National Academy of Rudseti Vs ACIT (ITAT Bangalore)
Revised Form 10 Filed Before Assessment Saved ₹1.44 Crore Accumulation Claim- Bangalore ITAT Grants Relief to Charitable Trust
In a taxpayer-friendly ruling, the Bangalore ITAT held that a mere inadvertent mistake in Form 10 cannot deprive a charitable trust of exemption u/s 11(2), especially when the accumulation was properly disclosed in the return of income and audit report and the mistake was voluntarily corrected before completion of assessment.
The assessee trust, National Academy of Rudseti, had filed its return along with Form 10 claiming accumulation of ₹1.44 crore. However, while the accumulation amount was correctly disclosed in the return and Form 10B audit report, the same was inadvertently omitted in the originally filed Form 10.
The AO disallowed the accumulation claim u/s 11(2) on the ground that the amount was not specified in Form 10 and also treated certain balances as anonymous donations u/s 115BBC.
Before the Tribunal, the assessee explained that the omission in Form 10 was a genuine clerical error and that a revised Form 10 correcting the mistake had been filed before completion of assessment proceedings.
Accepting the contention, the ITAT observed that all primary records – including the return of income and audit report – clearly reflected the accumulation claim. The Tribunal noted that the assessee itself discovered the mistake and voluntarily rectified it by filing a revised Form 10 before assessment was completed.
The Bench held that when the substantive claim was always available on record, denial of exemption merely because of an inadvertent omission in Form 10 would be unjustified. Accordingly, the Tribunal deleted the addition and allowed the assessee’s claim for accumulation u/s 11(2).
On the separate issue of alleged anonymous donations u/s 115BBC amounting to about ₹52.31 lakh, the ITAT observed that the assessee claimed to possess complete donor details and contended that the amount actually represented excess income/grants capitalized in the books. Since proper examination had not been carried out by the AO, the Tribunal restored the issue back for fresh verification.
Accordingly, the appeal of the assessee was partly allowed
FULL TEXT OF THE ORDER OF ITAT BANGALORE
