ITO (Exemption) Vs Shree Umiya Education Trust (ITAT Ahmedabad)
ITAT Ahmedabad held that denial of exemption u/s. 11 by CPC in the rectification petition not justified since the same was allowed in earlier proceeding and it is settled position of law that debatable issues cannot be done in rectification proceedings.
Facts- The assessee is an educational institution registered u/s. 12AA enjoying exemption u/s. 11 of the Act. For the Asst. Year 2015-16, assessee filed its original Return of Income on 29-09-2015 along with Audit Report in Form 10B claiming exemption u/s. 11 of the Act and declaring Nil Income. Thereafter the assessee filed a Revised Return of Income along with the Audit report in Form 10B on 11-03-2016 for claiming credit of cost of acquisition of securities. Intimation u/s. 143(1) was passed on 11-10-2016 by CPC allowing exemption u/s. 11 of the Act but denying credit for cost of acquisition on securities. Therefore Assessee filed rectification application u/s. 154 on 16-01-2018 claiming credit for cost of acquisition on securities. CPC allowed the rectification but denied exemption u/s. 11 of the Act vide rectification order dated 01-09-2019.
CIT(A) allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that it is settled proposition of law that debatable issues cannot be done in the rectification proceedings. More particularly, when the CPC Centre vide its Intimation dated 11-10-2016 allowed the claim of exemption u/s. 11 of the Act in the rectification petition without assigning any reason or debating from the view taken earlier while passing the intimation u/s. 143(1), CPC ought not to have denied the exemption to the assessee. Thus the finding arrived by Ld. CIT(A) is well within the provisions of law which does not require any interference. Thus the appeal filed by the Revenue is devoid of merits and the same is liable to be dismissed.
