AKR Academy Vs CIT (Exemption) (Madras High Court)
The Madras High Court addressed a writ petition filed by AKR Academy, a public charitable trust, against the rejection of its revision petition under Section 264 of the Income-tax Act. The Trust, which runs AKR Academy School, had been granted approval under Section 10(23C)(vi) in 2013. In its assessment for the year 2018-19, the Trust made an inadvertent error in its income tax return by entering ‘0’ in the exemption column, despite the entire income being applied to the Trust’s objectives as per the audit report. The Trust sought rectification from the Centralized Processing Centre (CPC), which was denied in May 2022. A revision application was then filed but rejected in March 2024. The Trust subsequently challenged this decision in the Madras High Court.
The Court noted that the Trust had consistently claimed exemption in previous years and argued that the error was inadvertent. It also highlighted the broad powers vested in the Commissioner of Income Tax (CIT) under Section 264, which allows for the reconsideration of such matters, especially when no appeal had been filed against the original order. The Court found that the CIT had prematurely rejected the application for revision without thoroughly examining the merits and instead based the rejection on procedural errors and delay. Consequently, the Court set aside the impugned order and remanded the matter back to the CIT for reconsideration, directing a fresh order to be issued within three months. The writ petition was disposed of without any cost, and the connected miscellaneous petitions were also closed.
