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Facts
The assessee, RD Tata Trust, a registered charitable trust, filed its return of income showing Nil total income, claiming deductions under Section 80G and 80GGA. The Assessing Officer (AO) partially disallowed these deductions, arguing the donations exceeded the 10% limit of gross total income for Section 80G and that Section 80GGA was not claimed separately in the return. The CIT(A) allowed the appeal, directing the AO to re-examine the claim.
Held
The Tribunal held that donations to institutions approved under Section 80G(2)(a)(iiif) are not subject to the 10% limit of gross total income as per Section 80G(4). The Tribunal also found that the assessee had claimed the deduction under Section 80GGA by clubbing it with Section 80G due to the lack of a separate functionality in the ITR, and this claim was acknowledged by the AO in the assessment order.
Key Issues
Whether donations to institutions approved under Section 80G(2)(a)(iiif) are subject to the 10% limit of gross total income under Section 80G(4), and whether the claim for deduction under Section 80GGA was validly made despite being clubbed with Section 80G due to ITR limitations.
Sections Cited
Section 80G, Section 80GGA, Section 80G(4), Section 143(3), Section 12A, Section 11, Section 12, Section 13, Chapter VIA
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI SUNIL KUMAR SINGH, JM Shri Atul T. Suraiya AR
Asst. Commissioner of Income Tax, 26(1), Mumbai [ the Ld. AO] for A.Y. 2017-18 against the appellate order passed by National Faceless Appeal Centre, Delhi [the learned CIT (A)] on 21st September, 2023, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) of The Income Tax Act, 1961 [ the Act] dated 10th December, 2019, passed by the Asst. Commissioner of Income Tax, Circle 17(3), Mumbai was partly allowed.
The learned Assessing Officer is aggrieved with the same and is in 02. appeal raising following grounds of appeal:-
2. Whether on the facts and in the circumstances of the case, the learned CIT (A) erred in allowing deduction under Section 80GCA without considering the fact that the said deduction was not claimed by the assessee in its return of income. Since, the claim not made in the return of income, claim of deduction under Section 80GCA of ₹1,27,02,000/- is not allowable.
3. Whether on the facts and in the circumstances of the case, the learned CIT (A) has not given opportunity to assessing officer on the issue of additional ground taken by assessee with respect to disallowance of carry forward of excess expenditure incurred over income for adjustment in subsequent years and failed to adjudicate properly.”
Brief facts of the case shows that assessee is a charitable trust and is 03. registered with the Charity Commissioner of Mumbai. Assessee has earned interest income from interest on bonds, savings bank interest and interest on deposits. Assessee has already surrendered his registration under Section 12A of the Income-tax Act, 1961 (the Act) and is now assessable as an Association of Person (AOP). Assessee filed its Return of Income [ ROI] at total income of Rs Nil. Wherein it has claimed deduction under Section 80G of Rs 1,42,33,000/- The learned Assessing Officer found that as per the provisions of 04. Section 80G(4), the donation made in excess of 10% of gross total income is to be ignored for the purpose of computation of deduction under Section 80G of the Act. The assessee explained that assessee has given donation to Tata Institute of Social Science which is approved under Section 80G(2)(iiif) of the Act by the Director General of Income Tax Exemption, same is not covered u/s 80 G (4) of the Act and therefore, the deduction is allowable at the rate of 100% of the amount donated without applying the restriction of 10% of the gross total income. The assessee submitted that restriction of 10% of the total income applies to donation under Section 80G(4) of the Act only. However, the learned Assessing Officer rejected the same and restricted the deduction under Section 80G of the Act to the extent of 10% of gross total income.
