SRI SOWDESWARI MAHAJANA CHARITABLE TRUST,SALEM vs. ADIT,CPC, BANGALORE

The assessee has raised the following grounds of appeal:

2.3 CIT(A) erred in not considering investments made in Fixed Assets during the year as Application. 2.4 CIT(A) failed to use his Appellate powers to decide the Appeal and erred in 4.directing the Appellant to file a revised return of income. 2.5 CIT(A) failed to follow the Citizens's Charter which specifies, providing timely decisions, collecting correct amount of tax and reducing cost of compliance. 2.6 CIT(A) erred in relying on technicalities, while ignoring that that the eventual destination of every litigation is justice. 2.7 CIT(A) having directed the Appellant to file a revised return of income ought to have directed the AO to enable the portal for submission of such revised return or accept manual ROI.

The brief facts of the case are that the assessee is a Trust running Educational Institute in the name of Salem Sri Sowdeswari College. The assessee filed its return of income in Form No.7 for the AY 2019-20 on 21.08.2019 declaring ‘nil’ income by claiming exemption u/s.11 & 12 of the Act. The AO, CPC, Bengaluru, sent a communication with a proposed adjustment u/s.143(1)(a) of the Act, dated 17.02.2020 asking the assessee to provide required information or file revised return of income, to which, no reply was submitted by the assessee. The AO, CPC issued intimation u/s.143(1)(a) of the Act, dated 18.05.2020 and determined total income at Rs.1,94,42,005/- and denied exemption claimed u/s.11 & 12 of the Act, on the ground that the assessee has not filed correct information in ITR Form. The assessee challenged intimation issued u/s.143(1)(a) of the Act, before the First Appellate Authority. The Ld.CIT(A) vide their order dated 22.06.2022 dismissed the appeal filed by the assessee on the ground that the assessee itself had admitted a mistake in filling up Schedule EC Row

The Ld.AR for the assessee submitted that the Ld.CIT(A) erred in rejecting appeal filed by the assessee without appreciating the fact that the AO has computed total income on the basis of wrong assumption of facts only for the reason that the assessee has filled amount in wrong column in the return of income filed for the relevant assessment year. However, not denied the fact that the assessee is entitled for exemption u/s.11 & 12 of the Act.

The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A), submitted that the AO, CPC will compute income as per information furnished by the assessee and thus, there cannot be any fault from the AO in computing income, because, the assessee has provided information in wrong column.

We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. Admittedly, the assessee has filled exemption claimed u/s.11 & 12 of the Act, in Schedule EC Row (3) instead of Schedule EC Row (2). Because of said mistake, the AO, CPC denied exemption claimed u/s.11 & 12 of the Act, and determined total income of the assessee at Rs.1,94,42,005/- as against ‘nil’ income declared by the assessee. The assessee has explained the reasons for filing ITR Form with a wrong info in the Form, as per which, by inadvertent error,

In the result, the appeal filed by the assessee is allowed for statistical purposes.