Loading judgment…
Facts
The assessee, a charitable trust, claimed deduction for accumulation of income under Section 11(2) by filing Form 10. The Assessing Officer denied this deduction, citing multiple purposes mentioned in Form 10 and lack of response to notices. The CIT(A) upheld this disallowance. The assessee's representative argued that the online portal had character limits for describing the purpose, and notices were missed due to reliance on a tax consultant.
Held
The Tribunal, considering the interest of natural justice and the submissions made, found it appropriate to grant the assessee one more opportunity to present its case before the Assessing Officer.
Key Issues
Whether the denial of deduction for accumulation of income under Section 11(2) was justified, considering the portal limitations for Form 10 and the circumstances of non-response to notices.
Sections Cited
Section 11(2), Section 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI B.R. BASKARAN & MS. KAVITHA RAJAGOPAL
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the order dated 09.11.2023 passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi (in short ‘CIT(A)’) and it relates to A.Y 2016-17.
The assessee is aggrieved by the decision of learned CIT(A) in confirming the order of Assessing Officer in denying deduction for accumulation of income under Section 11(2) of the Income Tax Act, 1961 (in short ‘the Act’).
Think Foundation 3. The assessee is a charitable trust registered under Section 12A of the Act. It conducts blood donation drives and also carries on structured programme for prevention of Thalassemia Major by creating awareness and providing facility for testing of Thalassemia disease. In the return of income filed for the year under consideration, the assessee claimed deduction for accumulation of income of Rs.87 lacs under Section 11(2) of the Act by filing Form no.
The Assessing Officer denied deduction for accumulation on the reasoning that the assessee has mentioned multiple purpose in Form No.10 and further, it did not respond to the notice issued by him. The Ld CIT(A) also confirmed the disallowance in an ex-parte order passed by him.
The Ld A.R submitted that the assessee had duly submitted that Form no. 10, seeking deduction towards accumulation of income under Section 11(2) of the Act. However, the income tax portal could accommodate maximum of 200 characters for filling up the purpose of accumulation. Hence the purpose of accumulation could not be fully described therein. Since the assessee did not file any explanation before the Assessing Officer, he has denied the deduction under Section 11(2) of the Act. The assessee also did not appear before the learned CIT(A) and hence the learned CIT(A) confirmed the disallowance made by the Assessing Officer and an ex parte order was passed by him.
The learned AR submitted that assessee is a charitable organization and was dependent upon its tax consultant for dealing with income tax matters. The notices were issued by the tax authorities in ITBA portal, which were not noticed by the tax consultant of the assessee. Hence the assessee was not aware of the notices and accordingly could not respond to the notices issued by the tax authorities. Accordingly, the learned AR pleaded that, considering the objects
Think Foundation carried on by the assessee, the Tribunal may be pleased to grant one more opportunity to the assessee for presenting the facts properly before the Assessing Officer.
We heard the learned DR and perused the record. Having regard to the submissions made by the learned AR, we are of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to present its case properly before the Assessing Officer. Accordingly, we set-aside the order passed by the learned CIT(A) and restore all the issues to the file of Assessing Officer for examining them afresh. We also direct the assessee to fully co-operate with the Assessing Officer for expeditious completion of the assessment proceedings.
In the result, appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 10th May, 2024.