Appeal details
Counselvise Citation
[2024] 130 COUNSELVISE.COM (IT) 2571 (ITAT-JODHPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-12-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
15-10-2024
Assessment Year
2020-2021
Appeal Filed On
21-03-2024
Judgement Text
"IN THE INCOME TAX APPELLATE TRIBUNAL \nJODHPUR BENCH, JODHPUR. \n \nBEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & \n SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER \n \nI.T.A. No. 169/Jodh/2024 \nAssessment Year: 2020-21 \n \n Shiksha Samitee Bal Niketan \nVeer Durgadas Nagar, Pali. \n [PAN: AAUTS1829F ] \n(Appellant) \nVs. The ITO, \nWard- Exemption, \nJodhpur. \n(Respondent) \n \n \nAppellant by \nSh. P.C. Parwal, FCA \nRespondent by \n Sh. Karni Dan, Addl.CIT \n \nDate of Hearing \n15.10.2024 \nDate of Pronouncement \n 26 .12.2024 \n \nORDER \nPer: DR. S. Seethalakshmi, JM: \nThis appeal is filed by the assessee against the order of the Ld. Addl. \nCIT(A)-13, Mumbai dated 08.02.2024 for the assessment year 2020-21. \n2. \nIn this appeal, the assessee has raised following grounds: - \n“1. The Ld. CIT(A) has erred on facts and in law in dismissing the appeal without \nproviding adequate opportunity of hearing. \n \n2. The Ld. CIT(A) has erred on facts and in law in dismissing the appeal by holding \nthat since assessee has filed application for condonation of delay in filing Form No. \n10B with PCIT(Exemption), Delhi, the grounds of appeal taken by the assessee is \ninfructuous at this stage. \n \n3. The Ld. CIT(A) has erred on facts and in law in not deciding the ground of assessee \nthat against the gross receipt of Rs. 1,13,74,839/-, the revenue expenditure including \ndepreciation is Rs. 1,28,21,052/- and therefore income assessed at Rs. 1,13,74,839/- \nin the intimation u/s 143(1) without allowing the expenditure is against the provisions \nof the Act. \n\n ITA No. 169/Jodh/2024 \n Shiksha Samitee Bal Niketan \n \n2 \n \n \n \n3. \nBrief facts of the case are that the assessee is a charitable trust \nregistered u/s 12AA of IT Act, 1961 by CIT(E), Jaipur vide order dated \n27.08.2018. In pursuance of its object, it is imparting education. The \nassessee filed its return of income on 12.02.2021 at Nil income after \nclaiming exemption u/s 11 of the Act at Rs.1,13,74,839/-. For claiming \nthe exemption, as required by section 12A(1)(b) it obtained the tax audit \nreport in Form No. 10BB (required for claiming exemption u/s 10(23C)) \ninstead of in Form No. 10B (required for claiming exemption u/s 11) \nand upload it on the e-portal on 15.01.2021. The ld AR claimed that the \nAO(CPC) processed the return of assessee and issued intimation u/s \n143(1) dated 30.11.2021 assessing the total income at Rs.1,13,74,839/- \nby denying exemption u/s 11 on the ground that audit report was \nobtained in Form No. 10BB instead of Form No.10B. This fact came to \nthe notice of assessee when e-filing portal was browsed on 25.09 2022. \nAccordingly assessee obtained the audit report in Form No.10B and \nfiled the same on 28.10.2022. Simultaneously assessee also filed the \napplication for condonation of delay u/s 119(2)(b) with PCIT(E), Delhi. \n4. \nIt is noted that against intimation assessee filed appeal before \nNFAC on 01.11.2022 with the request to condone the delay in filing the \nappeal. The Ld. Addl. CTT(A), NFAC issued notice dated 09.01.2024 \nu/s 250 of the Act. In response to the same assessee filed the \n\n ITA No. 169/Jodh/2024 \n Shiksha Samitee Bal Niketan \n \n3 \n \nadjournment on 24.01.2024 (PB 1-2) with the request to keep the appeal \npending till the receipt of final order for condonation of delay. The ld. \nAddl. CIT(A) NFAC dismissed the appeal filed by the assessee by \nholding that since assessee has filed an application for condonation of \ndelay in filing Form No 10B before PCIT(Exemption), Delhi which is \npending yet, the appellant may follow up for further procedure before \nthe jurisdictional Assessing Officer for further remedial action u/s 154 \nof the Act after receiving the order from the jurisdictional CIT without \ndisposing the another ground taken by the assessee is taxing the gross \nreceipt on merit. \n5. \nBefore us, the ld.AR of the assessee has filed the following written \nsubmission with the prayer to direct the AO to assessee the total income \nat loss of Rs.14,46,213/- \n‘’Submission:- \n \n1. From the above facts it can be noted that against the notice dt. 09.01.2024 issued by \nLd. CIT(A), assessee has filed the adjournment on 24.01.2024 (PB 1-2). The Ed. \nCIT(A) without issuing any further notice dismissed the appeal filed by the assessee. \nThus the order passed by the Ld. CIT(A) dismissing the appeal without providing \nadequate opportunity of hearing of illegal & bad in law. \n \n2. The Ld. CIT(A) dismissed the appeal without deciding one of the ground taken by \nthe assessee in not allowing the revenue expenditure of Rs.1,28,21,052/- for earning \nthe gross receipt of Rs.1.13,74,839/- in assessing the total income. This ground has no \nrelation with the condonation application filed by the assessee before PCTT \n(Exemption). Delhi. Thus the Ld. (CIT(A) has erred in not deciding this ground of \nappeal and dismissing the appeal filed by the assessee as infructuous. \n3. It is submitted that the lower authorities have assessed the gross receipt as income \nignoring the expenditure incurred by the assessee. From the Income & Expenditure \n\n ITA No. 169/Jodh/2024 \n Shiksha Samitee Bal Niketan \n \n4 \n \nNe placed at PB 7, it can be noted that against the gross receipt of Rs. 1.13,74,839/-\nreceived by way of fees & other receipts, expenditure incurred for earning such \nreceipt is Rs 1,28,21,052/-. If the income of assessee is to be computed without \nallowing exemption w/s 11, there would be deficit of Rs. 14,46,213/-. Therefore, the \ngross receipts cannot be assessed as income. What can be assessed as total income is \nonly the surplus/deficit. However, since there is no surplus, no tax is leviable on the \nassessee. For this purpose reliance is placed on the decision of Hon'ble ITAT, Jaipur \nBench in case of Kund Kund Kahan Digamber Jain Mumokshu Ashram Vs. ITO(E) \nΙΤΑ No.165/JP/19 to 168/JP/19 order dt. 29.05.2019 where at Para 8 it is held as \nunder:- \n8. We have heard the rival contentions and perused the material \navailable on record. We find that where the exemption claimed under section \n11 and 12 has been denied by the Assessing officer, what can be brought to tax \nis the net income in the hands of the assessee trust and not the gross receipts In \nall these years, we find that while denying the exemption under section 11 and \n12 for want of registration under section 12AA, the Accessing officer has \nbrought gross receipts to tax which is against the basic tenets of law where \nonly the real income which is determined after deducting expenses from gross \nreceipts can be brought to tax. We therefore agree with the alternate \ncontention so advanced by the Id AR and without going into merit of the other \ncontention which is left open, the matter is set-aside to the file of the \nAssessing officer to examine the claim of the expenditure so claimed by the \nassessee trust against the gross receipts for each of the relevant years and \nwhere the Assessing officer determines the net receipts as not exceeding the \nmaximum amount not chargeable to tax, allow the necessary relief to the \nassessee trust.” \n \nFollowing the decision of Kund Kund Kahan Digamber Jain Mumokshu Ashram, \nHon'ble ITAT, Jaipur Bench in case of Shri Krishna Mandir Trust Vs. ACIT ITA \nNo.255/JP/2022 order dt. 31.08.2022 has again held that gross receipt cannot be taxed \nas income and what can be taxed as income is only the surplus. \n \nSimilarly Hon'ble ITAT, Raipur Bench in case of Saroj Gopal Educational Society \nVs. ITO(E) (2023) 203 ITD 62 has held that AO, after treating the assessee as an \nunregistered society, was obligated to have considered its claim for deduction of \nexpenses raised in the income and expenditure account while deducing its taxable \nincome. \n \nIn view of above, AO be directed to assess the total income at loss of Rs. 14,46,213/-\n.” \nIn support of the various grounds so raised by the ld. AR of the assessee, he has \nfiled the paper book containing 1 to 29 pages \n\n ITA No. 169/Jodh/2024 \n Shiksha Samitee Bal Niketan \n \n5 \n \nS. No. \nParticulars \nPg. \nNo. \nFiled before \nAO/CIT(A) \n1. \nCopy of acknowledgment and adjournment application dt. \n24.01.2024 filed before Ld. CIT(A), NFAC \n1-2 \nCIT(A) \n2. \nCopy of acknowledgement of return along with computation of total \nincome \n3-5 \nBoth \n3. \nCopy of consolidated financial statement for FY. 2019-20 \n6-12 \nBoth \n4. \nCopy of decision of Hon'ble ITAT, Jaipur Bench in case of Kund \nKund Kahan Digamber Jain Mumokshu Ashram Vs.ITO(E) ITA \nNo. 165/JP/19 to 168/JP/19 order dt. 29.05.2019 \n13-19 \nReference \n5. \nCopy of decision of Hon'ble ITAT, Jaipur Bench in case of Shri \nKrishna Mandir Trust Vs. ACIT ITA No.255/JP/2022 order dt. \n31.08.2022 \n20-26 \nReference \n6. \nCopy of decision of Hon'ble ITAT, Raipur Bench in case of Saroj \nGopal Educational Society Vs. ITO(E) (2023) 203 ITD 62 \n27-29 \nReference \n \n6. \nPer contra, the ld. DR relied on the order of the ld. Addl. CIT *A) \n7. \nWe have heard the rival contentions and perused material \navailable on record. We note that AO(CPC) processed the return and issued \nintimation u/s 143(1) by assessing the gross receipt of Rs.1,13,74,839/- as total \nincome by denying exemption u/s 11 on the ground that audit report is obtained \nin Form No.10BB instead of Form No.10B. The assessee subsequently filed the \naudit report in Form No.10B on 28.10.2022 and also filed application for \ncondonation of delay u/s 119(2)(b) to PCIT(E), Delhi. Before the Addl. Ld. \nCIT(A), NFAC, assessee has challenged the action of CPC in assessing the \ngross receipt as total income without allowing the expenditure. The Addl. Ld. \nCIT(A), NFAC, however, dismissed the appeal by holding that since the \napplication for condonation of delay in filing the audit report in Form No.10B is \npending before the Ld. CIT (E), the ground of the appeal taken by the appellant \nis infructuous at this stage. In holding so the Addl. Ld. CIT(A), NFAC, has not \n\n ITA No. 169/Jodh/2024 \n Shiksha Samitee Bal Niketan \n \n6 \n \nadjudicated the ground of assessee that when assessee is engaged in imparting \neducation, against the gross receipt of Rs.1,13,74,839/-, expenditure incurred of \nRs.1,28,21,052/- (including depreciation of Rs.18,77,633/-) is allowable to the \nassessee. Hence we direct the AO to allow the expenditure claimed by the \nassessee after verification of the documents and thereafter assess the total \nincome of assessee in accordance with law. \n8. \nBefore parting, we may make it clear that our decision to restore the \nmatter back to the file of the AO shall in no way be construed as having any \nreflection or expression on the merits of the dispute, which shall be adjudicated \nby AO independently in accordance with law. \n9.0 \nIn the result, the appeal of the assesee is allowed for statistical purposes \n Order pronounced in the open court on. 26/12/2024 \n Sd/- \n \n \n \n \n \n \nSd/- \n(Rathod Kamlesh Jayantbhai) (DR. S. Seethalakshmi) \n Accountant Member \n \n \n \n \nJudicial Member \n \nSantosh- Sr. P.S \nCopy of the order forwarded to: \n (1)The Appellant \n (2) The Respondent \n (3) The CIT \n(4) The CIT (Appeals) \n (5) The DR, I.T.A.T. \n \n \n \n \n \n \n True Copy \nBy order \n"
