Case Law Details
Chinna Ponnu Ammal Trust Vs DCIT (ITAT Chennai)
After perusal of Form No.10B as placed on record, it could be seen that the assessee has applied an amount of Rs.5,55,57,015/- for the purpose of charitable trust. However, as per Explanation-3 to Sec.11(1), the disallowance of Rs.48,69,504/- u/s 40(a)(ia) would not be considered as application of income. Thus, the amount which has been applied for charitable purposes would be differential of two i.e., Rs.5,06,87,511/-. The assessee has earned income of Rs.5,17,39,216 out of which an amount of Rs.5,06,87,511/- (as computed above) has been applied for charitable purpose. The balance i.e., Rs.10,51,705/- would be the income of the assessee since as per Form No.10B, the assessee has not set-apart any amount for application is subsequent years. This income is the same which has been computed by the assessee in its computation of income and paid taxes thereon. Therefore, correctly applying the provisions of law, the assessee’s income is to be computed as Rs.10,51,705/-. Merely because there is mistake in filing the corresponding columns in the return of income, the same would not result into enhancement of the assessee’s income. Therefore, we direct CPC to rectify the intimation and compute the income as Rs.10,51,705/-as offered by the assessee to tax.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [in short ‘CIT(A)] dated 25.08.2021 in the matter of intimation issued u/s 143(1) issued by CPC, Bangalore on 04.06.2020.
2. The Ld. AR, drawing attention to the computation of income and income as computed by CPC, submitted that Explanation 3 to Sec.11(1) has not been applied correctly and demand has been raised erroneously. The Ld. Sr. DR submitted that the return has been processed by CPC as filed by the assessee which has already been noted by Ld. CIT(A) in the impugned order.
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