2024 (3) TMI 1306 - AT - Income Tax

Rectification u/s 154 - Exemption u/s 11(2) - Accumulation of income - difference in figures in computation of income in return of income and in Form 10 in respect of total amount of accumulated funds under section 11(2) - as argued that the Ld. CIT(A) did not ask for clarification from the assessee for alleged discrepancy found by him while matching the details of investment with evidence furnished, thus this is in violation of the principles of natural justice - HELD THAT - In our view, the claim of the assessee needs verification. We, therefore, consider it judicially expedient to restore the matter back to the file of the Ld. AO to carry out necessary verification of the assessee s claim and if on verification, the claim of the assessee is found to be correct and in accordance with law, modify the assessment. Appeal of the assessee is treated as allowed for statistical purposes.

Summary

Issues Involved:
The appeal pertains to the denial of benefit of exemption claimed u/s 11(2) of the Income Tax Act, 1961 amounting to Rs. 1,20,00,33,672/- and the subsequent partial allowance of the claim by the Ld. CIT(A) leading to an appeal before the Tribunal.

Grounds of Appeal:
1. The order of the Ld. CIT(A) partly sustaining the order of the Assessing Officer is challenged.
2. The Ld. CIT(A) erred in only partly allowing the claim made u/s 11(2) of the Income Tax Act.
3. Benefit of balance claim on account of non-accumulation of funds u/s 11(5) was not granted.
4. Allegation of the order being against the principles of natural justice.
5. Disallowance made u/s 11(2) by the Centralized Processing Center and Ld. CIT(A) was contested.
6. Failure to appreciate compliance with provisions of u/s 11(2) for e-filing Form 10 before the due date.

Facts and Arguments:
The appellant filed the Return of Income (ROI) claiming exemption u/s 11(2) for an amount of Rs. 120,00,33,672/-. Discrepancies in TDS credit and refund amount led to rectification applications u/s 154. The subsequent rectification order disallowed the claim made u/s 11(2), resulting in a demand. The appellant contested this denial before the Ld. CIT(A) and subsequently appealed to the Tribunal.

Ld. CIT(A) Findings:
The Ld. CIT(A) verified the figures and accumulation details provided by the appellant. It was found that the actual accumulation was lower than the required amount u/s 11(2), leading to a partial allowance of the claim. The remaining amount was deemed ineligible for deduction due to non-accumulation in specified modes u/s 11(5).

Tribunal Decision:
The Tribunal found the claim of the assessee needing further verification and deemed it judicially expedient to restore the matter back to the file of the Assessing Officer for necessary verification. If the claim is found correct and in accordance with the law, the assessment should be modified accordingly. The appeal of the assessee is treated as allowed for statistical purposes.

Conclusion:
The Tribunal ordered the matter to be verified by the Assessing Officer and if found correct, to modify the assessment accordingly, allowing the appeal for statistical purposes.