YOUNG MEN'S CHRISTIAN ASSOCIATION,,SALEM vs. ITO, EXEMPTIONS WARD,, SALEM

:-2-: & 2210/Chny/2019 against the orders passed U/s.154 of the Income Tax Act, 1961 (in short ‘the Act’) was dismissed.

The Ld.AR submitted that the assessee has filed various grounds in its appeals. The main issue is that the Ld.CIT(A) is not justified in refusing to allow deduction U/s.24(a) at the rate of 30% of the rental income of the assessee, which is registered U/s.12AA of the Act, in the respective assessment years and argued on this issue alone.

Per contra, the Ld.DR submitted that the Centralized Processing Centre, processed the cases U/s.143(1)(a) of the Act, on which the rectification orders were passed. Therefore, the assessee’s claim is prima facie is not allowed U/s.154 of the Act. Further, he submitted that as conceded fairly by the Ld. AR that as per the jurisdictional High Court’s decision in the case of CIT v. Rao Bahadur Calavala Cunnan Chelty Charities in 135 ITR 485, particularly in Page No. 495, the income in the case of a trust has to be arrived at in the normal commercial manner without reference to the provisions which are attracted by section 14 of the Act. Therefore, there is no merit in the assessee’s case.

We heard the rival submissions. Since the assessee is registered U/s.12AA of the Act and claimed to be a charitable trust, its income has :-3-: & 2210/Chny/2019 to be computed in accordance with normal commercial manner and not U/s.14 of the Act. Therefore, the assessee’s claim that it is entitled for a deduction U/s. 24(a) of the Act at the rate of 30% on the rental income is not correct and hence, we do not find any merit in the grounds of the appeals filed by the assessee.

In the result, both the appeals of the assessee are dismissed.