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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
This appeal by the assessee is directed against the order of the NFAC, Delhi dated 04.10.2023 pertaining to A.Y 2017-18.
The grounds raised by the assessee read as under:
Page 1 of 7 “1. That the assessment order dated 19.12.2019 passed under Section 143(3) of the Income Tax Act, 1961 ('the Act') by the Income Tax Officer Ward Exempt 1(1), Delhi ('AO') for Assessment Year ('AY') 2017-18, and the additions/disallowances made therein are illegal, bad in law, and without jurisdiction.
2. That the additions/disallowances made by the Assessing Officer are illegal and bad in law and the National Faceless Appeal Centre ('NFAC') has erred in law and on facts in partly confirming the additions/disallowance vide order dated 04.10.2023 passed under Section 250 of the Act.
That in view of the facts and circumstances of the case and in law, the AO has erred in facts and in law by assessing the total taxable income of the Appellant at Rs. 1,73,60,000/- as against the returned income of Rs. 48,95,770/-.
That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding the view taken by the AO by not treating the amount of Rs. 1,33,82,049/- as the application of income and denying the benefit available under Section 11 of the Act on the said amount.
5. That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding the view taken by the AO by not allowing the option exercised by the Appellant as per clause (2) of the Explanation to sub-section (1) of Section 11 of the Act.
6. That the documents, explanations filed by the Appellant, and the material available on record have not been properly considered and judicially interpreted and have been wrongly ignored.
7. That in view of the facts and circumstances of the case, the Assessing Officer has erred in law and on facts in charging the interest under Sections 234B, & 234C of the Act.
That in view of the facts and circumstances of the case, the Assessing Officer has erred in law and on facts in initiating the penalty proceedings against the Appellant under Section 270A of the Act.
9. The Appellant craves leave to add to, alter, amend, and/or withdraw any ground or grounds of appeal either before or during the course of hearing the appeal.”
3. Grounds Nos 1 to 3 are general in nature.
4. Ground Nos. 4, 5 and 6 relate to the denial of benefit u/s 11 of the Income-tax Act, 1961 [the Act, for short].
Brief facts of the case are that the assessee is a Trust whose objective is to foster and develop fine and applied arts in India and to promote their study and appreciation by means of Publications, Lectures, Conferences, Demonstrations, Exhibitions, Correspondence with kindred societies and with Museums of Art in India and abroad and to collect literary records relating thereto and to any other branch of Indian Art and Culture, to organize and establish a National Art Gallery in New Delhi and to help in establishing Regional Art Galleries, to publish "Roopa-Lekha" illustrated Arts & Crafts.
The assessee filed its original return of income for A.Y. 2017-18 on 31/10/2017 declaring Rs. NIL income. The assessee filed revised return of income on 13/02/2019 declaring Rs. 48,95,770/- income. The case was selected through CASS.
In the course of assessment proceedings, the Assessing Officer show caused as to why the income of the trust be not recomputed in view of the fact that the assessee had claimed revenue expenditure at Rs.2,87,94,784/- which was in excess by Rs. 48,05,985/- and proposed to restrict the same to Rs. 2,39,88,799/- as against the amount claimed at Rs. 2,87,94,784/. He AO finally assessed the total income of the assessee at Rs. 1,73,60,000/- as unutilized amount u/s.11(3) of the Act.
8. On appeal before the CIT(A), the CIT(A) rejected the submission of the assessee that the assessee society had exercised the option as per the clause (2) of the Explanation to subsection (1) of section 11 of the Income-tax Act, 1961 and the assessee has also submitted Form No.9A in this regard before the AO, by saying that the fact of filing of Form 9A before the AO, is not present in the assessment order. The CIT(A) further held that the assessee has not clarified as to whether the Form No.9A was filed with the original return or with the revised return nor a copy of the Form No.9A has been filed during the appellate proceedings for verification as the AO does not seem to have examined it. Page 4 of 7
Now the assessee is in appeal before us against the above action of the ld. CIT(A).
We have heard the rival submissions and have perused the relevant material on record. We find that the assessee had filed form No. 9A vide acknowledgement No. 276581851311017 dated 31.10.2017 which was filed alongwith the original return for A.Y 2017-18 which was filed on 31.10.2017. Considering the facts and circumstances of the case and in view of the fact that Form 9A was filed alongwith return filed u/s 139(1) of the Act, which has not been considered and examined by the AO, we are of the considered view that the issue of exercising the option as per the clause (2) of the Explanation to subsection (1) of section 11 of the Income-tax Act, 1961 as per the Form No.9A be set aside to the file of the AO for examination and fresh adjudication.
In view of the above, the AO is directed to examine the Form 9A and adjudicate the issue afresh after affording adequate opportunity to the assessee to file its submissions and the assessee is directed to present documents/evidence as required by the authorities. The grounds are allowed for statistical purposes. allowed for statistical purposes. Page 5 of 7 Order pronounced in open court on 28.08.2025.