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Facts
The assessee, Babu Jagjivan Ram National Foundation, had its exemption under Section 10(26B) withdrawn by the AO via a Section 154 order. The assessee had been claiming and was allowed this exemption from AY 2012-13.
Held
The Tribunal noted that the original assessment order under Section 143(3) had allowed the exemption. The issue of denial of exemption under Section 11 for the same assessment year was pending before the CIT(A). Therefore, to decide the appeal consistently with the outcome of the related appeal, the present appeal was restored to the CIT(A).
Key Issues
Whether exemption under Section 10(26B) can be withdrawn through a Section 154 order when it was allowed in the original assessment and related issues are pending before CIT(A).
Sections Cited
10(26B), 154, 143(3), 11(7), 11, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘A’: NEW DELHI
Before: SHRI C.N. PRASAD & SHRI M. BALAGANESH
ORDER
PER C.N. PRASAD, JM,
This appeal filed by the assessee is preferred against the order of the Commissioner of Income Tax (Appeals)/NFAC [herein after referred as “CIT(A)”] dated 22.11.2024 for the A.Y. 2016-17 in withdrawing the exemption allowed under Section 10(26B) of the Act while passing the order u/s. 154 of the Act.
The learned Counsel for the assessee at the outset referring to page 92 of the paper book submitted that the AO while framing the assessment under Section 143(3) dated 26.11.2018 held that assessee is an autonomous body established by the Government of India under the Ministry of Social Justice and Empowerment and its income is exempt u/s. 10(26B) of the Act be a body set up for promoting interest of Schedule Casts, subsequently the AO denied the exemption by passing order u/s. 154 of the Act dated 18.12.2018. The learned Counsel stated that all along assessee is claiming exemption u/s.10(26B) of the Act and referred to pages -71 and 76 of the paper book which are assessment order for A.Y. 2012-13 and computation of income for A.Y.2013-14 wherein the AO for the A.Y. 2012-13 while passing the assessment order under Section 143(3) dated 02.03.2015 allowed exemption u/s.10(26B) of the Act. The assessee claimed similar exemption in its computation of incomes for the A.Y’s 2013-14 onwards. Therefore, learned Counsel for the assessee stated that when the assessee is claiming exemption u/s.10(26B) and is being allowed by the AO from A.Y. 2012-13 such exemption cannot be withdraw by passing order u/s.154 of the Act since it is not a mistake apparent from record in allowing exemption u/s. 10 (26B) of the Act while completing the assessment u/s.143(3).
On the other hand the learned DR stated that section 11(7) of the Act prohibits the assessee claiming exemption u/s.10(26B) of the Act since the assessee is registered u/s. 12A of the Act.
In reply the counsel for the assessee referring to page 103 which is the drop down window in the return of income for A.Y. 2016-17 stated that in the return Assessee could not claim exemption u/s.10(26B) of the Act since there is no option provided for the claim so the assessee claimed exemption u/s.11 which was denied by the AO while passing the assessment order and appeal is pending before the learned CIT(A) on the denial of section 11 of the Act.
At this stage on a querry from the Bench as to why this appeal should not be send back to learned CIT(A) to decide alongwith main appeal which was filed against the denial of exemption u/s.11 which will have bearing on the appeal before us, the learned Counsel for the assessee and learned DR has expressed no serious objection.
On hearing both the sides and perusing the orders of the authorities below and since main appeal is against the assessment order passed u/s. 143(3) in denying exemption u/s.11 which is still pending before learned CIT(A), we feel it appropriate to restore this appeal also to the file of the learned CIT(A) as the outcome of the appeal against denial of exempt under Section 11 has bearing on this appeal, we restore this appeal to the file of the learned CIT(A) who shall decide alongwith main appeal.
In the result, the appeal of the assessee is allowed for statistical purposes.