RCS Associates Charitable Trust Vs ITO Exemption (ITAT Chandigarh)
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) adjudicated appeals for AYs 2023-24 and 2024-25 filed by a charitable trust against CPC adjustments made under section 143(1) denying exemption under sections 11 and 12.
For AY 2023-24, the CPC restricted the claim of application of income after relying on Form 10BB, where the auditor had erroneously reported that a substantial portion of expenditure was applied out of accumulated income of earlier years instead of current-year income. The Tribunal held that CPC was justified in making the adjustment under section 143(1)(a) based on the return and audit report as filed. However, since the assessee produced a revised Form 10BB correcting the auditor’s mistake, the ITAT found the additional evidence to be material and remanded the matter to the CIT(A) for fresh adjudication, including verification of compliance with section 11(2) time limits.
For AY 2024-25, the exemption was denied as the assessee failed to file Form 10BB along with the return and claimed application from earlier years. As the assessee later produced Form 10BB and a revised audit report, the Tribunal again set aside the orders and restored the matter to the CIT(A), granting liberty to the assessee to seek condonation of delay in filing Form 10BB as per applicable guidelines.
Accordingly, both appeals were allowed for statistical purposes with directions for fresh consideration by the appellate authority.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
