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Facts
Maharaja Agrasen Trust, a charitable institution registered under section 12A, filed its income tax return. The CPC, in an intimation under section 143(1), disallowed the application of Rs.7,93,988/-, which the assessee contended was impermissible under section 143(1) as it does not allow for disallowance of application of income.
Held
The Tribunal held that taxing the entire gross receipts of a registered charitable trust as income under section 143(1) is not permissible. Adjustments under section 143(1) are limited, and treating the application of income as disallowable under this section is erroneous and unsustainable. Consequently, the intimation issued by the CPC was quashed.
Key Issues
Whether the CPC can disallow the application of income of a charitable trust while issuing an intimation under section 143(1) of the Income Tax Act.
Sections Cited
12A, 143(1)
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Income Tax Appellate Tribunal, SMC BENCH CUTTACK
Before: SHRI GEORGE MATHAN
This is an appeal filed by the assessee against the order of the AddI/JCIT(A)-1, Guwahati dated 21/01/2025 passed in Appeal No. ADDL/JCIT(A)-1 GUWAHATI/10048/2022-23 for the assessment year 2023-2024. 2. It was submitted by the Ld.AR that the assesee is a charitable institution and trust. The assesee has registration under section 12(A) of the Act vide an order dated 09.01.2014. The assesee had filled its return of income declaring a net income of Rs.14,112/- as net income. The gross receipts of the assesee was Rs.8,08,100/-. The application of Rs.7,93,988/- had not been allowed by the CPC in the intimation issued under section 143(1)of the Act. It was the submission that the intimation issued under section 143(1) of the Act is invalid in sofaras the provisions of section 143(1) of the Act does not provide for disallowance of the application. It was the submission that the intimation as issued may be quashed.
In reply, the Ld. Sr.DR, vehemently supported the order of the CPC, and the Ld. JCIT(Appeals).
I have considered the rival submissions. A perusal of the facts of the present case clearly shows that the CPC has brought to tax the entire gross receipt of the assesee as its income. The assesee admittedly is registered as a charitable trust. This being so in the event that the CPC desires to make any adjustments in the intimation issued under section 143(1) of the Act it was only possible in respect of such adjustments which are permissible in the intimation under section 143(1) of the Act. This Act of treating the entire receipts of the assesee as the income of the assesee is not permissible. This being so the intimation issued under section 143(1) of the Act being erroneous and unsustainable stands quashed.
In the result, appeal of the assesee is allowed. Order dictated and pronounced in the open court on 23/09/2025. दिनांक Dated 23/09/2025 Prakash Kumar Mishra, Sr.P.S (जार्ज माथन) (GEORGE MATHAN) न्यायिक सदस्य / JUDICIAL MEMBER आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant- Maharaja Agrasen Trust Kantapala, Charampa, Bhadrak, 756101 2. प्रत्यर्थी / The Respondent- ITO, Bhadrak 3. आयकर आयुक्त (अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, कटक / DR, ITAT, Cuttack 6. गार्ड फाईल / Guard file. सत्यापित प्रति //// आदेशानुसार/ BY ORDER, (