The assessee is a charitable trust registered u/s 12A of the Income-tax Act,1961 ['the Act' for short]. It filed its return of income for the year under consideration on 24.9.2014 declaring nil income after claiming exemption u/s 11 of the Act. The A.O. completed the assessment determining the taxable surplus of the assessee at Rs.1,10,43,644/-.

4.

The assessee challenged the assessment order by filing appeal before Ld. CIT(A), wherein the assessee put up a new claim for deduction of Rs.2 crores, being the amount donated by it to another charitable organization having similar objects. The Ld. CIT(A) took the view that the objects clause of the assessee society does not contain the object of giving donation to other organization. Accordingly, he took the view that giving donation to other organization cannot be deemed as utilization of funds for the aims and objectives of the assessee. Accordingly, he rejected the claim of the assessee. Aggrieved by the above said decision of Ld. CIT(A), the assessee has filed this appeal before us.

5.

We heard the parties and perused the record. The Ld. D.R. submitted that the assessee did not make this claim before the A.O. and made the claim for the first time before Ld. CIT(A). Accordingly, he prayed that this issue may be restored to the file of AO for & ITA 1751/Bang/2019 M/s. Cutchi Memon Union, Bengaluru

Page 3 of 4 examining it afresh. On the contrary, the Ld. A.R. submitted that the assessee has put up the claim before the Ld. CIT(A) and the first appellate authority has rendered his decision on merits. Accordingly, the Ld. A.R. submitted that the Tribunal can examine this issue. When it was pointed out by the bench that the A.O. did not have an opportunity to examine this issue and further the Ld. CIT(A) has also not obtained any remand report from A.O. and hence in the fitness of things, it should go back to the AO, the Ld. A.R. agreed to the same.

6.

In view of the above, we set aside the order passed by Ld. CIT(A) on this issue and restore the same to the file of the A.O. for examining it afresh. We also make it clear that the A.O. should examine the issue without being influenced by the decision rendered by Ld. CIT(A) on this issue. After affording adequate opportunity of being heard to the assessee, the A.O. may take appropriate decision in accordance with law.

7.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes and the appeal of the revenue is dismissed. Order pronounced in the open court on 21st Feb, 2022.

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