ALL INDIA FINE ART AND CRAFTS SOCIETY ,NEW DELHI vs. ITO, WARD EXPEMPT 1(1), DELHI, NEW DELHI

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. 8. 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.”

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]. 5. 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. 7. 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.

Now the assessee is in appeal before us against the above action of the ld. CIT(A). 10. 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. 11. 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. 12. In the result, appeal of assessee in ITA No. 3730/DEL/2024 is allowed for statistical purposes.