M/S. SAHARA UTSARGA WELFARE SOCIETY,KOLKATA vs. DCIT(E), CIRCLE - 1, KOLKATA

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ITA 927/KOL/2019Status: DisposedITAT Kolkata13 July 2020AY 2013-142 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to accumulate 15% of its gross receipts, not net receipts, following the Supreme Court's decision and its own precedent. The Assessing Officer's disallowance was therefore incorrect.

What were the facts?

The assessee, a welfare society, claimed entitlement to accumulate 15% of its gross receipts. The Assessing Officer, however, allowed accumulation only on net receipts. This dispute was brought before the Income Tax Appellate Tribunal.

What were the issues?

The primary issue was whether the 15% accumulation allowed to charitable trusts under Section 11(1) of the Income Tax Act should be calculated on gross receipts or net receipts.

Which sections of the Income-tax Act were involved?

Section 11(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy, Hon’ble

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member) [VIRTUAL COURT HEARING] Assessment Years: 2013-14 M/s. Sahara Utsrga Welfare Society…………………….................................……………….…......Appellant Michael Nagar Kalibari Sarani Kolkata – 700 133 [PAN : AADTS 6744 E] Vs. Deputy Commissioner of Income Tax (E), Circle-1, Kolkata………….........….……....…....Respondent Appearances by: Shri A.K. Tulsiyan, FCA appeared on behalf of the assessee. Shri Jayanta Khanra, JCIT, D/R, appearing on behalf of the Revenue. Date of concluding the hearing : July 13th, 2020 Date of pronouncing the order : July 13th, 2020 ORDER Per J. Sudhakar Reddy, AM :-

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 12, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 12/06/2019 for the Assessment Year 2013-14.

2.

After hearing rival contentions, I find that the sole issue is whether the assessee is entitled to accumulation of 15% on the gross receipts and whereas the Assessing Officer held that the assessee is entitled to 15% of the net receipt.

3.

The Hon’ble Supreme Court of India in the case of CIT vs. Programme for Community Organisation reported in [2001] 248 ITR 0001 (SC) has held as follows:- “Charitable trust- Accumulation of income- Charitable trust is entitled to accumulate 25 per cent of its income derived from property held under trust and not 25 per cent of the income remaining after application of income for charitable purposes – therefore, assessee-trust was entitled to accumulate 25 per cent of donations received by it and not merely 25 per cent of unspent balance.”

The ‘B’ Bench of the ITAT in the assessee’s own case in order dt. 22/01/2020, for the Assessment Year 2012-13, on the same issue held as follows:- “.....We note that in the provisions of section 11(1) it has been clearly mentioned “… 15% of the income”, hence it is gross income of the assessee trust and not the net income. Therefore, based on Assessment Years: 2013-14 M/s. Sahara Utsrga Welfare Society M/s. Sahara Utsrga Welfare Society this factual position as mentioned in Section 11(1) as noted above, we direct the Assessing Officer to position as mentioned in Section 11(1) as noted above, we direct the Assessing Officer to position as mentioned in Section 11(1) as noted above, we direct the Assessing Officer to allow 15% exemption on gross receipts. allow 15% exemption on gross receipts.

4.

Respectfully following the same, Respectfully following the same, we hold that the assessee is entitled to the we hold that the assessee is entitled to the accumulation of 15% on the gross receipt as of 15% on the gross receipt as per provisions of Section 11 of the Act per provisions of Section 11 of the Act. In the result, appeal of the assessee is allowed.

5.

In the result, appeal of the assessee is allowed. Kolkata, the Kolkata, the 13th day of July, 2020.

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