Rotary Charitable Trust Vs ITO (ITAT Bangalore)
Assessee, a charitable trust running an educational institution, filed an updated return u/s 139(8A), claiming exemption u/s 10(23C)(iiiac). CPC, Bengaluru, issued a notice dated 26.12.2023 pointing out an incorrect exemption claim & provided 30 days to respond.However, just two days later, on 29.12.2023, CPC passed an intimation u/s 143(1), disallowing the exemption & treating the entire gross receipts (₹1.61 crore) as income, raising a demand of ₹1.74 crore. CIT(A) upheld the CPC’s action, citing the assessee’s failure to file Form 10B & belated return filing.
Assessee argued that CPC’s action was premature & in violation of the mandatory 30-day response time under the 2nd proviso to section 143(1)(a). The exemption was inadvertently claimed under the wrong clause; the correct section was 10(23C)(iiiad). The provisions of section 12A(1)(b), Form 10B, & sections 11 & 12 were wrongly applied, as the trust was not claiming exemption under these.
Tribunal held that CPC failed to observe the mandatory 30-day period provided under the 2nd proviso to section 143(1)(a), which is not a procedural formality but a statutory requirement. Tribunal quashed the intimation u/s 143(1) on this ground alone, without addressing the merits.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
