SJJPP Rashitrya S Trust Vs ITO (ITAT Bangalore)
In the case of SJJPP Rashtriya S Trust, the Bangalore ITAT dealt with massive delay (over 100 months) in filing appeal and incorrect taxation of gross receipts of a charitable trust.
The CIT(A) had dismissed the appeal in limine solely on delay, without examining merits.
The ITAT took a different view:
- Applied liberal principles of condonation laid down by the Supreme Court.
- Held that technicalities should not defeat substantial justice.
- Noted delay was due to bona fide belief (rectification pending, lack of communication) and not mala fide.
- Condoned the delay, but imposed a ₹5,000 cost to balance equities.
On merits, the Tribunal made an important observation:
- CPC had taxed entire gross receipts (₹8.97 lakh) due to delay in filing Form 10B.
- ITAT held that even if exemption u/s 11 is denied, only net income can be taxed, not gross receipts.
Since facts were not examined:
- Matter restored to AO to verify expenditure and compute taxable income on net basis.
Same view applied for AY 2020-21 as well.
Bottom line: Delay won’t kill justice-but gross taxation surely will. Even for charitable trusts, tax is on real income, not total receipts.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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