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Facts
The assessee, a trust, claimed a deduction of Rs. 23,72,838/- under Section 80G for donations in its return for AY 2014-15. The return was processed under Section 143(1) by CPC, and the deduction was disallowed because the assessee filed ITR-7 (not eligible), claimed non-existent registration under Section 12A/12AA, and reported nil application of funds under Section 11, leading the AO/CPC to tax the entire receipts.
Held
The tribunal noted that neither the Assessing Officer nor the CIT(A) had properly examined the merits of the Section 80G claim. Consequently, the tribunal restored the issue back to the Assessing Officer for a fresh, independent adjudication and verification of whether the donations were made to an approved trust or institution, providing the assessee three opportunities to present its case.
Key Issues
Whether the disallowance of Section 80G deduction by the CPC/AO was justified, considering the assessee's eligibility, proper filing of returns, and verification of donations to approved institutions.
Sections Cited
143(1), 80G, 12AA, 12A, 11, Chapter VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2014-15 arises against the Addl./JCIT(A)-6, Kolkata’s DIN & order No. ITBA/APL/S/250/2025-26/1082436573(1) dated 10.11.2025, in proceedings u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Coming to the assessee’s sole substantive grievance claiming section 80G deduction of Rs.23,72,838/-, the learned CIT(A) appears to have upheld the Assessing Officer’s action denying the same as under:
“5.1 I have carefully gone through the Intimation u/s 143(1), the grounds of appeal and submission made by the appellant in this regard. Briefly stating facts of the case is that the appellant filed return of income which was processed u/s 143(1) by CPC making certain
1. Lotus Trust adjustments over and above the returned income. The only issue involved in this case is that the appellant which is a Trust had claimed deduction u/s 80G of the Act in the return of income which was disallowed in the Intimation u/s 143(1). 5.2 All the grounds of appeal raised by the appellant are against disallowance of deduction u/s 80G of the I.T. Act Facts involved in the issue is that the appellant had filed return of income in ITR-7 claiming that it is registered u/s 12AA of the Act However, no application of funds as required as per section 11 of the Act was reported and therefore while processing the return u/s 143(1), AO, CPC taxed the entire receipts disclosed in return. Examination of return of income revealed that original return was filed on 29.07.2014 and a rectified return was filed on 23.09.2015 in which the appellant claimed as registered u/s 12A of the Act by certificate dated 11.03.1974. Gross receipts was disclosed at Rs.23,72,838/-. However, at clause 9 of Part B-TI, where the amount applied to charitable activities is required to be given, the appellant reported nil application. But then deduction was claimed under chapter VIA at clause 24 of the said schedule for the amount of Rs.23,72,838/-. During the appellate proceedings, the appellant claimed that although it was not registered u/s 12A, but it was eligible for claiming deduction u/s 80G of the Act towards donation paid to other institutions. Having analysed the facts, I find that the appellant committed mistakes one after another - 1st it filed return in ITR-7 which it was not eligible for, then it stated in ITR that it was registered u/s 12A by certificate dated 11.03.1974 which was non-existent and then disclosed nil amount towards application of funds required u/s 11 of the Act. AO, CPC was therefore justified in disallowing the exemption u/s 11 of the Act and bringing into tax the entire receipts of Rs.23,72,838/-. The appeal is therefore dismissed.”
1. 4. Suffice to say, the Revenue could hardly dispute that neither the assessing nor the lower appellate authority has examined the assessee’s section 80G deduction claim wherein it appears to have filed the corresponding details of donations made to the alleged approved institution. That being the case, this tribunal is of the considered view that the instant issue requires the learned assessing authority independent
1. Lotus Trust adjudication/verification as to whether the impugned claim involves donation made to an approved trust or society or bodies or not, as the case may. The assessee’s instant sole substantive ground is accordingly restored back to the learned Assessing Officer for his afresh appropriate adjudication, within three effective opportunities subject to a rider that the taxpayer shall plead and prove the case at it’s own risk and responsibility, in consequential proceedings. Ordered accordingly.