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Facts
The appeal was filed by the assessee, Mount Olive Welfare Trust, against an order of the CIT(A) for AY 2015-16. The appeal was time-barred by 75 days, with the assessee attributing the delay to the deteriorating health of a trustee and staff issues. The assessee also challenged a disallowance of Rs. 10,35,000/- for cash payments to laborers for construction, and Rs. 1,153/- for motor cycle repair expenses.
Held
The Tribunal condoned the delay, finding a reasonable cause. The disallowance for cash payments was deleted as TDS provisions were not applicable for AY 2015-16. The motor cycle repair expenses were allowed as the vehicle was used for the benefit of the trust, even though it was owned by a trustee.
Key Issues
Whether the delay in filing the appeal is condonable and if the disallowance on account of cash payments and motor cycle repair expenses are justified.
Sections Cited
TDS
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Mount Olive Welfare Trust, Mount Olive Welfare Trust, Vs. Income Income Tax Tax Officer Officer C/O C/O Mount Mount Olive’s Olive’s English English (Exemption) Ward, Ranchi (Exemption) Ward, Ranchi Medium Medium School, School, Karamtoli, Karamtoli, HO Ghaghra, Gumla HO Ghaghra, Gumla-835207 PAN/GIR No. . (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri Vinay Goenka, ld AR Vinay Goenka, ld AR Revenue by :Shri Khub Chand Pandya, Sr hri Khub Chand Pandya, Sr DR Date of Hearing : 09/06/ /2025 Date of Pronouncement : 09/06/ /2025 O R D E R Per Bench
This is an appeal filed by the assessee against the order of ld CIT(A) is an appeal filed by the assessee against the order of ld CIT(A) is an appeal filed by the assessee against the order of ld CIT(A) NFAC in Appeal No.CIT(A), Ranchi/10269/2017 CIT(A), Ranchi/10269/2017-18dtd. 15.9.2023for the assessment or the assessment year 2015-16.
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Shri Khub Chand Pandya, ld Sr DR appeared for the revenue and Shri Vinay Goenka,ld AR appeared for the assessee.
The appeal is time barred by 75 days. The assessee has filed condonation petition dated 27.5.2024 supported by affidavit , stating that the delay in filing the appeal before the Tribunal was due to the fact that after corona virus pandemic, the health of the Trustee Mr Anil Kindo started deteriorating day by day and he was suffering from bad health and Alzheimer disease. That due to his bad health, he forgotten to file the income tax appeal before the ITAT. Even otherwise, most of the staff had left their job. It was stated that the delay in filing the appeal be condoned.
After considering the delay condonation petition and hearing ld AR, we are satisfied that the delay in filing was due to reasonable cause. Therefore, we condone the delay of 75 days in filing the appeal and admit the appeal for adjudication.
It was submitted by ld AR that in the course of assessment, the Assessing Officer had made disallowance of Rs.10,35,000/- representing the cash payment paid to labourers in respect of construction of certain building on behalf of the trust by holding that no TDS has been deducted. It was the submission that the impugned assessment year being 2015-16 and the requirement of TDS in the case of trust came into effect w.e.f. 2019-20. It was the further submission that the assessee being a trust is running educational institutions at far of places. The P a g e 2 | 4 assessee trust does not own any vehicles and the trustees of theassessee trust used their own vehicles for the purpose of the trust. It was the submission that one of the trusteehad to run his motor cycle for the trust and certain repairs had been done to that motor cycle to the extent of Rs.1,153/-. It was the submission that said expenditure had been reimbursed by the trust. It was the prayer that the addition made by the AO and confirmed by the ld CIT(A) is liable to be deleted.
In reply, ld Sr DR vehemently supported the orders of the AO and ld CIT(A).
We have considered the rival submissions. A perusal of the provisions of TDS clearly shows that the requirement of deduction of TDS in respect of trust came into effect from assessment year 2019-20. The impugned assessment year in the case of the assessee trust is 2015-16. Consequently, the disallowance of the expenses on account of labourcharges paid in respect of the construction of the school building of the assessee trust as disallowed by the AO and confirmed by ld CIT(A) on account of non-deduction of TDS stands deleted insofar as the provisions for TDS does not apply to the impugned assessment year. Coming to the issue of motor cycle expenses, a perusal of the balance sheet clearly shows that the trust does not own any vehicle. It is also an admitted fact that trustees of the assessee trust have used the motor cycle for the benefit of the trust. The repair charges is only Rs.1,153/- on account of the operation of the vehicle for the trust. As the vehicle has been used for the benefit of the rust, the P a g e 3 | 4 expenditure as incurred by the assessee trust on such vehicle is liable to be allowed. Consequently, the disallowance made by the AO and confirmed by ld CIT(A) stands deleted.
In the result, appeal of the assessee stands allowed.
Order dictated and pronounced in the open court on 9/06/2025. Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi; Dated 09/06/2025 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : Mount Olive Welfare Trust, C/O Mount Olive’s English Medium School, Karamtoli, HO Ghaghra, Gumla-835207 2. The Respondent: Income Tax Officer (Exemption) Ward, Ranchi 3. The CIT(A)-NFAC, Delhi 4. Pr.CIT,Ranchi 5. DR, ITAT, 6. Guard file. //True Copy// By order
Sr.Pvt.secretary ITAT, Ranchi
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