ITO Vs Christ Church Byculla (ITAT Mumbai)
Punching Error in ITR cannot justify Addition – Trust’s Accumulated Funds already applied, Sec.11(3) Addition Deleted
Revenue filed appeal against the order of CIT(A) deleting addition of ₹5.36 crore made u/s 11(3) in the case of a public charitable trust established in 1933.
The case was selected for scrutiny on the issue of “accumulation of income by trust”. During assessment, AO noticed that as per Schedule-I of ITR for AY 2018-19, an amount of ₹5.26 crore appeared as accumulated funds applied during the year. Assessee explained that this reporting was a “punching error” while filing the return & in fact, all accumulated funds from AYs 2012-13 to 2016-17 had already been fully spent on restoration & major repairs of the century-old church building during FY 2015-16 itself.
AO rejected the explanation, holding that Form 10B & ITRs of earlier years did not reflect such application & that Assessee did not revise its ITR to correct the alleged error. Relying on Goetze (India) Ltd v. CIT (284 ITR 323 SC), AO treated ₹5.26 crore as deemed income u/s 11(3).
CIT(A), however, after comparing details filed during assessment with ITR figures of earlier years, found that the entire accumulation stood spent in FY 2015-16, leaving no balance to be applied in AY 2018-19. It accepted the explanation of punching error & deleted the addition.
