DCIT EXEMPTIONS, CIRCLE-1, MANGALURU vs. NAVODAYA GRAMA VIKAS CHARITABLE TRUST, MANGALORE

The Ld. DCIT(Exemptions) is aggrieved and has preferred this appeal.

Brief facts of the case show that, assessee is a Public Charitable Trust engaged in providing assistance to the Rural Poor in Self-Help Group Activities. It is registered under section 12AA of the Act. It filed its return of income on 28.09.2018 declaring total income of Rs.NIL after claiming application of funds towards the object of the Trust. The case was selected for scrutiny under CASS and notice under section 143(2) of the Act was issued. The total income of the assessee was assessed by assessment order under section 143(3) of the Act dated 28.01.2021 at a total income of Rs.2,45,99,924/-.

During assessment proceedings, the Ld. AO noted that assessee had been doing activity of advancing loans, providing insurance cover, and thus deriving Navodaya Grama Vikas Charitable Trust profit in the nature of business. Therefore, the Ld. AO held that the assessee is not carrying on any charitable objects and thus he denied the benefit of section 11 of the Act. Further, Ld. AO made several other additions to the total income of the assessee. Assessee preferred appeal before Ld.CIT(A) and he gave partial relied to the assessee.

Against this, the Ld. AO is in appeal. In the grounds of appeal, the Ld. AO has worked the total tax effect of Rs.81,74,241/-. However, Ld. Authorized Representative submitted that it is a low tax effect appeal and in fact the tax impact is only Rs.52,02,541/- and therefore the Ld. AO could not have filed this appeal. To support her case, she has stated that the tax determined as per rectification order passed under section 154 of the Act dated 30.03.2022 shows tax liability of Rs.85,19,487/- and tax determined by the Ld. AO as per order giving effect dated 17.09.2024 shows Rs.31,72,733/-. Therefore,

Ld. Departmental Representative could not dispute the tax working of order under section 154 of the Act as well as the order giving effect order passed on 17.09.2024. This shows that the tax effect involved in this appeal is only Rs.52,02,541/-. Therefore, as per Board Circular 9/2024 dated 17.09.2024 the appeal filed by the Ld. AO cannot be maintainable and hence dismissed.

However, if later it is found that there is an error in the computation of tax, the revenue is given the liberty to file proper application with necessary evidence. Accordingly, appeal of the revenue is dismissed.

In the result, appeal of the revenue is dismissed.