ITAT allows deduction claim of ASAN Memorial Association despite filing error

On By Pranco

ASAN Memorial Association vs DCIT (ITAT Chennai)

In the case of ASAN Memorial Association vs DCIT (ITAT Chennai)the Income Tax Appellate Tribunal (ITAT) has granted relief to the taxpayer, a trust, in his claim under Section 11 of the Income Tax Act. The problem arose because the taxpayer had filed the income tax return for the assessment years 2016-17 and 2017-18, wrongly reporting the claim for statutory deduction in the wrong column of the return. The assessee had declared the accumulated income of ₹5,30,42,826 (15% of the income derived) in the wrong section (column 9(iv)) instead of column 9(v) for charity purposes. As a result, the Centralized Processing Center (CPC) disallowed the statutory deductions and found the absence of Form 9A, which is typically required to claim such deductions. The CIT(A) upheld the decision of the CPC and dismissed the appeal.

The assessee submitted that despite the filing error, the statutory deduction of 15% was clearly reflected in the return and there was no Form 9A requirement for this deduction under Section 11(1)(a). The ITAT agreed with the assessor’s argument and emphasized that the claim should not be rejected simply because the mark was entered in the wrong column. The Tribunal noted that the audit report submitted with the return clearly supported the claim. It, therefore, set aside the order of the CIT(A) and directed the Assessing Officer (AO) to allow the claim under Section 11(1)(a). The same reasoning was applied to the appeal for AY 2017-18, where the same issue existed. Both professions were allowed for statistical purposes.

COMPLETE TEXT OF THE ORDER OF ITAT CHENNAI

The aforesaid two appeals filed by the Assessing Officer are against the common order of the Learned Commissioner of Income Tax, Appeal, ADDL/JCIT(A), Faridabad (hereinafter “CIT(A)”) dated for the assessment years 2016-17 and 2017-18 29.03. .2024 vide indications u/s143(1) of the Income-tax Act, 1961 (hereinafter “the Act”) issued by the CPC, Bengaluru, dated 17.03.2018 and 27.03.2019.

2. The facts in both appeals of the assessor are identical and the issues are common. That is why we are issuing a joint order. For the sake of brevity, we will deal with the appeal in ITA No. 1986/Chny/2024 for AY 2016-17 as the main case.

3. The taxpayer is a trust and has filed his income return on 01.09.2016 declaring total income as zero. The taxpayer in the return of income in Part B-TI, in column of clause 9(v), the amount collected or set aside for application to charitable purposes, to the extent that it does not exceed 15% of the income from property held in trust/institution us. 11(1)(a)/11(1(b) (limited to the maximum of 15%) has mentioned ‘0’ in place of Rs.5,30,42,826/- which is 15% of the income derived and legally allowed.The taxpayer has wrongly submitted this figure in column 9(iv).The CPC has not allowed the statutory indication of Rs 5,30,42,826 stating the reason that the assessee has not filed the Form 9A required to claim the deduction entered in column 9(iv) has confirmed the addition as the assessee has not filed the Form 9A as required to claim the deduction as stated in column 9(v), and dismissed the appeal.

4. The Ld. The authorized representative (AR) of the taxpayer has argued that the taxpayer is entitled to 15% of the income derived under Article 11(1), but incorrectly entered this figure in column 9(iv) instead of entering it in to complete column 9(v). ). The Ld. AR submitted that the Ld. CIT(A), considering that the claim has been filed under 9(iv), has upheld the adjustment of CPC for non-filing of Form 9A. The Ld. AR has argued that filling Form 9A is not required to claim 15% of statutory deduction, and the CPC has disallowed this as this amount was wrongly entered in column 9(iv).

5. The Ld. The department representative, on the other hand, supported the orders of the authorities below.

6. We have heard the competing submissions and reviewed the available material. The Part B-TI taxpayer, while returning income, has entered “0” in Column 9(v) for the amount collected or set aside for application to charitable purposes to the extent of 15% instead of Rs. 5,30,42,826/- which has been wrongly entered in column 9(iv). We agree with the submission of Ld. AR says that the claim of statutory deduction cannot be rejected just because the figure has been placed in column 9(iv) instead of 9(v) and the same is evident from the audit report filed along with the return. In view of the above, we set aside the order of Ld CIT(A) and the CPC and directed AO to allow the claim in accordance with Section 11(1)(a). The appeal submitted by the assessor is therefore allowed for statistical purposes.

ITA No. 1987/Chny/2024 for AY 2017-18:

7. We find that the same issue is also involved in the assessee’s appeal for AY 2017-18 and accordingly our judgment above stands in AY 2016-17 mutatis mutandis also applies there. Therefore, for similar reasons, we direct the AO to allow the claim under Section 11(1)(a).

8. As a result, both appeals submitted by the assessor are allowed for statistical purposes.

Order pronounced in open court on 23rd October 2024.