INCOMETAX OFFICER, CUTTACK vs. SISHU KALYAN SAMITY SCB, SCB MEDICAL COLLGE CAMPUS,
Facts
The revenue appealed against the CIT(A)'s order deleting additions of Rs. 1,52,64,684/- and Rs. 56,82,948/- made by the AO. The assessee had accumulated funds for the development of a school, but the construction was delayed due to the state government's actions. The assessee kept the funds invested as per the Income Tax Act.
Held
The Tribunal held that the delay in construction was on the part of the state government and the assessee had not violated any provisions of Section 11 of the IT Act. The assessee had kept the funds invested as prescribed and not for other purposes. Therefore, the CIT(A)'s order deleting the additions was well-reasoned.
Key Issues
Whether the CIT(A) erred in deleting the additions made by the AO for non-application of accumulated funds within the prescribed time, despite delays caused by the state government.
Sections Cited
11(2), 11(3), 11(5), Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “CUTTACK BENCH, CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL “CUTTACK BENCH, CUTTACK VIRTUAL HEARING AT KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA No.522/CTK/2025 Assessment Year: 2020-21 ITO, Cuttack Sishu Kalyan Samity SCB Vs Cuttack Sadar, Cuttack, Odisha-753007. (PAN: AAETS1542H) (Appellant) (Respondent)
Assessee by : Shri P. R. Mohanty, AR Revenue by : Shri Shakeer Ahamed, Sr. DR Date of Hearing : 16.03.2026 Date of Pronouncement : 16.03.2026
ORDER PER BENCH: This is an appeal filed by the revenue against the order of the NFAC, Delhi [hereinafter referred to as the ‘CIT(A)’] in appeal no.NFAC/2019-20/10217792 dated 15.07.2025 for the assessment year 2020-21. 2. Shri P. R. Mohanty, AR, represented on behalf of the assessee and Shri Shakeer Ahamed, Sr. DR represented on behalf of the revenue.
In the revenue’s appeal, the revenue has raised the following grounds of appeal:
ITA No.522/CTK/2025
3.1 It was the submission by the ld. DR that in the course of assessment, it was noticed that the assessee was accumulated substantial funds for development of a school. It was the submission that the assessee has not used the said funds for the development of school. It was the submission that consequently, the Assessing Officer
ITA No.522/CTK/2025 disallowed the assessee’s claim in regard to an amount of Rs.1,52,64,684/- and an amount of Rs.56,82,948/-. It was the submission that the amount of Rs.56,82,948/- was accumulated from F.Y 2013-14 and the same has not been spent within the time prescribed under the Act. It was the submission that the amount of Rs.56,82,948/- has not been used within the prescribed time and therefore, the assessee is not entitled to the benefit of exemption of the said amount.
In reply, the ld. AR drew our attention to para 15.8 of order of the ld. CIT(A). It was the submission that the details have been produced before the Assessing Officer and the ld. CIT(A). The ld. AR further submitted that the income accumulated by the assessee for the F.Y 2019-20 is liable for exemption since the amount is earmarked and allowable for the charitable or religious purpose. It was the submission that there was a delay on the part of the state government to hand over the newly constructed building and the entire accumulation has been kept in the form of fixed deposits as per the requirement and the same is to be spend/expended as per the estimated plan and program of construction and infrastructures developments. It was the submission that the ld. CIT(A) in para 15.8 has considered all these facts and has given a conscious decision that there was no intention to violate by the assessee. Only because of the state govt. delay and compelling situation, the accumulated fund could not be utilized for the purpose it was accumulated but kept invested in the prescribed form under the provisions of section 11(5) of the Act. It was the submission that the order of the ld. CIT(A) is liable to be upheld.
We have considered the rival submissions. A perusal of the facts in the present case shows that the new building was being constructed for medical college and hospital is a known fact. The delay in the
ITA No.522/CTK/2025 construction admittedly is on the part of the state government. The assessee has done nothing to violate the provisions of section of 11 of I.T Act. The assessee was unable to proceed with charitable activity because of the delay from the part of the state government in allotting the new building. The assessee has in fact kept the funds in the form as prescribed in I.T. Act and has not also used the said amount for any other purposes. This being so, it is noticed that the order of the ld. CIT(A) is well-reasoned and does not call for any interference. In our considered view, both the additions of Rs.1,52,64,684/- and Rs.56,82,948/- were rightly deleted by the ld. CIT(A) and the order of the ld. CIT(A) stands confirmed.
In the result, the appeal of the revenue is dismissed.
Kolkata, the 16th March, 2026.
Sd/- Sd/- [Rajesh Kumar] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member
Dated: 16.03.2026. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR),
//True copy// By order Assistant Registrar