Assessee has also made claim of deduction under Section 80GGA of 05. ₹1,27,02,000/-. However, as per the claim of the assessee there was no specific column in the return of income separately for section 80GGA of the Act. The learned Assessing Officer found that assessee has mentioned the above donation under Section 80G column of the return. The assessee explained that in the computation of total income assessee has shown the deduction of Section 80GGA separately in the computation. The learned Assessing Officer held that though the deduction to the extent of ₹127,02,000/- has been claimed by the assessee under Section 80GGA of the Act in the
Aggrieved with the above assessment order assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals). With respect to the deduction under Section 80GGA of the Act of ₹1,27,02,000/-, the learned CIT (A) noted that the above amount was clubbed with deduction under Section 80G of the Act in the return of income as there is no separate provision for claiming deduction under Section 80GGA of the Act in ITR filed. He further noted that as the learned Assessing Officer has denied the claim by stating that though same has been claimed in the computation of income but no such claim is made in the return of income filed online. He further held that the assessee has claimed under Section 80GGA of the Act by clubbing it with its claim for deduction under Section 80G of the Act as no separate of functionality was there for claiming the deduction under Section 80GGA of the Act, assessee has submitted the requisite documents in respect of its claim during the assessment The learned Departmental Representative referred to the Provisions 07. of Section 80G(4) and submitted that the donation made in excess of 10% of gross total Income is to be ignored for the purpose of The learned Authorized Representative referred to the order of the 08. learned CIT (A) and submitted that as assessee is not a trust registered under Section 12A of the Act no benefit under Section 11, 12 is allowable to the assessee and therefore, ground no. 3 of the appeal is anfractuous. With respect to the ground no's of the appeal, he submitted that monetary cap of 10% of gross total income is applicable only on the donations specified under Section 80G(4) of the Act. He submitted that the donation is given by the assessee to a trust which is approved as an university under Section 80G (2)(a)(iiif) of the Act as per notification dated 15th December, 1993, to the Tata Institute of Social Sciences. Therefore, the CAP of 10% does not apply. With respect to the ground no's of the appeal, he submitted that assessee has claimed deduction under Section 80GGA of the Act of ₹1,27,02,000/- in the computation of total income. As at that time, there was no functionality available in ITR filed by the assessee to show deduction under Section 80GGA of the Act separately, It clubbed the deduction under Section 80GGA and 80G together. Therefore, the assessee has claimed deduction in the return of income as well as disclosed it in the computation of total income.
We have carefully considered the rival contentions and perused the 09. orders of the lower authorities. We find that the assessee is a public trust registered under the Bombay Public Trust Act, 1950, originally registered under Section 12A of the Act on 10th December, 1990 but subsequently, it surrendered its registration on 26th February, 2015, as it did not want to claim any benefit under Section 11 of the Act. The assessee has earned interest income of ₹247,23,301/-. Out of this interest income, it claimed deduction of ₹1,42,033/- under 80G of the Act and ₹1,27,02,000/- under Section 80GGA of the Act. It was stated that as no separate column was available in ITR filed for section 80GGA of the Act, the assessee clubbed both this deduction together and accordingly, restricted the taxable income to ₹ nil. In
Provision of section 80 G (4) are as under :-
[(4) Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi) 1[, (via)] and (vii) of clause (a) and in 2[clauses (b) and (c)] of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by 3any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1)].
Ground no.2 of the appeal is with respect to the claim of deduction under Section 80GGA of the Act claimed in the return of income which was clubbed with deduction under Section 80G of the Act but shown separately in the computation of total income. The learned CIT (A) has relied upon the CBDT Circular as well as the decision of the Hon'ble Punjab and Haryana High Court and directed the learned Assessing Officer to verify the claim and if same is allowable to the assessee to grant it while passing order giving effect. We find that it cannot be said that assessee has not claimed such deduction in the return of income filed in ITR 5 as same was clubbed with deduction under Section 80G of the Act. This fact is also recorded by the learned Assessing Officer in his assessment order at paragraph no. 9.3. Thus, assessee claimed it in the return of income albeit clubbed it with the different section. However, the deduction is claimed under Chapter VIA of the Act. It is not the claim of the Revenue that in ITR filed by the assessee such functionality was available at that time. In view of this, we do not find any infirmity in the order of the learned CIT (A) in directing the learned Assessing Officer to verify the same and grant in order giving effect to the appellate order if available to the assessee. Therefore, the ground no.2 of the appeal is dismissed.
Ground no. 3 of the appeal is infructuous, as assessee has not claimed benefit of section 11 and 12 of the Act. Therefore, there is no question of granting the benefit of deficit of this year to the assessee to be carried forward in the next year.
Order pronounced in the open court on 21.05. 2024.