HANUMAN SEVA CHARITABLE TRUST,KOLKATA vs. ADIT, ITD, BENGALURU

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ITA 727/KOL/2024Status: DisposedITAT Kolkata04 July 2024AY 2020-21Bench: Shri Rajpal Yadav, Vice-President (KZ), Shri Rajesh Kumar (Accountant Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(Appeals) was competent to rectify the error. It set aside the impugned orders, remanding the issue to the Assessing Officer to allow the assessee an opportunity to explain its status and eligibility for Sections 11 & 12 benefits.

What were the facts?

The assessee, a charitable trust, mistakenly declared its status as 'Company' in its income tax return, leading the CPC to disallow benefits under Sections 11 & 12. The CIT(Appeals) upheld this disallowance, suggesting a revision or appeal to the Board.

What were the issues?

Whether the CIT(Appeals) could rectify an error in the assessee's status declared in the return, and whether the disallowance of benefits under Sections 11 & 12 was justified without giving the assessee an opportunity to explain.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 143(1),Section 154,Section 119

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar

Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals) dated 29th January, 2024 passed for assessment year 2020-21.

1.

(A.Y. 2020-2021) Hanuman Seva Charitable Trust 2. The Registry has pointed out that the appeal is time barred by 10 days. In order to explain the delay, the assessee has filed an affidavit of Shri Vikash Nangalia of Hanuman Seva Charitable Trust. In this affidavit, it has been deposed that he was advised by the Tax Consultant to file a rectification application under section 154 of the Income Tax Act and the Trust was exploring that remedy before filing the appeal. This step made the appeal time barred by 10 days.

3.

On due consideration of the above facts and circumstances, we find that assessee was prohibited by a reasonable cause in filing the appeal after expiry of limitation before the Tribunal. We condone the delay and proceed to decide the appeal on merit.

4.

The grievance of the assessee is that the CPC, Bengaluru has erred in making a disallowance of Rs.58,11,041/-. It has further submitted that this disallowance has been confirmed by the ld. CIT(Appeals).

5.

The ld. Counsel for the assessee submitted that the assessee- Trust was enacted on 15th October, 2009. It was granted registration under section 12AA on 22.03.2013. It has filed its return of income electronically on 29.12.2020. In the return, the Tax Consultant has wrongly mentioned the status of the assessee- Trust as a “Company”. Due to this, the CPC has made adjustment and did not grant the benefit of Sections 11 & 12 of the Income Tax Act.

(A.Y. 2020-2021) Hanuman Seva Charitable Trust 6. Dissatisfied with this, the assessee carried the matter in appeal. It has appraised the ld. CIT(Appeals) about the error committed by the assessee while filing the return. The ld. 1st Appellate Authority did not entertain this ground of appeal and observed that if status of the assessee was wrongly mentioned as a ‘Company’, then CPC is competent to make adjustment. The ld. CIT(Appeals) discussed the jurisprudence of 143(1) and further observed that the assessee should revise the return and in case, the time limit to revise has gone, then should approach the Board under section 119 of the Income Tax Act.

7. With the assistance of ld. Representatives, we have gone through the record carefully. It is pertinent to note that once a Trust is registered under section 12AA, then its status should be updated along with PAN data. If an assessee has committed an error, then that should have been first processed and proposed disallowance ought to be intimated to the assessee while processing the return under section 143(1) of the Income Tax Act. The ld. CIT(Appeals), as an Appellate Authority, was duly competent to rectify any error crept in the record, even at the instance of assessee. The rectification can be made on the application of the assessee and it is not confined to the errors committed by the ld. Assessing Officer only. Therefore, we are of the view that the impugned orders are not sustainable. We set aside both the impugned orders. We relegate this issue to the file of ld. Assessing Officer for adjudication. The ld. Assessing Officer shall grant an opportunity to the assessee to explain its status and (A.Y. 2020-2021) Hanuman Seva Charitable Trust then after considering the registration granted to it decide whether benefit of Sections 11 and 12 is admissible to the assessee or not.

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