INSTITUTE MANAGEMENT COMMITTEE ITI JHALAWAR ,JHALAWAR vs. ITO WARD JHALAWAR, JHALAWAR

Since the issues involved in these appeals in ITA Nos. 39 & 41/JP/2025 for A.Ys 2013-14 & 2014-15 are inter related, identical on facts and are almost common, except the difference in figure disputed in each year, therefore, these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 3. At the outset, the ld. AR has submitted that the matter in ITA No. 39/JP/2025 may be taken as a lead case for discussions. Before moving towards the facts of the case we would like to mention that the assessee in this appeal has raised the following grounds; 1. The impugned order u/s 147/148 rws 144B dated 21.03.2022, as well as the action taken u/s 147/148 and notices are bad in law, illegal, invalid, void-ab-intio on facts of the case, for want of juri iction, without proper approval and satisfaction of higher authorities u/s 151 of the Act, and also barred by limitation and various other reasons and hence the same may kindly be quashed.

Rs.28,50,637/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 28,50,637/- made by the ld. AO by denying the claim/exemption u/s 10(23C)(iiiad) for which the assessee is or was entitled, also erred in not considering the material available on record in their true perspective and sense. Hence the claim so denied or disallowed by the ld. AO is being totally contrary to the provisions of law and facts on the record and hence the same may kindly allowed and the addition may kindly be deleted in full. 3. The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234 A,B,C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.

The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing.

Rs.27,47,673/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 27,47,673/- made by the ld. AO by denying the claim/exemption u/s 10(23C)(iiiad) for which the assessee is or was entitled, also erred in not considering the material available on record in their true perspective and sense. Hence the claim so denied or disallowed by the ld. AO is being totally contrary to the provisions of law and facts on the record and hence the same may kindly allowed and the addition may kindly be deleted in full.

The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234 A,B,C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.

The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing. 4. Succinctly, the fact as culled out from the records is that the Assessee is an AOP(Trust). In this case, the department had information in its possession that the Assessee had income chargeable to tax has Institute Management Committee ITI Jhalawar vs. ITO escaped assessment. Therefore, there were reasons to believe that the Assessee has not disclosed fully and truly all material facts necessary for his assessment for that Assessment year. After recording satisfaction "reasons to believe" and obtaining the prior approval of the competent authority, notice u/s 148 of the Act was issued on 24/03/2021. In the instant case, the record reveals that the assessee has received an interest income of Rs.26,94,361/- during the year, however, the assessee has not filed return of income for the year under consideration. Therefore, an assessee by issuance of notice u/s. 148 was required to file the ITR within a month of receipt of the notice. In response, the Assessee filed its return of income on 23.04.2021. Thereafter statutory notices were issued to the assessee. Ld. AO noted that the assessee filed a return of income declaring nil income after claiming exemption u/s.10. During the year, the assessee is in receipt of Income from other sources of Rs 28,50,637/- and the same was claimed exempt u/s. 10 of the Act. By virtue of section 139(4C) every educational institution referred to in sub-clause (ad) or sub-clause (vi) of Section 10(23C) whose total income in respect of which such institutions is assessable, without giving effect to the provisions of section 10, exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and Institute Management Committee ITI Jhalawar vs. ITO verified in the prescribed manner and setting forth such particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1). In this regard, the assessee was specifically asked to furnish the copy of trust deed and copy of certification of registration u/s 12A and/or 10(23C) and to explain why the claim of exemption should not be denied as they have not filed the return of income within the due date as stipulated u/s.139(1) of the Act. In response to the letter issued, the assessee replied on 27.12.2021, relevant portion is produced as under- "We hereby inform that the society was formed for execution of memorandum of agreement between the President of India. The governor/administrator of the State Rajasthan and as Industrial partner for "upgradation of government industrial Training Institute (ITI) Jhalawar under "Public Private Partnership: (PPP). We further inform that a certain fund was given to IMC by Central Govt as Interest free loan for obtaining the purpose of the aforesaid PPP Scheme, IMC made the FDR of the amount received from the Govt. and interest earned on it was utilized for the objects of the society. DEPAR

Aggrieved from the order of the National Faceless Assessment Center, assessee preferred an appeal before the ld. CIT(A). Apropos to the Institute Management Committee ITI Jhalawar vs. ITO grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 5.1 I have carefully considered the facts of the case, assessment order and submissions filed by the appellant. As per the assessment order, the appellant firm had received interest income of Rs. 26,94,361/- during the F.Y. 2012-13 relevant to A.Y.2013-14 and did not file return of income for the year under consideration. The case was reopened vide notice 148 dated 24.03.2021, in response of the same the appellant had filed return of income declaring nil income after claiming exemption u/s10 of the IT Act, 1961. As per the assessment order, during the relevant year, the appellant had received Rs.28,50,637/- as Income from other sources and the same was claimed as exempt income u/s 10 of the IT Act, 1961. As per the assessment order, the appellant did not file the Return of Income for the relevant assessment year voluntarily u/s 139 of the IT Act, hence the AO disallowed the claim of exempt income for Rs.28,50,637/- as claimed by the appellant under the provision of section 10 of the IT Act, 1961 and passed an assessment order u/s 144 r.w.s. 147 at assessed income of Rs. 28,50,640/-.

2 During the course of appellate proceedings, the appellant has submitted various submissions and documentary evidences at the time of filing the appeal as well as in response to notice of hearing u/s 250. The appellant has furnished copies of order for registration u/s 12AA of the IT Act, 1961, dated 19.02.2019, computation of income, constitution of institute management committee (I.T.I., Jhalawar, Rajasthan), Society Registration Certificate and acknowledgment of income tax return (filed on 23.04.2021) for the relevant year as documentary evidences in support of it's grounds of appeal. Further, on perusal of the assessment order, it has seen that the only reason of disallowance of the exempt income of Rs.28,50,637/-was extracted by the AO that the appellant had not filed it's return of income during stipulated time under the provision of section 139 of the IT Act, 1961. 5.3 However, it has also been seen that the appellant did not file a valid Income Tax Return within the stipulated time permitted under section 139(1) of the Income Tax Act, 1961, hence the benefit of deduction u/s 10 or u/s 12AA can't be allowed to the appellant under the provision of IT Act, 1961. No such deduction shall be allowed to him unless he furnishes a return of it's income for such assessment year on or before the due date specified under section (1) of Section 139. Hence, the appeal is hereby disallowed. Further, it is also pertinent to Institute Management Committee ITI Jhalawar vs. ITO mention that the appellant will be eligible to claim the said deduction if it files a valid return of income for the relevant year after getting the necessary approval from the competent authority under the provision of section 119(2) of the IT Act, 1961. 6. Resultantly, the appeal of the appellant is dismissed.

Feeling dissatisfied with the above order of the ld. CIT(A), the assessee preferred the present appeal. In support of the grounds so raised by the assessee, ld. AR of the assessee, has filed the written submissions which reads as follows; “The brief facts of the case are that the assessee is a Society registered under the Raj. Society Act on dt.11.03.2008. Vide Reg. Certificate No. 99/Jhalawar/2007-08 dt.11.03.2008 (PB3-14 ) and Society is having main objects of to general public utility, for the purpose of education training and other advancement of object of general public utility, the photocopy of the registration certificate with