RAJASTHAN CRICKET ASSOCIATION,JAIPUR vs. INCOME TAX OFFICER, EXEMPTIONS WARD 1, JAIPUR, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR

Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k
BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 37/JPR/2025
fu/kZkj.k o"kZ@Assessment Years : 2016-17
Ward-1,
Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAATR0798J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shyam Lal Agarwal, C.A. &

Shri Tarun Agarwal, C.A.
jktLo dh vksj ls@ Revenue by : Shri Gautam Singh Choudhary, JCIT-Sr.DR lquokbZ dh rkjh[k@ Date of Hearing : 19/02/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 15/04/2025

vkns'k@ ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM
By way of present appeal, the assessee challenges the order of National Faceless Appeal Centre, Delhi (for short CIT(A) dated
18.11.2024, the dispute relates to the assessment year 2016-17
that the order of Ld. CIT(A) arises because the assessee challenged the order passed u/s 154 of the Income Tax Act, 1961
(for short “Act”) dated 15.12.2020 passed by ITO, Exemption,
Ward-1, Jaipur ( for short AO) before him.
Societies Registration Act, 1958. The certificate issued u/s. 12AA of the Income Tax Act, 1961 was withdrawn by the Commissioner of Income Tax-I, Jaipur on 28.12.2010 w.e.f. 2005-06 which was subject matter of appeal and our own Hon’ble Rajasthan High
Court disposed of that appeal in favour of the assessee.

Details of income applied during the years ended 31.03.2016

Particular

Amount
Gross expenses as per I & E account
4,88,80,927

Less: Depreciation
1,24,78,834

Add: Income Tax Demand deposited
4,25,00,000
Add: Acquisition of fixed assets for the objects of the Association
83,413
7,89,85,506
Less: Application out of the amount accumulated during F.Y. 2011-12
1,26,00,000

Less: Applications out of the amount accumulated during the F.Y. 2012-13
1,56,89,251

Less: Applications out of the amount accumulated during the F.Y. 2013-14
3,53,66,683
6,36,55,934
Total

1,53,29,572

Here it is not known either from the present application or assessment records that the assessee has filed Form No.10 within the stipulated time in the prescribed form and procedure and the purpose for which the same were filed in F.Ys.2011-12 to 2013-14. This is particularly so despite affording reasonable and sufficient opportunities to the assessee during assessment proceedings. Now, the only way left out to the AO by the assesseein assessment proceedings is to assumeand complete assessment proceedings as it desires. It may also be seen from the table furnished by the assessee as quoted above, an amount of income tax liability amounting to Rs 4,25,00,000/- was met out from the accumulated funds of earlier years. Thus, it is to be seen, discussed and decided as to whether the Form No.10 (if at all filed within the stipulated time) were filed for the specific purpose of "paying outstanding Income tax liabilities". If it is not so, then the present narrative will aobviously collapse. In these circumstances, as is clear, debatable issues are outside the ambit of provisions 154 of the Act.

On the other than hand, if it is presumed that these are set-apart amounts u/s 11(1)(a), then also the stand adopted by the assessee is subject to long discussion and debate as set apart u/s 11(1)(a) of the Act is permissible on the unspent receipts of out of current years receipts and expenditure subject to maximum of 15% of gross receipts of the year. There is no ambiguity in so far as set-apart allowed u/s 11(1)(a) is concerned as it states that if assessee could not spent 100% of current years receipts but spent at-least 85% out of current years receipts, then it is permitted to set-apart remaining 15% without any conditions. Things gives further clarity from the fact that if the amount expended towards the objects is morethan 85%, then only the remaining portion out of current years receipts is allowed to be set-apart u/s 11(1)(a). This means, 15% set-apart is not a fixed standard deduction. Total receipts as per assessment records for A.Y. 2016-17 is Rs 1.80,34,791/- against which it had utilized an amount of Rs 3.64,02,093/-

In these circumstances, it cannot be said that the issue now raised before the AO in 154 application is rectifiable u/s 154 of the Act. Since, assessee had failed to submit/furnish such details/information called for by the AO during assessment proceedings, the same cannot be given
3. Aggrieved, from that order passed u/s. 154 of the Act the assessee filed an appeal before the ld. CIT(A). Apropos to the grounds so raised and after hearing the contention of the assessee that appeal was disposed off by ld. CIT(A) by observing as under :
“6. Decision:-
I have gone through AO's order, appellant submission and other record available. It is seen that during scrutiny assessment, in the return of income filed for A.Y. 2016-17, association has declared total receipts at Rs 1,80,34,791/- out of which Rs
1,53,29,572/- has been claimed as application of income and claimed income accumulated or set-apart u/s 11(1)(a) upto 15%
at Rs 27,05,219/- and declared Nil total income. However, examination of the audited Income & Expenditure account obtained during the course of assessment proceedings reveals that the gross receipts at Rs 1,80,34,791/- against which it had incurred expenditure at Rs 4,88,80,927/- resulting in excess of expenditure over income at Rs 3,08,46,136/-.

