Kutchi Lal Rameshwar Ashram and Annakshetra Trust Vs Income Exem. (ITAT Mumbai)
In the ITAT Mumbai held that the CIT(A) has the power to entertain a fresh legal claim, even if not made in the return of income, and set aside the appellate order which had rejected the assessee trust’s claim relying on Goetze (India) Ltd.
The assessee, a charitable trust registered u/s 12A, had gross receipts of ₹7.48 crore and accumulated ₹48.79 lakh (less than 15% of receipts) eligible for exemption u/s 11(1)(a). Due to an inadvertent error in ITR and Form 10B, the claim was not properly reported, leading to denial during processing. The CIT(A) dismissed the claim stating that a fresh claim cannot be made without filing a revised return.
The Tribunal held:
- Powers of appellate authorities are wider; Goetze (India) restricts only the AO, not CIT(A).
- Where all facts are on record and the claim is legal in nature, CIT(A) should examine it on merits.
- Denial of video hearing and summary rejection was improper.
Accordingly, the matter was restored to the CIT(A) to adjudicate the exemption claim afresh after granting proper opportunity. The assessee’s appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
