SACRED HEART EDUCATIONAL RELIGIOUS & CHARITABLE SOCIETY,LUDHIANA vs. INCOME-TAX OFFICER (EXEMPTIONS) WARD, JALANDHAR

The assessee has raised the following grounds of appeal:-

That the Ld. Commissioner of Income- Tax (Appeals) has erred in failing to consider various replies and submissions placed on record in the proceedings before her which is arbitrary and unjustified.

That the order of Ld. Commissioner of Income-Tax (Appeals) is erroneous, arbitrary, opposed to the facts of the case and is unsustainable in law.

That the appellant craves for permission to amend or add any other ground of appeal, before the appeal is finally heard and disposed of.

The brief fact is that the assessee filed its return u/s 139(1). In the income expenditure account, the assessee claimed expenses amount of Rs. 12,46,640/- for payment of direct tax related to financial year 2009-10 relevant to assessment year 2010-11 as utilization/application of income. Accordingly, the Ld. Assessing Officer [in brevity the AO] disallowed the violation of condition of section 12A r.w.s. 11 of the Act regarding 85% utilization for charitable purpose. In fact, the assessee’s gross receipt was amount of Rs. 3,53,58,892.71/- and total utilization of fund amount to Rs. 4,24,89,568.91/- after reducing the income tax paid amount of Rs. 12,46,640/-. This payment of income tax amount to Rs.12,46,640/- was added if the assessee’s total income by the Ld AO. The assessee filed appeal before the ld. CIT(A). But the Ld. CIT(A) did not consider the same and took the income tax liability payment as addition of income and the addition was sustained accordingly.

After the order of the Ld. CIT(A), the assessee filed an appeal before us.

During the hearing the assessee filed a paper book and the following calculation was filed which is reproduced as under:

The assessee’s total utilization of fund after reducing the payment is amount of Rs. 4,24,89,568.91/-. So the assessee’s utilization fund is more than 85% accordingly no violation of section 11 of the Act. In this moment we are not able to verify the details calculation of assessee. So, the direction is made to the Ld. AO to verify the only the utilization of fund in the context of above mentioned discussion.

It is to be directed to the ld Assessing Officer to consider the total utilization of fund of the assessee which is more than 85% of Gross Receipt and calculate the tax accordingly with due consideration of section 11 of the Act after deducting the payment of income tax amount of Rs. 12,46,460/-. So, the ground of the assessee is allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.