DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), COIMBATORE vs. THE KUNNATHUR KONGU VELLALAR TRUST, ERODE

“Whether Ld. CIT(A) is justified in allowing the expenditure claimed when the assessee failed to comply with the statutory time- limits in filing the Return of Income and Audit Report within the due date which is a mandatory requirement for claiming the exemption u/s 11/12 of the Act and there is no order received by the assessee from prescribed authority condoning the delay in filing return of income and audit report.

Any other reason that may be adduced at the time of hearing.”

The assessee is a trust and running a Metric Higher Secondary School. The A.O has reopened the assessment for the reason that the assessee has cash deposits of Rs. 1,52,28,700/- in Indian Overseas Bank . In response to notice u/s. 148 of the Act, the assessee has filed return of income showing total income of Rs. 2,51,200/-. The A.O in the order passed u/s. 147 of the Act has accepted the assessee’s explanation of cash deposit and recorded that no addition is made and assessed income accordingly. However, in the computation sheet he has computed tax on income of Rs. 2,05,90,503/-. On appeal, the Ld. CIT(A) deleted the addition holding that if no addition has been made in the assessment order and income has been assessed at Rs Nil, the computation cannot be made at income different from income assessed.

Ld DR argued that assessee has not filled return within date, so benefit of allowing capital expenditure as application cannot be granted, therefore A. O has computed tax on gross receipt.

We have heard the rival submissions, and perused the materials available on record. We find that the A.O has reopened the assessment for the reason that the assessee had cash deposits of Rs.1,52,28,700/- in its bank account. However, in the assessment order, the explanation provided by the assessee was accepted, and no addition was made. The Ld. CIT(A) has accordingly held that when no addition has been made in the assessment order and the income has been assessed at Nil, the computation cannot be made at income different from income assessed. We note that assessing officer has not made any addition in the assessment order passed u/s 147 of the Act and has accepted assessee’s explanation for which the case was reopened. Therefore, we do not find any infirmity in the order of Ld. CIT(A) and hence, the appeal filed by the Revenue is dismissed.

In the result, the appeal filed by the Revenue is dismissed.