BHOOPATI SHIKSHAN SANSTHAN,MUMBAI vs. CIT (A)-1, MUMBAI

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Mumbai [hereinafter referred to as ‘the CIT(A)’] dated 09.05.2019 for Assessment Year (AY) 2014-15.

Ms. Vasanti Patel appearing on behalf of the assessee submitted that the assessee is a charitable trust registered under section 12A of the Income 2 आअसं. 4606/मुं/2019 (िन.व. 2014-15) (A.Y. 2014-15) Tax Act, 1961 (for short ‘the Act’), however, it is not claiming benefit of exemption under section 11 of the Act. The assessee has been filing its return of income in the status of Association of Persons (AOP) for the past several Assessment Years (AYs.). In the impugned AY, the assessee had made donations to Chief Minister’s Relief Fund Rs. 25,00,000/- and Vidya Pratishthan Rs. 1,00,000/-. The aforesaid donations were eligible for deduction under section 80G and 80GGA r.w.s 35AC of the Act, respectively. The assessee claimed deduction of Rs. 23,23,164/- in the return of income in respect of said donations. The return of income was processed by CPC, Bangalore under section 143(1) of the Act. The deduction claimed by the assessee under Chapter-VIA were denied to the assessee without affording any opportunity of hearing. The assessee filed rectification petition under section 154 of the Act. The CPC, Bangalore vide order dated 16.04.2019 rejected assessee’s rectification petition. The ld. Authorized Representative (AR) pointed that a perusal of the order under section 154 would show that in reasons for rectification, it was specifically pointed that though the assessee is a Trust registered under section 12A, however, the assessee has not made any claim of exemption under section 11 of the Act. The assessee had made claim of deduction under Chapter-VIA, while processing return of income, the benefit of deduction under Chapter-VIA were not allowed. Against the rectification order passed under section 154 dated 16.04.2019, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of assessee stating that the rectification sought is debatable in nature and hence, outside the purview of section 154 of the Act. 3. The ld. AR pointed that in immediately preceding AY i.e. AY 2013-14, the assessee had filed return of income in the status of AOP without claiming the 3 आअसं. 4606/मुं/2019 (िन.व. 2014-15) (A.Y. 2014-15) benefit of exemption under section 11 of the Act. The assessee had claimed benefit of deduction under section 80G/35AC of the Act to the tune of Rs. 17,26,581/-, the same was allowed to the assessee by the AO in scrutiny assessment proceedings. The ld. AR referred to the assessment order dated 02.03.2016 for AY 2013-14 at page no. 39 to 59 of the Paper Book. The ld. AR further referred to the assessment made under section 143(1) for AY 2015-16. The ld. AR pointed that even in the subsequent AY i.e. AY 2015-16, the assessee’s claim of deduction under section 80G/80GGA was accepted by CPC. The ld. AR asserted that the rectification sought by the assessee under section 154 of the Act is a mistake apparent from record and is not a debatable issue.

Per contra, Sh. B.K. Bagchi representing the Department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.

Submissions made by rival sides heard, orders of the authorities below examined. The short issue in the present appeal is whether the assessee’s claim of exemption under section 80G/80GGA denied by CPC in 143(1) proceedings is allowable and the denial of same is a mistake apparent on record.

The assessee in its return of income for the impugned AY had claimed deduction under Chapter-VIA i.e. under section 80G/80GGA in respect of certain donations. Though, the assessee is a Trust registered under section 12A of the Act, however, the assessee is filing return of income in the status of AOP and has not claimed the benefit of exemption under section 11 of the Act. This fact is not disputed by the Department. In the impugned AY, the CPC processed assessee’s return of income and issued intimation under section 143(1) denying the benefit of deduction under section 80G/80GGA. The assessee filed