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Facts
The assessee society filed two appeals belatedly for AY 2015-2016 and AY 2017-2018 against orders that denied exemption claimed under section 10(23C)(iiiad) of the Act. This denial was done by the CPC through an intimation under section 143(1) of the Act, treating the entire gross receipts as taxable income.
Held
The Tribunal held that the denial of exemption and taxing the entire gross receipts by the CPC under section 143(1) of the Act was beyond its powers. If the Revenue wished to deny the exemption, it should have proceeded under section 143(3) of the Act to assess the real income.
Key Issues
Whether the CPC can deny exemption under section 10(23C)(iiiad) and tax gross receipts via a section 143(1) intimation, or if it requires assessment under section 143(3).
Sections Cited
10(23C)(iiiad), 143(1), 143(3), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MADHUSUDAN SAWDIA
O R D E R Per Bench : These two appeals are filed by the assessee against the separate orders of the Ld.Addl./JCIT(A)-11, Delhi, dated 29.08.2024 and the order of the ld. Addl./JCIT(A) Faridabad, dated 20.03.2025 for the assessment years 2015-2016 & 2017-2018, respectively.
Both the appeals of the assessee have been filed belatedly. In this regard, the assessee has filed an affidavit stating therein sufficient reasons for delay in filing the appeal before the Tribunal, which are not found to be false. Ld. Sr. DR did not object to condone the delay. Accordingly, we condone the delay in filing both the appeals before the Tribunal and both appeals of the assessee are admitted for hearing.
1. (AY : 2015-2016) 3. First, we shall take up the appeal of the assessee in filed for A.Y.2015-2016, wherein it was submitted by the ld. AR that the appeal against the order u/s.143(1) of the Act for the A.Y.2015-2016 issued by the CPC, which has been confirmed by the ld. CIT(A). It was the submission that the CPC has denied the exemption claimed by the assessee u/s.10(23C)(iiiad) of the Act and taxed the entire receipt of the assessee as the income in the hands of the assessee. The denial of exemption u/s.10(23C)(iiiad) of the Act and taxing the entire gross receipts of the assessee is beyond the power of CPC u/s.143(1) of the Act. Therefore, it is submitted that the intimation issued u/s.143(1) of the Act is liable to be quashed and in consequence thereof the order passed by the ld. CIT(A) deserves to be dismissed.
In reply, ld. Sr. DR vehemently supported the orders of the CPC and ld. CIT(A).
We have considered the rival submissions. A perusal of intimation u/s.143(1) of the Act shows that the CPC has denied the exemption claimed by the assessee u/s.10(23C)(iiiad) of the Act and taxed the entire receipt of the assessee as the income in the hands of the assessee. The denial of exemption u/s.10(23C)(iiiad) of the Act and taxing the entire gross receipts of the assessee is beyond the power of CPC u/s.143(1) of the Act. If the Revenue desires to deny the assessee the benefit of exemption, then the option available to the Revenue was to assess the real income of the assessee u/s.143(3) of the Act instead of treating the entire gross receipt as income in the hands of the assessee u/s.143(1) of the Act. As the intimation issued u/s.143(1) of the Act taxing the gross receipts is not in line with the provisions of section 143(1) of the Act, the intimation u/s.143(1) of the Act stands quashed. Accordingly, the order of the ld. CIT(A) is also set aside.
(AY : 2017-2018) 6. In regard to appeal of the assessee i.e. filed for the assessment year 2017-2018, it was submitted by the ld. AR that the said appeal is against the order passed u/s.154 of the Act arising out of the intimation issued u/s.143(1) of the Act. In the said intimation, the CPC has denied the exemption claimed by the assessee u/s.10(23C)(iiiad) of the Act and taxed the entire receipt of the assessee as the income in the hands of the assessee. Under the identical facts, we have quashed the intimation of CPC issued u/s.143(1) of the Act in (AY:2015-2016). As the facts of the case in present appeal are identical to the facts of the case in our observation and findings in for the assessment year 2015-2016 shall apply mutatis mutandis to this appeal i.e. ITA No.771/CTK/2025 (AY: 2017-2018) also. Therefore, the intimation of CPC u/s.143(1) of the Act and consequential order of the ld. AO u/s.154 of the Act are hereby quashed. Accordingly, the order of the ld. CIT(A) is also set aside.