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Facts
The assessee, Kamla Educational Trust, filed its return for AY 2023-24 claiming exemption under Section 10(23C) of the Income Tax Act. An intimation under Section 143(1) was subsequently issued, denying this exemption and bringing the entire gross receipts to tax. The assessee challenged this intimation as erroneous, while the revenue argued that the assessee had failed to provide audit reports and other necessary details.
Held
The Tribunal held that denying an exemption under Section 10(23C) and taxing gross receipts is not an 'arithmetical mistake' permissible under Section 143(1) of the Act. Such an action would necessitate computing the income as 'business income' after preparing financial statements, which was not done. Therefore, the intimation issued under Section 143(1) was quashed as being contrary to the provisions of the Act.
Key Issues
Whether the denial of exemption under Section 10(23C) and the taxation of entire gross receipts can be processed as an arithmetical mistake through an intimation issued under Section 143(1) of the Income Tax Act.
Sections Cited
Section 10(23C), Section 143(1)
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Income Tax Appellate Tribunal, “SMC BENCH”, RANCHI
Before: SHRI GEORGE MATHAN
निर्ाारिती की ओर से /Assessee by : Shri P.P.Singh, AR राजस्व की ओर से /Revenue by : Shri Khubchand T Pandya, Sr. DR सुनवाई की तारीख / Date of Hearing : 24/11/2025 घोषणा की तारीख/Date of Pronouncement : 24/11/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld. Addl/JCIT(A)-1, Nashik, dated 10.06.2025 for the assessment year 2023- 2024.
Shri P.P.Singh, ld.AR appeared on behalf of the assessee. Shri Khubchand T Pandya, Sr. DR appeared on behalf of the revenue.
It was submitted by ld AR that the assessee had filed the return of income for the impugned assessment year on 9.10.2023 claiming exemption u/s.10(23C) of the Act. It was the submission that the intimation u/s.143(1) of the Act was issued denying the assessee exemption claimed u/s.10(23C) of the Act and had brought to tax the entire gross receipts of the assessee without allowing the exemption claimed.. It was the submission that the intimation u/s.143(1) of the Act issued to the assessee is erroneous and is liable to be quashed.