SHRI NATHJI CHARITABLE TRUST,KOLKATA vs. DCIT, CPC, BANGALORE
What did the Tribunal hold?
The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer. The AO was directed to verify the assessee's claim of application/accumulation of income and allow it if found correct as per the Act.
What were the facts?
The assessee, a charitable trust, claimed application and accumulation of income amounting to Rs. 38,79,660/-. However, the CPC software processed the return and treated this claim as zero due to a software fault.
What were the issues?
Whether the CPC's software error in processing the return led to an incorrect disallowance of the charitable trust's claim for application and accumulation of income.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH KOLKATA
Before: Shri Sanjay Garg & Dr. Manish Borad
order : September 20, 2022 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 16.03.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’]. The assessee is a charitable trust registered u/s 12A of the Income Tax Act (hereinafter referred to as the ‘Act’) and is entitled to the exemption u/s 11 of the Act.
The sole issue raised, in this appeal, by the assessee-appellant is that the ACIT/CPC while processing the return of the assessee u/s 143(1) of the Act due to some fault in the software of the CPC, has treated the claim of application of income on charitable activities, income accumulated or set apart for application of charitable activities, and the amount accumulated for set apart for specified purpose etc. has been at zero by the software/computer system of CPC as against the claim of the assessee of application/accumulation of total amount of Rs.38,79,660/-. The ld. Counsel for the assessee has further invited our attention to paper book page 39-40 to submit that even in respect of assessment year 2013-14 also, the said application/accumulation of the income Assessment year: 2014-15 Shri Nathji Charitable Trust was disallowed by the computer system of CPC. Under similar circumstances, in an appeal filed by the assessee, the ld. CIT(A) vide order dated 22.05.2018 passed in has directed the Assessing Officer to verify the aforesaid facts and if on verification, it is found that the application/accumulation of income claimed to have made by the assessee-trust has been rightly utilized/accumulated as per the relevant provisions of the Act, then the claim of the assessee for application/setting apart/deemed application/accumulation etc. may be allowed. The fact being similar in this appeal also, the impugned order of the CIT(A) is set aside and the matter is restored to the file of the Assessing Officer with similar directions to examine the claim of the assessee of application of income for charitable purposes/deemed application/accumulated or set apart as per the provisions of the Act and if found correct, the Assessing Officer to allow the same.
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