BOMBAY SUBURBAN ART AND CRAFT EDUCATION SOCIETY,MUMBAI vs. ITO (E) 1(1), MUMBAI

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ITA 7126/MUM/2014Status: DisposedITAT Mumbai29 December 2016AY 2011-125 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the Form 10 was likely filed incorrectly based on gross receipts. Therefore, in the interest of justice, the assessee was allowed to furnish the correct Form 10 and other relevant documents.

What were the facts?

The assessee, a charitable trust, filed its return declaring Nil income. The Assessing Officer and CIT(A) computed taxable income, disallowing certain expenses and donations. The assessee argued that its income and expenditure accounts were prepared on a gross basis, leading to an incorrect Form 10 filing.

What were the issues?

Whether the assessee's application of income and claim for exemption under Section 11 were correctly computed, and if the incorrect filing of Form 10 warrants a remand for fresh assessment.

Which sections of the Income-tax Act were involved?

Section 11(1)(a),Section 11(2),Section 12A,Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: SHRI G.S.PANNU, AM & SHRI AMARJIT SINGH, JM

For Appellant: Shri Sanjay Sawant
Hearing: 29.09.2016Pronounced: 29.12.2016

Assessee by: Shri Sanjay Sawant Department by: Shri M. Rajan सुनवाईकीतारीख / Date of Hearing: 29.09.2016 घोषणाकीतारीख /Date of Pronouncement: 29.12.2016 आदेश / O R D E R

PER AMARJIT SINGH, JM:

1.

The assessee has filed the present appeal against the order dated 05.09.2014 passed by the Commissioner of Income Tax (Appeals) - 1, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the assessment year 2011-12.

2.

The assessee has raised the following grounds:-

A.Y. 2011-12 “1. The lower authorities grossly erred in appreciating the facts and wrongly computed the alleged taxable income at Rs.2,05,41,560/- by the Assessing Officer and Rs.1,38,00,629/- by CIT(A) 1.

2. They totally failed to appreciate that as against the income of Rs.6,36,10,397/- the trust has applied Rs.6,79,05,627/- u/s.11(1)(a) (thus more than 85%) and there was no question of seeking accumulation u/s.11(2) of the IT Act, 1961.

3. The lower authorities failed to appreciation that even capital expenditure qualifies as “applied on the objects of the trust” u/s.11(1)(a) and thus ignoring the capital expenditure of Rs.1,57,27,460/- incurred on the objects of the trust.

4. The lower authorities erred in treating as income the donation by Spanco Ltd. of Rs.1 crore and Neisa Laser Centre of Rs.10 Lakhs on the ground that there was no specific direction by the Donor.

5. Without prejudice to the above and assuming without admitting that it was not towards corpus, the lower authorities ought to have held that the Trust has still spent / applied more than 85% of its income and thus there was no taxable income as per s.11(1)(a).

3. The brief facts of the case are that the assessee filed its return of income for the A.Y.2011-12 on 30.09.2011 along with the Income and Expenditure Account, Balance Sheet and Audit Report in Form No.10B declaring total income to the tune of Rs.Nil. The assessee trust is registered as a Charitable Organisation with DIT(E), Mumbai u/s. 12A of income of the Income Tax Act, 1961( in short “the Act”) vide registration No. INS/3823 dated 15.04.1980. The case was selected for scrutiny and notices u/s.143(2) and 142(1) of the Act A.Y. 2011-12

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