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Facts
The assessee, a charitable trust, filed a return of Nil income. The AO assessed total income at Rs. 2,45,99,924/-, disallowing exemption under Section 11 on the grounds that the trust was engaged in business activities. The CIT(A) granted partial relief.
Held
The Tribunal held that the appeal filed by the AO was not maintainable due to low tax effect, citing Board Circular 9/2024. The revenue was granted liberty to file a proper application if errors in tax computation are found.
Key Issues
Whether the appeal filed by the Revenue is maintainable considering the tax effect as per Board Circular 9/2024.
Sections Cited
143(3), 143(2), 12AA, 11, 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCHES “B,”BANGALORE
Before: Shri Prashant Maharishi, Hon’ble & Shri Soundararajan K, Hon’ble
(A.Y.2018-19) DCIT (EXEMPTIONS) vs. Navodaya Grama Vikas Albuquerque House Charitable Trust Pandeshwar, Mangaluru SCDCC Bank Ltd Karnataka – 575001 Head Office Building Kodialbail Mangalore Karnataka - 575003 PAN: AAATN7594E (Applicant) (Respondent) Assessee Represented by: Ms. Sunaina Bhatia, CA Department Represented by: Sri Tamba Mahendra, JCIT Date of Hearing:23.07.2025 Date of Pronouncement 30.07.2025 O R D E R Per Prashant Maharishi, Vice President: 1. Captioned appeal is filed by DCIT (Exemptions), Circle-1, Mangalore for the A.Y. 2018-19 against the Appellate Order passed by the Commissioner of Income Tax (Appeals)-2, Panaji (“the Ld.CIT(A)”) dated 24.06.2024 wherein the appeal filed by the assessee against assessment order passed under section 143(3)
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.
Order pronounced in the open court on 30th July 2025.