Case Law Details
Shri Sanatan Dharam Mandir Sabha Vs ITO (ITAT Delhi)
Facts- The assesse is a registered society registered with Registrar of Society Delhi. It has neither applied nor received any registration u/s 12A of the Act. For the AY 2013-14, the assesee filed its ITR-7 showing taxable at Rs. 2,18,060/- after reducing the application of income of Rs. 4,85,564/- from gross receipts of Rs. 7,03,624/-. The income was shown under the head “Income from Other Sources”. The CPC Bangalore processed the return u/s 143(1) and disallowed the expenses of Rs.4,85,564/- claimed in the return. Further the CPC, Bangalore denied the benefit of threshold limit and charged the income tax at maximum marginal rate on the gross receipt.
The assessee filed an application u/s 154 before the AO on 31.05.2018. The AO, however, rejected the application of the assessee by holding that since the status of the assessee is AOP (Trust) on which there is no threshold limit, therefore, the calculation of the tax rate at maximum marginal rate is correct. However, the AO did not elaborate regarding the disallowance of entire expenditure claimed by the assessee i.e. 143(1) by the CPC, Bangalore.
Conclusion- Held that adjustment made by the CPC, Bangalore does not fall under any of the limb prescribed u/s 143(1) of the Act.
Held that as per Hon’ble Delhi High Court in the case of DDIT (E) vs Petroleum Sports Promotion Board (Supra) it is clear that in case of a charitable society even if benefit u/s 11 & 12 of the Income Tax Act, 1961 is denied and its income was brought to tax as income from other sources, all relevant expenditures were also to be allowed.
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