2024 (5) TMI 1095 - AT - Income Tax

Deduction u/s 80G - donation made in excess of 10% of gross total income -assessee is a charitable trust - Assessee has already surrendered his registration u/s 12A and is now assessable as an Association of Person (AOP) - as per CIT(A) on perusal of Section 80G(4) it does not restrict the donation given to such entity by restricting it to the 10% of the total income - HELD THAT - The deduction under Section 80G of the Act was made by the assessee as it donated 1, 42, 33, 000/- to Tata Institute of Social Sciences Deonar Bombay which is approved university or educational Institution by prescribed authority as per notification dated 15th December 1993. Thus deduction u/s 80G was not restricted to 10% of the gross total income as deduction granted to the specified entities and therefore 50% of the above amount was allowed. CIT (A) has restored the matter back to the file of the learned Assessing Officer to grant deduction to the assessee under Section 80G of the Act to the entities registered u/s 80G(3)(a)(iiif) of the Act after verification. Thus according to him on perusal of Section 80G(4) of the Act it does not restrict the donation given to such entity by restricting it to the 10% of the total income. Provision of section 80 G (4) are as under - (4) Where the aggregate of the sums referred to in sub-clauses (iv) (v) (vi) (via) and (vii) of clause (a) and in 2 clauses (b) and (c) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter) then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1) . Indeed donation u/s 80 G (2) (iiif) is not mentioned u/s 80 G (4) of the Act. Thus ld CIT (A) is correct and hence we confirm his order. Accordingly we do not find any merit in ground no.1 of the appeal hence dismissed. Deduction u/s 80GGA - claim not made in the return of income but shown separately in the computation of total income - HELD THAT - We find that it cannot be said that assessee has not claimed such deduction in the return of income filed in ITR 5 as same was clubbed with deduction u/s 80G of the Act. Assessee claimed it in the return of income albeit clubbed it with the different section. The deduction is claimed under Chapter VIA of the Act. It is not the claim of the Revenue that in ITR filed by the assessee such functionality was available at that time. In view of this we do not find any infirmity in the order of the learned CIT (A) in directing the learned Assessing Officer to verify the same and grant in order giving effect to the appellate order if available to the assessee. Therefore the ground no.2 of the appeal is dismissed. Disallowance of carry forward of excess expenditure - HELD THAT - This ground is infructuous as assessee has not claimed benefit of section 11 and 12 of the Act. Therefore there is no question of granting the benefit of deficit of this year to the assessee to be carried forward in the next year.

Summary

Issues Involved:
1. