Haryana Saraswati Heritage Development Board Vs DCIT/ACIT (ITAT Chandigarh)
The appeal concerns the order passed by the CIT(A)/NFAC, Delhi, dated 20.05.2025, relating to Assessment Year 2017-18. The assessee challenged the addition of ₹9,42,35,873, contending that the amount represented budget allocation received upon the formation of the board, which formed its corpus.
The assessee filed its return of income at nil on 03.11.2017 and subsequently revised it on 29.12.2017, again declaring nil income. The case was selected for scrutiny, and a notice under section 143(2) was issued. The case was transferred from ITO (Exemptions), Panchkula, to ITO (Exemptions), Ambala. Multiple notices under section 142(1) were issued requiring the assessee to furnish information and documents, including proof of registration under section 12A/12AA. Despite repeated statutory notices, the assessee did not submit any response on the e-proceeding portal.
As per the audited accounts and Form 10B, the assessee disclosed gross receipts of ₹10,47,49,895, expenditure of ₹1,05,14,022, and a surplus of ₹9,42,35,873, for which exemption was claimed under sections 11 and 12. Since the assessee failed to furnish a valid registration certificate under section 12A and did not respond to proceedings, the AO held that it could not be treated as a charitable entity. After providing what was described as a final opportunity, the AO completed the assessment ex-parte, denied exemption under sections 11 and 12, treated the surplus as taxable income, and assessed total income at ₹9,42,35,873 for the year. The AO also initiated penalty proceedings under section 270A for alleged under-reporting and charged interest under sections 234B, 234C, 234D, and 244A, applying tax at the maximum marginal rate under section 164(3).
