CPRS RUGNALAY DENAGI SAMITI,KOLHAPUR vs. ITO, EXEMPTION WARD, KOLHAPUR

The assessee filed an appeal before the Ld. Addl / JCIT(A). However, the Ld. Addl / JCIT(A) also dismissed the appeal filed by the assessee by observing as under:

10 In the instant case, the appellant has claimed exemption u/s 10(23C) of the Act. During the year under consideration, the appellant was not having registration u/s 12A of the Act. The appellant has obtained registration u/s 12A of the Act on 24.06.2019. Therefore, the appellant's claim for exemption u/s 10(23C) of the Act is not tenable and accordingly, this ground of appeal is dismissed. However, as the total receipts of the appellant cannot be termed as its income, the AO is directed to verify the expenses claimed by the appellant and allow the allowable expenses as per provisions of the Act while giving the appeal effect to this order.

As a result, this appeal is dismissed.”

Aggrieved with such order of the Ld. Addl / JCIT(A) the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming denial of exemption u/s 11/10(23C)(iiiae) by the Assistant Commissioner of Income Tax, CPC (hereinafter referred to as the 'AO') in its rectification return even though on the similar set of facts the AO has allowed exemption to the appellant u/s 10(23C)(iiiae) for AY 2019- 20. The appellant submits that the appellant trust being eligible for exemption u/s 10(23C)(iiiae), its income ought to be calculated considering such exemption. The appellant prays that the AO be directed to allow the exemption. The appellant craves leave to add to, amend, alter, modify, delete or add a new ground of appeal before or at the time of hearing.

The Ld. Counsel for the assessee at the outset submitted that the assessee has been granted registration u/s 12AA of the Act vide order dated 24.06.2019 of the CIT(E), Pune for assessment year 2019-20. He submitted that the assessee is entitled to claim exemption u/s 10(23C)(iiiae) of the Act since it does not exceed Rs.1 crore. He submitted that although under identical situation the Assessing Officer has granted the benefit of section 10(23C)(iiiae) of the Act for assessment

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. Addl / JCIT(A).

We have heard the rival arguments made by both the sides, perused the orders of the CPC and the Ld. Addl / JCIT(A) and the paper book filed on behalf of the assessee. We find the exemption u/s 11 of the Act claimed by the assessee was denied by the CPC on account of non-filing of Form 10B. Further, it was also the case of the Revenue that the assessee has obtained registration u/s 12AA of the Act on 24.06.2019. Therefore, the assessee’s claim for exemption u/s 10(23C) of the Act is not tenable. It is the submission of the Ld. Counsel for the assessee that since its gross receipts are less than Rs.1 crore, therefore, the assessee is entitled to claim deduction u/s 10(23C)(iiiae) of the Act. It is also his submission that under identical circumstances, the Assessing Officer has allowed the claim of deduction u/s 10(23C)(iiiae) of the Act for assessment year 2019-20. We find the provisions of section 10(23C)(iiiae) as it stood at the relevant time read as under:

Since the gross receipts of the assessee for the impugned assessment year are less than Rs.1 crore and since the Assessing Officer in assessment year 2019-20 has allowed the similar claim to the assessee, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer / CPC with a direction to allow the claim u/s 10(23C)(iiiae) of the Act after due verification. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent

4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file.