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Facts
The assessee, a trust, filed its return of income declaring Nil and claimed 15% of income for charitable purposes. However, the figure was wrongly entered in column 9(iv) instead of 9(v) in the return. The CPC disallowed the claim for not filing Form 9A and the CIT(A) confirmed this.
Held
The Tribunal held that the claim for statutory deduction under Section 11(1)(a) cannot be disallowed merely due to the incorrect column entry, especially when it is apparent from the audit report. The incorrect placement of the figure did not negate the claim itself.
Key Issues
Whether the claim for 15% deduction for charitable purposes can be disallowed due to incorrect entry in the return form when the claim is otherwise valid and supported by the audit report.
Sections Cited
11(1)(a), 143(1)
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI JAGADISH
ASAN Memorial Association, The Dy. Commissioner of 1, Cochin House, Anderson Road, Vs. Income Tax (Exemptions), Egmore, Chennai-600 006. Chennai. [PAN: AAATA 0265B] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथI की ओर से/ Appellant by : Shri R. Venkataraman, CA KLथI की ओर से /Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/Date of Hearing : 23.10.2024 घोषणा की तारीख /Date of Pronouncement : 23.10.2024 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid two appeals filed by the assessee are against the common order of Learned Commissioner of Income Tax, Appeal, ADDL/JCIT(A), Faridabad [hereinafter “CIT(A)”] for Assessment Years 2016-17 & 2017-18 dated 29.03.2024 vide intimations u/s143(1) of the Income-tax Act, 1961 (hereinafter “the Act”) issued by the CPC, Bengaluru dated 17.03.2018 & 27.03.2019. & 1987/Chny/2024 :- 2 -:
The facts in both the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal in for A.Y 2016-17 as lead case.
The assessee is a trust and filed its return of income on 01.09.2016 declaring total income at Nil. The assessee in the return of income in part B-TI, in column of clause 9(v) amount accumulated or set apart for application to charitable purpose to the extent it does not exceed 15% of income derived from property held in trust/institution u/s. 11(1)(a)/11(1(b) (restricted to the maximum of 15%) has mentioned ‘0’ in place of Rs. 5,30,42,826/-, which is 15% of the income derived and statutory allowed. The assessee has wrongly filed this figure in column 9 (iv). The CPC in the order u/s. 143(1) of the Act has not allowed the 15% statutory direction of Rs. 5,30,42,826/- as same was not filled in column 9(v). The CPC in the reason has mentioned that the assessee has not submitted form 9A which is required to claim the deduction filled in column 9(iv). The Ld. CIT(A) has confirmed the addition as the assessee has not filed Form 9A as required to claim deduction as mentioned in column 9(v) and dismissed the appeal. & 1987/Chny/2024 :- 3 -:
The Ld. Authorized Representative (AR) of the assessee has contended that the assessee is entitled to claim 15% of income derived as per Section 11(1) but has wrongly filled this figure in column 9(iv) rather than filling it in column 9(v). The Ld. AR has submitted that the Ld. CIT(A) presuming that the claim has been made under 9(iv) has upheld the adjustment made by CPC for not filing Form 9A. The Ld. AR has argued that there is no requirement of filling Form 9A to claim 15% of statutory deduction and the CPC has disallowed as this amount was wrongly filled in Column 9(iv).
The Ld. Departmental Representative, on the other hand, supported the orders of the authorities below.
We have heard the rival submissions and perused the materials available on record. The assessee in Part B-TI in the return of income in column 9(v), for amount accumulated or set apart for application to charitable purposes to the extent of 15% has filled “0” in place of Rs. 5,30,42,826/- which is wrongly filled in column 9(iv). We agree with the submission of Ld. AR that the claim of statutory deduction cannot be disallowed merely because the figure was put in column 9(iv) in & 1987/Chny/2024 :- 4 -: place of 9(v) , and the same is apparent from audit report filed along with return. In view of the above, we set aside the order of Ld CIT(A) and the CPC and direct AO to allow the claim as per section 11(1)(a) . Hence, the appeal filed by the assessee is allowed for statistical purposes.
A.Y 2017-18: 7. We find that the identical issue is involved in assessee’s appeal for A.Y 2017-18 also and accordingly, our adjudication above in A.Y 2016-17 is mutatis mutandis applies therein also. Therefore, for the similar reasons, we direct the A.O to allow the claim as per section 11(1)(a) .
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 23rd October, 2024. (महावीर िसंह) (जगदीश) (Jagadish) (Mahavir Singh) लेखा लेखा सद"य लेखा लेखा सद"य /Accountant Member उपा" / Vice President सद"य सद"य चे"ई/Chennai, "दनांक/Dated: 23rd October, 2024. EDN/- & 1987/Chny/2024 :- 5 -: