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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri Manish Borad & Sri Sonjoy Sarma
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA [Virtual Court] (Before Sri Manish Borad, Accountant Member & Sri Sonjoy Sarma, Judicial Member) I.T.A. Nos.: 323/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust……………………..............Appellant [PAN: AAATJ 2028 F] Vs. DCIT, CPC, Bengaluru….......................................................Respondent I.T.A. No.: 471/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust……………………..............Appellant [PAN: AAATJ 2028 F] Vs. NFAC, Delhi………………........................................................Respondent Appearances by: Sh. Siddharth Jhajharia, FCA, appeared on behalf of the Assessee. Sh. Surendra Kumar Mishra, Addl. CIT, appeared on behalf of the Revenue. Date of concluding the hearing : February 17th, 2022 Date of pronouncing the order : February 25th, 2022 ORDER Per Manish Borad, Accountant Member: These appeals filed by the assessee pertaining to the Assessment Year (in short “AY”) 2018-19 is directed against the order of ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) [in short ld. “CIT(A)”] dated 06.09.2021 & 01.10.2021 vide Appeal No. CIT(A), Kolkata- 25/10093/2019-20 & CIT(A), Kolkata-25/10092/2019-20 which are arising out of the assessment order framed u/s 154 & 143(1) of the Income Tax Act, 1961 (in short the “Act”) dated 15.07.2019 & 21.05.2019 respectively by DCIT, Ward-CPC, Bengaluru. 2. The assessee is in appeal before the Tribunal raising the following identical grounds:
2 I.T.A. No.: 323 & 471/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust. “1. For that in view of the facts and in the circumstances the Ld. CIT(A), NFAC was wholly unjustified in not adjudicating the ground so raised before it on merits and the Ld. CIT(A), NFAC’s action in directing the AO in passing fresh order is bad in law and it may be held accordingly. 2. Without prejudice to Ground No. 1 above, the Ld. CIT(A), NFAC has effectively set aside the order so passed by AO u/s 154 and since the Ld. CIT(A), NFAC does not possess power to set aside an order hence the action of the Ld. CIT(A), NFAC is bad in law and it may be held accordingly
Without prejudice to Grounds No. 1 & 2 above, the Ld. CIT(A) NFAC was wholly unjustified in not adjudicating the AO’s action in not allowing deduction in respect of amount utilized / applied for charitable purpose of Rs. 6,02,569/- as mentioned in Schedule - ER of R.O.I. and hence necessary direction may kindly be issued accordingly. 4. Without prejudice to Grounds No. 1, 2 & 3 above, the Ld. CIT(A), NFAC was unjustified in not adjudicating the AO’s action in not allowing deduction u/s 11(1)(2) claimed for Rs. 3,86,090/- for which Form 9A was filed well before the due date of filing the R.O.I. and it may be held accordingly. 5. For that in view of the facts and in the circumstances the Ld. CIT(A), NFAC was unjustified in not allowing deduction u/s 11(1)(a) for Rs. 1,71,463/- being statutory deduction of 15% of aggregate income received during the year and it may be held accordingly. 6. For that your petitioner craves the right to put additional grounds and or to alter / amend / modify the present grounds at the time of hearing.” 3. From perusal of the grounds, we note that the grievance of the assessee is with regard to not allowing of deduction of Rs.11,60,122/- u/s 11 of the Act which are claimed to have been incurred for charitable purpose.
Brief facts of the case, as called out from the records, are that the assessee is a charitable Trust registered u/s 12AA of the Act vide registration no. 36-T/WB-VII/78-79 dated 06.07.1979 and engaged in the activity of providing medical relief to poor. Return for AY 2018-19 was filed on 29.06.2018 declaring NIL income after claiming deduction of amount applied for charitable purposes at Rs.11,60,122/-. In this return, the assessee did not claim the deduction in the relevant column prescribed in the ITR Form No. 7. Thereafter, vide intimation u/s 143(1) of the Act dated 21.05.2019, the assessee’s claim was rejected and income assessed at Rs.11,60,122/-. On receiving the intimation, the assessee filed a rectification return on 04.06.2019 rectifying the mistake and correctly
3 I.T.A. No.: 323 & 471/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust. disclosing the deduction in the prescribed column in ITR Form No. 7. However, in the rectification order u/s 154 of the Act dated 08.08.2019, assessee’s claim for deduction was again rejected.
Aggrieved, the assessee preferred appeal both against the order u/s 143(1) and the order u/s 154 of the Act. Both the appeals were instituted on 22.08.2019. Ld. CIT(A) firstly dealt with the appeal filed against the order u/s 154 of the Act and partly allowed the assessee’s appeal observing that the Central Processing Centre (CPC) has denied the claim made by the assessee u/s 11(1)(2) & 11(1)(a) of the Act without assigning any reason and also in the order u/s 154 of the Act, no discussion has been made about the reason for not allowing the exemption/deduction. Ld. CIT(A), further, directed the AO to pass a fresh speaking order u/s 154 of the Act. As far as the appeal before the ld. CIT(A) against the order u/s 143(1) of the Act is concerned, ld. CIT(A) held it as infructuous.
