Loading judgment…
Facts
The assessee, a trust, filed its return of income. The assessee's claim for exemption under sections 11 & 13 of the Income Tax Act was denied due to belated filing of Form 10B. The CPC processed the intimation under section 143(1) and brought the entire receipts to tax.
Held
The Tribunal held that disallowing the entire expenditure claimed as application in an intimation under section 143(1) is not permissible. If the benefit of sections 11 & 13 is to be denied, the income should be recomputed under the head business income.
Key Issues
Whether the denial of exemption and disallowance of expenditure in an intimation under section 143(1) is legally valid when Form 10B was filed belatedly.
Sections Cited
11, 13, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : These two appeals are filed by the assessee against the separate orders dated 30.05.2025 & 29.05.2025, passed by ld. Addl/JCIT(A)-3, Chennai, for the assessment years 2018-2019 & 2021-2022. 2. It was the submission of the ld. AR that the assessee is a trust which has filed its return of income on the ground that Form 10B was filed belatedly, the intimation has been issued denying the assessee benefit of the application u/s.11 & 13 of the Act. It was the submission that if at all the CPC was of the view that the Form 10B has been belatedly filed in the intimation u/s.143(1) of the Act, the entire receipts of the assessee should not be brought into tax. The income of the assessee would have to be assessed under the head business income and the expenses are liable to be allowed. This was not done by the CPC. The CPC brought to tax the entire receipts of the assessee. It was the submission that it is not permissible in an intimation u/s.143(1) of the Act.
In reply, ld. Sr. DR vehemently supported the order of the ld.AO & ld. CIT(A).
We have considered the rival submissions. Admittedly the assessee is a trust and filed its return of income as an AOP trust. If the benefit of Section 11 & 13 of the Act is to be denied to the assessee then obviously the income should be recomputed under the head business income. Disallowing the entire expenditure which has been claimed by the assessee as application, is not permissible in an intimation u/s.143(1) of the Act and the same is also not provided in the provisions of Section 143(1) of the Act. This being so, we are of the view that the intimation issued u/s.143(1) of the Act in both the appeals under consideration is bad in law and consequently we quash the same.