Case Law Details
Narada Gana Sabha Trust Vs ITO (ITAT Chennai)
ITAT Chennai held that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue, because, the issue of exemption u/s.11 of the Act, has been considered by the AO while completing assessment u/s.143(3) of the Act. Thus, order passed by the CIT(Exemptions) u/s.263 of the Act unsustainable.
Facts- The assessee’s Trust is a registered charitable Trust u/s. 12AA of the Income Tax Act, 1961 from AY 1976-77 onwards. The main objects of the Trust as per its Trust Deed dated 11.10.1973 is to promote science, literature, fine arts and useful knowledge and organize competitions, debates, examinations, etc.
The assessee has filed its return of income for AY 2018-19 on 01.10.2018 admitting ‘nil’ total income by claiming exemption u/s. 11 of the Act. The assessee had also filed Form No.10 on 29.09.2018 and had accumulated an amount of Rs.7,62,339/- for subsequent years to be applied for charitable purposes as per the objects of the Trust. The case has been subjected to scrutiny assessment and the assessment has been completed u/s. 143(3) r.w.s.143(3A) & 143(3B) of the Act, on 16.03.2021 and assessed the total income at Rs.NIL.
The case has been, subsequently, taken up for revision proceedings by CIT (Exemptions), Chennai and accordingly, show cause notice u/s. 263 of the Act was issued. After considering the submission, CIT (Exemptions) held that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, and thus, set aside the assessment order dated 16.03.2021 passed u/s.143(3) of the Act. Being aggrieved, the present appeal is filed.
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