ACIT Vs Meenakshi Ammal Trust (ITAT Chennai)
The ITAT Chennai dismissed the Revenue’s appeal and upheld the CIT(A)’s order granting substantial relief to a charitable educational trust in a search assessment u/s 153A for AY 2013-14.
The core dispute related to ₹6.74 crore treated by the AO as anonymous donations, alleging it represented accommodated salary / festival / material advances. The Tribunal noted that the assessee had already voluntarily disclosed ₹16.28 crore as accommodated receipts during assessment, which were accepted and taxed. Out of this, ₹7.78 crore remained unallocated to any specific head.
The CIT(A) had correctly allowed telescoping of the impugned ₹6.74 crore against the already disclosed ₹16.28 crore, holding that a separate addition would result in double taxation of the same income under different labels. The ITAT affirmed this finding, holding that the Revenue failed to bring any fresh incriminating material to show that the amount was over and above the admitted disclosure.
Going further, exercising Rule 27, the Tribunal also allowed further telescoping of the residual ₹1.04 crore (after adjusting ₹6.74 crore against ₹7.78 crore) against ₹2.06 crore of DD-based donations, directing deletion to that extent — reinforcing that the same stream of income cannot be taxed repeatedly.
On interest u/s 234A, the ITAT upheld the CIT(A)’s restriction of interest to 8 months instead of 18 months, holding that in a 153A regime, interest can run only from expiry of the time allowed in the 153A notice, not from the original due date u/s 139(1).
In sum, the Tribunal reaffirmed three settled principles:
(i) no double taxation through re-characterisation,
(ii) telescoping is mandatory where income streams overlap, and
(iii) 234A interest is compensatory and limited to actual delay.
Revenue’s appeal was dismissed in full.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The present appeal of the Revenue is directed against the order dated 14.03.2025 passed by the Learned Commissioner of Income Tax (Appeals)-19, Chennai [hereinafter referred to as “the Ld.CIT(A)”] arising out of the assessment order dated 08.03.2021 framed u/s.143(3) r.w.s 153A r.w.s 254 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] pertaining to the Assessment Year 2013-14.
