SHAHU SHIKSHAN PRASARAK MANDAL, LATUR,LATUR vs. ACIT (EXMP.) CIRCLE, AURANGABAD, AURANGABAD

ITA 951/PUN/2024Status: DisposedITAT Pune15 January 2025AY 2020-2119 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the disallowance of Rs. 6,69,44,047/- claimed as deduction under Section 57 of the Act by the AO and confirmed by the CIT(A) was not justified. The Tribunal found that the assessee had submitted documentary evidence, including sanction letters and certificates from the School Education Department, Government of Maharashtra, to substantiate its claim for exemption under Section 10(23C) and to establish the nexus between the income from salary grants and salary expenditure. These documents, which were available with the AO and CIT(A), were not considered. The Tribunal also noted that the assessee's claim for exemption under Section 10(23C) was supported by its audited Income and Expenditure Account. Regarding the procedural issue of filing the return in Form ITR-5 instead of ITR-7, the Tribunal accepted the assessee's contention that it was a bonafide mistake by the tax consultant, especially since the CPC had processed the return and no new data was furnished in the intended correct form. The Tribunal restored the matter to the file of the AO with a direction to verify the assessee's claim afresh after due verification of all documents and evidence, and to decide the matter on merits. The assessee was granted adequate opportunity of hearing. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Shahu Shikshan Prasarak Mandal, an educational trust, appealed against the order of the CIT(A) for AY 2020-21. The assessee filed its return declaring Nil income, claiming deductions under Section 57 of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed a deduction of Rs. 6,69,44,047/- claimed under Section 57, stating the assessee failed to provide supporting documents and establish a nexus between income and expenses. The AO completed the assessment at Rs. 6,69,44,050/-. The assessee argued that the income was government grant for salary and the expenses were related to it. The AO noted the absence of approval under Section 10(23C)(vi) or Section 12AA and the failure to furnish an audit report in Form 10B. The assessee appealed to the CIT(A), who upheld the AO's disallowance. The assessee then appealed to the ITAT.

What were the issues?

1. Whether the Tribunal had to decide if the disallowance of Rs. 6,69,44,047/- claimed as deduction under Section 57 of the Income Tax Act, 1961, by the Assessing Officer was justified. Assessee's Contentions: - The assessee contended that it is covered under Section 10(23C)(iiiab) of the Act and that the income comprises salary grants received from the Government against salaries paid to teaching and non-teaching staff, which are claimed as deductions from other sources. - It argued that the documents submitted, including grant sanction letters and certificates from the School Education Department, Government of Maharashtra, substantiate its claim for exemption under Section 10(23C) and the nexus between income and expenditure. - The assessee also submitted that the filing of return in Form ITR-5 instead of ITR-7 was a bonafide procedural mistake by its tax consultant, which did not cause any loss to the revenue or undue benefit to the assessee. Revenue's Contentions: - The revenue, through the AO and CIT(A), contended that the assessee failed to provide documents substantiating its claim for exemption and grant approval under Section 10(23C)(vi) or Section 12AA. - It argued that the paysheets submitted were proforma and did not clearly indicate grant receipt from the government. - The CIT(A) also observed that the assessee failed to file the return in the correct Form (ITR-7) without any valid reason.

Which sections of the Income-tax Act were involved?

Section 57,Section 142(1),Section 143(2),Section 144B,Section 56,Section 10(23C),Section 12AA,Section 119,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Suhas P. Bora
For Respondent: Shri Ajay Kumar Keshari

PER ASTHA CHANDRA, JM :

The appeal filed by the assessee is directed against the order dated 29.04.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2020-21. 2. Briefly stated, the facts are that the assessee trust is registered under Bombay Public Trust Act as educational trust vide registration certificate dated 31.01.1991. It is also registered under the Societies Registration Act, 1860 vide registration dated 31.10.1990. The assessee trust is carrying on primary and high school at ten different places in Distric

The order continues below.

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