GURDWARA SRI GURU HARGOBIND SAHIB,CHANDIGARH vs. INCOME TAX OFFICER, WARD 5(5), CHANDIGARH , CHANDIGARH

The brief facts of the case are that during the year under consideration, the assessee was not registered as charitable trust u/s 12A of the Income Tax Act. The assessee claimed deduction u/s 11 of the Income Tax Act, however, the same was denied by the Assessing Officer. However, while the computingthe taxable income of the assessee, the Assessing Officer added the entire receipts without deduction of the claim of expenditure.

Being aggrieved, the assessee preferred the appeal before the ld. CIT(A) which was delayed by 105 days.It was pleaded before the ld. CIT(A) that the delay had occurred due to change of the management of the assessee trust. The ld. CIT(A) admitted the said appeal and condoned the delay. However, on merits, he declined the plea of the assessee that assessee is entitled to the deduction of expenditure for the purpose of computation/assessment of its income.

I have heard the rival contention and gone through the record. It is the basic principle for the levy of income tax that the taxes are to be leviedon the net income after deduction of expenditure from & 584/CHD/2024 Gurdawar Sri Guru Hargobind Sahib v. ITO 3 the total receipts. Therefore, the denial of deduction of expenditure on the part of the lower authorities is wrong and illegal. I, therefore, set aside the impugned order of the ld. CIT(A) and direct the Assessing Officer to duly consider the contention of the assessee to examine the records and ensure that only the net total income of the assessee is taxed after deduction of the admissible expenditure.

The facts and issue involved in this appeal are identical to that have been discussed above in ITA No. 584/CHD/2024. The only distinction is that the Ld. CIT(A), in this case, has not condoned the delay in filing the appeal. Considering the facts and circumstances of the case, the delay in filing the appeal before the ld. CIT(A) is condoned. In view of my findings given above, the impugned order of the ld. CIT(A) is set aside and the matter is restored to the file of the Assessing Officer with a direction to pass a fresh assessment order in terms as indicated above while adjudicating ITA No. 584/CHD/2024.

In the result, both the appeals filed by the assessees are treated as allowed for statistical purposes.