In view of above position of the case, vide letter No.
ITBA/AST/F/17/2018-19/1014056649(1) dated 06/12/2018, AO specifically asked appellant to explain the discrepancy with documentary evidence in support of their submissions. However, nothing has been submitted on the specific query raised by AO.
It seemed during the year assessee association does not have any surplus so as to make claim for accumulation or set apart u/s 11(1)(a) as claimed in the return of income. As has already been discussed above, its expenditure during the year exceeds revenue by Rs 3,08,46,136/-. Therefore, claim made in the Rajasthan Cricket Association vs. ITO (E)
6
return of income u/s. 11(1)(a) at Rs. 27,05,219/- is unacceptable and hence disallowed by AO.

Against this appellant filed rectification application with AO. The rectification application rejected by the AO vide its order dated
15.12.2020 as under-

“The explain discrepancies found on the documents furnished during the course of assessment proceedings. Now assessee has filed application us/ 154 with the explanation that the excess expenditure was met out from accumulated funds of earlier years i.e. F.Y.2011-12,
2012-13 & 2012-13 and therefore, set-apart of 15% claimed is correct and therefore, requested to rectify the same by passing order u/s 154
of I.T. Act, 1961. The justification furnished in the application in support of its submission is as under:-
Details of income applied during the years ended 31.03.2016

Particular

Amount
Gross expenses as per I & E account
4,88,80,927

Less: Depreciation
1,24,78,834

Add: Income Tax Demand deposited
4,25,00,000

Add: Acquisition of fixed assets for the objects of the Association
83,413
7,89,85,506
Less: Application out of the amount accumulated during F.Y. 2011-12
1,26,00,000

Less: Applications out of the amount accumulated during the F.Y. 2012-13
1,56,89,251

Less: Applications out of the amount accumulated during the F.Y. 2013-14
3,53,66,683
6,36,55,934
Total

1,53,29,572

Here it is not known either from the present application or assessment records that the assessee has filed Form No.10 within the stipulated time in the prescribed form and procedure and the purpose for which the same were filed in F.Ys.2011-12 to 2013-14. This is particularly so despite affording reasonable and sufficient opportunities to the assessee during assessment proceedings. Now, the only way left out to the AO by the assessee in assessment proceedings is to assume and complete assessment proceedings as it desires. It may also be seen from the table furnished by the assessee as quoted above, an amount of income tax liability amounting to Rs 4,25,00,000/- was met out from the accumulated funds of earlier years. Thus, it is to be seen, discussed and decided as to whether the Form No.10 (if at all filed within the stipulated time) were filed for the specific purpose of "paying outstanding Income tax liabilities". If it is not so, then the present narrative will aobviously collapse. In these circumstances, as is clear, debatable issues are outside the ambit of provisions 154 of the Act. On the other than hand, if it is presumed that these are set-apart amounts u/s 11(1)(a), then also the stand adopted by the assessee is subject to long discussion and debate as set apart u/s 11(1)(a) of the Act is permissible on the unspent receipts of out of current years receipts and expenditure subject to maximum of 15% of gross receipts of the year.
There is no ambiguity in so far as set-apart allowed u/s 11(1)(a) is concerned as it states that if assessee could not spent 100% of current years receipts but spent at-least 85% out of current years receipts, then it is permitted to set-apart remaining 15% without any conditions.
Things gives further clarity from the fact that if the amount expended towards the objects is morethan 85%, then only the remaining portion out of current years receipts is allowed to be set-apart u/s 11(1)(a).
This means, 15% set-apart is not a fixed standard deduction. Total receipts as per assessment records for A.Y. 2016-17 is Rs
1.80,34,791/- against which it had utilized an amount of Rs
3.64,02,093/- In these circumstances, it cannot be said that the issue now raised before the AO in 154 application is rectifiable u/s 154 of the Act.
Since, assessee had failed to submit/furnish such details/information called for by the AO during assessment proceedings, the same cannot be given any cognizance in the present application as the same are outside the ambit of provisions of section 154 of the Act. Therefore, after considering the above facts and position of the case, the present rectification application cannot be accepted and accordingly rejected as the same lack merits.”
As discussed above by AO in his rectification order, the matter needs verification and analysis on the claims made by appellant and is not some mistake apparent on record.
Hence, this issue cannot be dealt u/s. 154. In view of this action of AO is upheld and grounds of appeal are dismissed.”

