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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
आयकर अपीलीय अिधकरण, "एस.एम.सी" ᭠यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH CUTTACK
(THROUGH VIRTUAL HEARING)
᮰ी जाजᭅ माथन, ᭠याियक सद᭭य केसमᭃ । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER
आयकर अपील सं/ITA No.146/CTK/2025 (िनधारणᭅ वष / ᭅ Assessment Year : 2023-2024)
Maharaja Agrasen Trust Kantapala, Charampa, Bhadrak, 756101 | Vs | ITO, Bhadrak PAN No. : AADTM 5824 D (अपीलाथᱮ /Appellant) | (ᮧ᭜यथᱮ / Respondent) से /Assessee by िनधाᳯᭅरती कᳱ ओर | : | Shri Anil Kumar Agrawala, AR राज᭭व कᳱ ओर से /Revenue by | : | Shri Vijay Singh, Sr. D.R. / Date of Hearing सुनवाई कᳱ तारीख | : | 23/09/2025 तारीख/Date of Pronouncement घोषणा कᳱ | : | 23/09/2025
आदेश / O R D E R
This is an appeal filed by the assessee against the order of the Addl/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.
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
ITA No.146/CTK/2025
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.
Sd/-
(जाजᭅ माथन)
(GEORGE MATHAN)
᭠याियक सद᭭य / JUDICIAL MEMBER
ᳰदनांक Dated 23/09/2025
Prakash Kumar Mishra, Sr.P.S
आदेश कᳱ ᮧितिलिप अᮕिेषत/Copy of the Order forwarded to :
- 1. अपीलाथŎ / The Appellant- Maharaja Agrasen Trust Kantapala, Charampa, Bhadrak, 756101 - 2. ŮȑथŎ / The Respondent- ITO, Bhadrak - 3. आयकर आयुƅ(अपील) / The CIT(A), - 4. आयकर आयुᲦ / CIT - 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, कटक / DR, ITAT, Cuttack - 6. गाडᭅफाईल / Guard file.
स᭜यािपत ᮧित //True Copy//
आदेशानसु ार/ BY ORDER,
(Assistant Registrar) आयकर अपीलीय अिधकरण, कटक/ITAT, Cuttack