M/S. JOSHUA EDUCATIONAL TRUST,,CHENNAI vs. ITO (EXEMPTIONS), WARD-3,, CHENNAI
आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई
IN THE INCOME TAX APPELLATE TRIBUNAL,
‘A’ BENCH, CHENNAI
ŵी एबी टी वकŎ, Ɋाियक सद˟ एवं ŵी एस. आर. रघुनाथा, लेखा सद˟ के समƗ
BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.: 764/Chny/2020
िनधाŊरण वषŊ / Assessment Year: 2012-13
M/s.Joshua Educational Trust,
2/1, TVS Main Road,
Tevar Nagar, Padi,
Chennai – 600 050. vs.
Income Tax Officer (Exemptions),
Ward -3,
Chennai – 600 034. [PAN: AAATJ-0282-D]
(अपीलाथŎ/Appellant)
(ŮȑथŎ/Respondent)
अपीलाथŎ की ओर से/Appellant by : Shri. K. Meenakshi Sundaram, ITP
ŮȑथŎ की ओर से/Respondent by : Shri. Keerthi Narayanan, JCIT
सुनवाई की तारीख/Date of Hearing
: 21.04.2025
घोषणा की तारीख/Date of Pronouncement
: 15.05.2025
आदेश /O R D E R
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals)-17, Chennai, for the assessment year
2012-13, dated 31.01.2020. 2. The grounds of appeal raised by the assessee are as under:
“1. The learned Commissioner of Income tax (Appeals) erred in stating that the sales proceeds of school at Anna Nagar had not been used for acquisition of another capital asset as mentioned in section 11 (1A).
2. The learned Commissioner of Income tax (Appeals) ought to have appreciated the fact that the Trust never claimed any exemption of the investment in the school land and building at Anna Nagar, Chennai as application of income under Section 11. 3. The learned Commissioner of Income Tax (Appeals) ought to have appreciated the fact that wherever an assessee irrespective of the status
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ITA. No: 764/Chny/2020
claims an allowance of depreciation may have to follow the block of assets principle and cannot adopt a different procedure.
4. The learned Commissioner of Income Tax (Appeals) ought to have appreciated the fact that improvements made in the existing fixed assets tantamounted to purchase of new immovable properties as mentioned in section 11 (A) of the Income Tax Act.
5. The learned Commissioner of Income tax (Appeals) ought to have appreciated the fact that the investment in the immovable property at Anna
Nagar Chennai was never claimed as application of income in the past for its admission as income in the profit and loss account when it was sold in the year ended 31/3/2012. 6. The learned Commissioner (Appeals) ought to have appreciated the fact that the income of a Trust is usually computed under chapter III of the Income Tax Act and the income from business had been computed under Chapter IV of the Income Tax Act.
7. The learned Commissioner (Appeals) ought to have appreciated the fact that the assessee computed their income only under chapter IV and since according to chapter IV depreciation has to be allowed on fixed assets on block of assets basis the sale value of the building at Thangam Colony was reflected in the depreciation schedule.
8. The assessee craves leave to file additional grounds and or additional evidences as the hearing progresses in case a need arises for the same.
9. The assessee under the circumstances submits that the addition of Rs.3,28,37,840/- may be deleted by the honorable Tribunal and rescue the Trust from ruination.”
The brief facts of the case are that the assessee a registered charitable trust u/s.12AA of the Act, filed its return of income for the A.Y. 2012-13 on 20.05.2013 admitting NIL income. The case was selected for scrutiny and statutory notices were sent by the AO. The assessee did not participate in assessment proceedings and hence the AO passed an order U/s.143(3) r.w.s. 144 of the Act dated 30.03.2015 by determining taxable income of Rs.3,28,37,840/- by disallowing exemption claimed u/s.11 of Act due to non- submission of registration u/s.12AA of the Act. Aggrieved by the order of the AO the assessee preferred an appeal before ld.CIT(A) – 17, Chennai. Meanwhile the assessee filed an application u/s.154 before the AO seeking rectification for allowing deduction u/s.11 of the Act by furnishing the :-3-: ITA. No: 764/Chny/2020
registration certificate u/s.12AA of the Act. The AO allowed the exemption u/s.11 of the Act in the order passed u/s.154 of the Act. However, the AO recomputed the taxable income as Rs.2,72,51,272/- since, assessee had failed to make an application of 85% of the gross collection of Rs.3.72 Crores
(including the sale of immovable property of Rs.3.21 crores) along with deprecation claimed by the assessee.
The Ld.CIT(A) after considering the submissions of the assessee along with the order passed u/s.154 of the Act, confirmed the disallowance made by the AO on account additions shown in the ‘fixed assets on the existing land and building’ as application of gross collection sale of immovable property as observed in para 6.3.3. of the order dated 31.03.2020. However, the ld.CIT(A) allowed the depreciation claimed on fixed assets as application of income and directed the AO to recompute the income accordingly. Aggrieved by the order of the ld.CIT(A), the assessee is before us.
We have heard the rival contentions gone through the materials available on record and perused the orders of the authorities. It is an undisputed fact that the assessee has received sale consideration of Rs.3,21,44,631/- from the transfer of Thangam colony property during the impugned assessment year. Further, the AO has passed an exparte order without verification of the reinvestment of the property on the school building at Padi as claimed by the assessee. Further, we have observed that the ld.CIT(A) also has not verified the same before confirming the addition made by the AO. We note that the assessee is seeking for one more opportunity before the AO to present the entire evidence and related documents in respect of the :-4-: ITA. No: 764/Chny/2020
reinvestment made in the interest of natural justice. The ld.CIT-DR also fairly agreed for remanding the issue back to the files of the AO.
In the present facts and circumstances of the case, to meet the ends of the justice we set aside the order of the ld.CIT(A) and remit the issue back to the files of AO for denovo assessment to frame the order in accordance to law, after providing reasonable opportunity to the assessee. Before us, the ld.AR filed an undertaking dated 21.04.2025 to appear before the Assessing Officer on behalf of the assessee without fail when the case is taken up for hearing. Needless to say, that the assessee to be diligent in presenting the details and documents before the AO as and when called for to complete the assessment.
In the result the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 15th May, 2025 at Chennai. (एबी टी वकŎ )
(ABY T VARKEY)
Ɋाियक सद˟/Judicial Member (एस. आर. रघुनाथा)
(S. R. RAGHUNATHA)
लेखासद˟/Accountant Member
चेɄई/Chennai,
िदनांक/Dated, the 15th May, 2025
sp
आदेश की Ůितिलिप अŤेिषत/Copy to:
1. अपीलाथŎ/Appellant
2. ŮȑथŎ/Respondent
3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem
4. िवभागीय Ůितिनिध/DR
5. गाडŊ फाईल/GF