Cossimbazar Social Welfare And Development Trust Vs ITO (ITAT Kolkata)
Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has allowed an appeal by Cossimbazar Social Welfare And Development Trust, setting aside a tax demand raised by the Income Tax Officer (ITO), Centralized Processing Centre (CPC), Bangalore. The Tribunal ruled that the CPC erred by failing to consider the trust’s application of income (expenditure) while processing its return under Section 143(1) of the Income-tax Act, 1961.
The case pertains to the assessment year 2022-23, where the trust challenged an order from the Commissioner of Income-tax (Appeals) [CIT(A)], Mysore, dated December 11, 2024. The core of the dispute revolved around the CPC’s computation of the trust’s income, which resulted in a demand of ₹56,48,260/- despite the trust declaring nil income.
According to the trust, a social welfare and development organization operating an educational institution, it had maintained proper books of accounts, which were duly audited. The trust holds provisional registration under Section 12A of the Act and provisional approval under Section 80G(5), signifying its charitable status and eligibility for tax exemptions.
During the relevant financial year, the trust reported total receipts amounting to ₹1,41,27,960/-. It claimed that this entire sum was applied towards its charitable objectives, comprising revenue expenditure of ₹1,35,17,723/- and capital expenditure of ₹6,10,177/-. This application of income, the trust contended, meant there was no net surplus, and consequently, no taxable income. All these details, the trust asserted, were available in its return of income and the intimation issued under Section 143(1) dated March 31, 2023.
