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2020 (2) TMI 323 - AT - Income TaxExemption u/s.11(2) denied - Charitable activity u/s 2(15) - HELD THAT - It is evident that assessee s appeal was allowed primarily in view of the fact that the assessee had only one object and hence, there would be no ambiguity in specifying the purpose of accumulation in Form No. 10. Upon perusal of factual matrix as enumerated in preceding paragraphs, it appears that facts are pari-materia the same in this year. Nothing has been placed on record to demonstrate any distinguishing features. Therefore, keeping in view the fact that exemption u/s 11(2) was ultimately allowed to the assessee in AY 2010-11 as well as in AY 2011-12. we hold that the assessee is entitled for exemption u/s 11(2). Ground No. 1 of assessee s appeal stand allowed. Admission of new claim u/s 10(23EA) - this exemption was already allowed to the assessee by Ld. AO himself while framing quantum assessment order. Nevertheless, this issue also stood covered in assessee s favor by the order of Tribunal for AY 2011-12. Resultantly, the revenue s appeal stands dismissed. Interest u/s 234C was to be charged on returned income and not on assessed income. Non-receipt of refund - Assessee has disputed receipt of any refund, which Ld.AO is directed to verify. The Ld. AO is also directed to re-compute the income in terms of this order and determine correct tax liability / refund against the assessee. All these grounds stand allowed for statistical purposes.
Issues Involved:
1. Denial of exemption under Section 11(2) of the Income Tax Act, 1961. 2. Charging of interest under Section 234C and 234D of the Act. 3. Non-receipt of refund as claimed by the assessee. 4. Allowance of exemption under Section 10(23EA) of the Act by CIT(A). Issue-wise Detailed Analysis: 1. Denial of Exemption under Section 11(2): The primary issue was the denial of exemption under Section 11(2) of the Income Tax Act, 1961, amounting to ?50,71,76,620/-. The assessee, a registered trust, was denied this exemption by the Assessing Officer (AO) on the grounds that the trust's income enured benefit for trading members of the National Stock Exchange (NSE), which contravened Sections 13(1)(c)(i) & (ii) of the Act. The AO also noted that the purpose of accumulation in Form No. 10 was too general, merely reproducing the trust's objects. The CIT(A) upheld the AO's decision but partly allowed the assessee's appeal. The Tribunal, however, found that the assessee had only one object, thus satisfying the requirements of Section 11(2). It was also noted that similar claims had been allowed in previous years. Consequently, the Tribunal directed the AO to allow the exemption under Section 11(2). 2. Charging of Interest under Section 234C and 234D: The assessee contested the charging of interest under Sections 234C and 234D, amounting to ?67,01,749/- and ?3,73,828/- respectively. The Tribunal noted that the rectification application under Section 154, filed by the assessee on these issues, was pending before the AO. The Tribunal directed the AO to dispose of the application and clarified that interest under Section 234C should be charged on the returned income, not the assessed income. The AO was also directed to verify the claims regarding the non-receipt of refunds and recompute the income accordingly. 3. Non-receipt of Refund: The assessee claimed non-receipt of refunds amounting to ?32,96,542/- and ?2,63,720/- (interest under Section 244A). The AO had mentioned these amounts as refunded in the Income Tax Computation Form, but the assessee contended that no such refunds were received. The Tribunal directed the AO to verify these claims and determine the correct tax liability or refund due to the assessee. 4. Allowance of Exemption under Section 10(23EA): The revenue contested the CIT(A)'s allowance of exemption under Section 10(23EA) of the Act, arguing that the claim was not made during the filing of the return but at the appellate stage. The Tribunal noted that this exemption was already allowed by the AO in the quantum assessment order. Furthermore, the Tribunal's decision for AY 2010-11, which was upheld by the Hon'ble Bombay High Court and the Hon'ble Apex Court, supported the allowance of this exemption. Therefore, the Tribunal saw no reason to interfere with the CIT(A)'s order on this issue, and the revenue's appeal was dismissed. Conclusion: The Tribunal dismissed the revenue's appeal and partly allowed the assessee's appeal, directing the AO to allow the exemption under Section 11(2), verify the claims regarding non-receipt of refunds, and recompute the income and tax liability accordingly. The order was pronounced in the open court on 05th February 2020.
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