Aggrieved assessee is now before this Tribunal against both the impugned orders of ld. CIT(A). Ld. Counsel for the assessee, referring to the paper book containing 70 pages filed on 08.11.2021, stated that firstly ld. CIT(A) exceeded its power of setting aside the issue to the AO for passing a fresh order dealing on merits of the issue. Secondly, he contended that the assessee has rightly claimed the deduction in the prescribed format and nothing adverse has been found against the assessee for denying the deduction and therefore, the same should be allowed.
Per contra, the ld. D/R vehemently argued in support of the order of the ld. CIT(A)
We have heard the rival contentions and perused the records and carefully gone through the documents filed before us. The grievance of the assessee in the instant two appeals is against the finding of the ld. CIT(A) in not allowing the benefit of claim made for deduction u/s 11 of the Act at Rs.11,60,122/- and also raising a ground that the ld. CIT(A) erred in setting aside the issue to the AO for fresh examination.
4 I.T.A. No.: 323 & 471/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust. 8.1. We find that the assessee is a charitable Trust registered u/s 12AA of the Act since 06.07.1979 and the same is in force. There is no iota of evidence on record to dispute the fact that the assessee Trust is regularly carrying out charitable activities as per its objects for which it has been granted registration u/s 12AA of the Act. Against the gross income earned during the year at Rs.11,60,122/-, the said Trust incurred an expenditure of Rs.6,02,569/- for charitable purpose, it also set apart an amount of Rs.1,71,463/- u/s 11(1)(a) of the Act for application to charitable or religious purposes in subsequent year and for doing the same, Form No. 10B has been filed. The deduction has also been claimed for Rs.3,86,090/- u/s 11(1)(2) of the Act, for which Form No. 9A has been filed. So far as the eligibility of the assessee for claiming the deduction of Rs.11,60,122/- we find merit in the contention of the ld. Counsel for the assessee. The reason for denial of this deduction by the Revenue authorities was only on account of a mistake made by the assessee in filing the income tax return in ITR Form No. 7 by not filling the deduction amount in the prescribed column which resulted in denying the deduction by the Central Processing Centre (CPC). The said mistake has already been rectified by the assessee by filing the rectification on the income tax portal and submitting the corrected XML file on the income tax portal. The hard copy of the revised return/rectified return is placed on record in paper book at page 35-65 and after perusal of the same we find that the assessee has shown the respective amount of deduction claimed in the correct prescribed column. But even after filling the correct details, Central Processing Centre (CPC) has again rejected the claim without assigning any reason. In our view, the ld. CIT(A) erred in not deciding the issue on merit and exceeded its jurisdiction by directing the AO to examine the issue afresh.
We, therefore, under the given facts and circumstances of the case, are of the considered view that the assessee being a charitable Trust registered u/s 12AA of the Act deserves to be allowed the deduction of Rs.11,60,122/- (6,02,569/- + 3,86,090/- + 1,71,463/-) claimed u/s 11 of the Act. Since similar issue has been raised by the assessee in ITA No.
5 I.T.A. No.: 323 & 471/Kol/2021 Assessment Year: 2018-19 Jai Devi Atma Ram Padia Seva Trust. 471/Kol/2021 raised against the order u/s 143(1) of the Act and ITA No. 323/Kol/2021 raised against the order u/s 154 of the Act, we are of the view that we allow the assessee’s appeal in ITA No. 323/Kol/2021 and delete the addition made at Rs.11,60,122/- and allow the grounds raised by the assessee in this appeal by setting aside the finding of the ld. CIT(A) and allowing the assessee’s appeal. As far as ITA No. 471/Kol/2021 is concerned relating to denial of deduction in the intimation issued u/s 143(1) of the Act, the same becomes infructuous since we have already allowed the assessee’s appeal in ITA No. 323/Kol/2021 deleting the disallowance made in the order u/s 154 of the Act.
In the result, appeal of the assessee in ITA No. 323/Kol/2021 is allowed and ITA No. 471/Kol/2021 is dismissed as infructuous. Kolkata, the 25th February, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 25.02.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. Jai Devi Atma Ram Padia Seva Trust, C/o. M/s. Salarpuria Jajodia & Co., 7, C.R. Avenue, 3rd Floor, Kolkata-700 072. 2. DCIT, CPC, Bengaluru. 3. NFAC, Delhi. 4. CIT(A)- National Faceless Appeal Centre (NFAC). 5. CIT- 6. CIT(DR), Kolkata Benches, Kolkata.