Shree Hari Ram Charitable Trust… vs ITO | ITAT Surat 2023

Assessee represented by Shri Tinish R Mody, CA Department represented by Shri Ashok B Koli, CIT-DR Date of hearing 30/12/2022 Date of pronouncement 02/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), (in short, the ld. CIT(A)) dated 29/07/2022 for the Assessment year (AY) 2016-17 wherein the assessee has raised following grounds of appeal: “1. On the facts and in the circumstances of the case, as well as law on the subject, the learned CIT(A)-NFAC, Delhi erred in disposing the appeal without considering the merits on the basis of statement of facts as well as erred in disposing without allowing proper opportunity of being heard.

2. On the facts and in the circumstances of the case, as well as law on the subject, the learned CIT(A)-NFAC, Delhi in confirmation the action of the CPC, Bangalore in not allowing deduction in respect of expenses incurred to the tune of Rs. 1,02,01,770/- u/s 11 of the Act for charitable purpose during the year.

Shree Hari Ram Charitable Trust Vs ITO(E) 3. On the facts and in the circumstances of the case, as well as law on the subject, the learned CIT(A)-NFAC, Delhi erred in confirmation the action of the CPC, Bangalore in not allowing deduction of Rs. 18,36,927/- claimed u/s 11(1)(A) of the Act.”

Brief facts of the case are that the assessee is a charitable trust having registration under Section 12AA of the Income Tax Act, 1961 (in short, the Act) dated 24/03/2017. The assessee filed its return of income on 31/03/2017 declaring NIL income after claiming deduction under Section 10(23C) of the Act of Rs. 1.22 crore. The assessee by mistake claimed deduction under Section 10(23C) instead of Section 11 of the Act. The assessee rectified the said mistake in response to defect notice issued by the CPC and filed fresh return of income on 19/06/2017. The return of assessee was processed by CPC, Bangalore vide order dated 12/07/2019 and claimed the deduction under Section 11 of the Act. The assessee tried to file application under Section 154 for rectification of mistake in the order of CPC, however, such application could not be filed (uploaded on system).

Aggrieved by the additions/disallowance of deduction under Section 11, the assessee filed application before the ld. CIT(A). The appeal of assessee was dismissed by the ld. CIT(A) vide order dated 29/07/2022. Further aggrieved, the assessee has filed the present appeal before the Tribunal.

We have heard the submissions of the learned Authorised Representative (ld. AR) of the assessee and the learned Commissioner of Income Tax- Shree Hari Ram Charitable Trust Vs ITO(E) Departmental Representative (ld. CIT-DR) for the revenue and have gone through the orders of the lower authorities carefully. At the outset of hearing, the ld. AR of the assessee submits that subsequent to filing of this appeal, the assessment order passed by the Assessing Officer is rectified by the Assessing Officer/ITO(E) in the order dated 05/09/2022 and accepted the return of income and granted deduction under Section 11 of the Act and accepted the returned income. The ld. AR of the assessee filed order dated 05/09/2022 passed under Section 154 by Assessing Officer/ITO(E), Surat. The ld. AR prayed that this appeal may be treated as allowed.

On the other hand, the ld. CIT-DR for the Revenue submits that once the order of CPC is rectified by AO/ITO(E) and accepted the returned income, this appeal would not survive and may be dismissed as infructuous.

We have considered the submission of both the parties and find that after filing present appeal before the Tribunal, the Assessing Officer/ITO(E) has passed the following order under Section 154 dated 05/09/2022: “ Rectification Order In this case, the assessee e-filed its return of income for A.Y. 2016- 17 on 31/03/2017 declaring total income of Rs. Nil. The said return of income was processed by the CPC, Bangalore on 12/07/2019 by assessing total income at Rs. 1,22,46,177/- and raising total demand at Rs.53,15,753/-. Now, the assessee has made application on 30/07/2021 in this regard and stated that CPC Bangalore has not considered deduction u/s 11 of the Act due to 10B not filed alongwith return of income. 3 Shree Hari Ram Charitable Trust Vs ITO(E) On verification on e-filing portal, the assessee trust having 12A certificate has filed its 10B delay. In this regard, the assessee has been grant condonation vide order No. CIT(E)/Ahd/119(2)(b)/2022-23 dated 02/09/2022. Therefore, demand raised by CPC in this regard, needs to be rectified. The contention of the assessee in this regard is accepted. The effect of condonation u/s 119(2)(b) granted by the CIT(Exemption), Ahmedabad is being given by rectifying u/s 154 of the Act. Total income of assessee remains unchanged i.e. Nil”

Considering the order of Assessing Officer/ITO(E) in accepting the return of income filed by assessee, thereby allowed full relief to the assessee by allowing deduction under section 11. Therefore, nothing left in this appeal for adjudication as the assessee is already allowed full relief, thus, technically, this appeal has become infructuous. So far as specific prayer of ld. AR of the assessee is that the appeal may be treated as allowed, we are not inclined to give such finding as the relief to the assessee is already granted by the Assessing Officer and there is no need to pass duplicate order on the same issue.

In the result, the appeal of assessee is treated as dismissed being infructuous. Order pronounced in the open court on 02nd January, 2023.

SHREE HARI RAM CHARITABLE TRUST,SURAT vs. ITO EXEMPTION , SURAT