Sainath Sevabhavi Sanstha Vs ITO (ITAT Pune)
Gross receipts not automatically income -Trust’s lapse in Return Form doesn’t justify taxing entire receipts – 2489 Days too Late? ITAT says delay condonable when cause is genuine -ITAT Pune Remands
Appeal was filed by, a trust registered under the Bombay Public Trust Act, 1950 & the Societies Registration Act, 1860. Assessee had filed its return on 17.10.2014 showing gross receipts of ₹75,08,741/- and expenditure of ₹73,17,696/-, resulting in a small surplus of ₹1,91,045/-. CPC, however, processed the return u/s 143(1) on 14.03.2015 by treating the entire gross receipts as income, disallowing all expenditure.
Assessee thereafter filed a rectification application u/s 154, pointing out that it had inadvertently used Form 7 instead of the correct Form 5. ITO allowed the rectification &computed refund of ₹4,58,640/-, but the Addl. CIT refused approval citing technicalities & directed filing of condonation application u/s 119(2)(b). PCIT rejected the condonation application on 05.01.2022. Consequently, Assessee belatedly filed first appeal before CIT(A), but the appeal was dismissed for delay of 2489 days without being admitted.
Before the tribunal, Assessee argued that the delay was due to reasonable cause-since rectification proceedings were being pursued in good faith. Tribunal noted that the CPC’s adjustment u/s 143(1) was mechanical, that the assessee’s 154 application had already been accepted by ITO & that denial by higher authority was only on technical grounds.