In the assessment order, the Ld. AO has mentioned that the application of income as Rs. 1,80,34,791/- (restricted to the gross receipts),and arbitrarily held at para 4 of the order passed under section 143(3) that,
“In the return of income filed for A.Y. 2016-17, Association has declared total receipts at Rs 1,80,34,791/- out of which Rs 1,53,29,572/- has been claimed as application of income and claimed income accumulated or set-apart u/s 11(1)(a) upto 15% at Rs 27,05,219/- and declared Nil total income. However, examination of the audited Income &Expenditure account obtained during the course of assessment proceedings reveals that the gross receipts at Rs 1,80,34,791/- against which it had incurred expenditure at Rs 4,88,80,927/- resulting in excess of expenditure over income at Rs 3,08,46,136/-.”
2. However, the applications made as per the Income Tax Return, computation of income, and the Form 10B were 1,53,29,572/- only.
Further, there was no disallowance of any application by the Ld. AO as claimed in the income tax return by the appellant.The copy of the ITR and Form 10B (duly filed), is available with at paper book page 86 to 95
and page 75 to 79 respectively.

The details as available on record before the Ld. Assessing Officermake it evident that out of the total expenditure of Rs. 3,64,02,093/- as per the income & expenditure accounts, only 1,53,29,572/- were applied out of the current year's income and the balance applications were made out of last year’sincome accumulations. The same is also evident from Annexure A to the audit report available at page79of the paper book.

Since records, such as the Income Tax Return, Computation of Income, Financial Statements, and Audit report, were already submitted to the Ld. AO during the assessment proceedings, all the documents/informationrequiredfor a claim of set apart under section 11(1)(a), theLd AO has erroneously mentioned that the assessee has no surplus to claim for accumulation in the order. Hence, a rectification application was preferred under section 154 of the Income
Tax Act,1961
In view of the above, it is requested to your kind honors to allow the ground in favor of the appellant association.
Ground No. 3
“That the Ld. CIT(A) failed to provide adequate opportunity to the appellant to explain its case, thereby violating the principles of natural justice.”
The rectification application was disposed of by the Ld. AO on 15/12/2020 after rejecting the application and held at page 2 of the order that, “Here it is not known either from the present application or assessment records that the assessee has filed Form No.10 within the stipulated time in the prescribed form and procedure and the purpose for which the same were filed in F.Ys.2011-12 to 2013-14. This is particularly so despite affording reasonable and sufficient opportunities to the assessee during assessment proceedings. Now, the only way left out to the AO by the assessee in assessment proceedings is to assume and complete assessment proceedings as it desires.
It is clear from the above statement of ld. AO that, he has grossly erred in mentioning that the Form 10 for FY 2011-12 to FY 13-14 have to be verified now at the time when rectification has been sought of the mistake, while it is well known to the ld. AO that the assessment of all those previous years have already been completed under scrutiny assessment and further order under section 250 of the I.T. Act, 1961. Hence, it is very clear that all such records were available in his own files and knowingly mentioning the wrong facts were just with the intend to reject the application for rectification.
Further, as per the assessment record which is available on E- proceedings of the Income Tax portal, the assessee has submitted all the required details during the assessment proceedings on 20.11.2018
vide letter dated 19.11.2018 like copy of the Form 10B, Balance Sheet,
Income & Expenditure Account, Computation of Income, ITR etc.
Further, Section 154 of the Act allows rectification of mistakes apparent from the record. The Hon’ble Supreme Court in the case of T.S. Balaram v. Volkart Bros. [(1971) 82 ITR 50 (SC)] has held that a mistake apparent from the record should be patent and not requiring prolonged reasoning. The present case involves an apparent mistake, as the facts were evident from the records.
In view of the above, it is requested to your kind honors to allow the ground in favor of the appellant association.”

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 15/04/2025. ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 15/04/2025 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Rajasthan Cricket Association, jaipur. 2. izR;FkhZ@ The Respondent- ITO, Exemption, Ward-1, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 37/JPR/2025}

vkns'kkuqlkj@ By order

सहायक पंजीकार@Aेेज. त्महपेजतंत
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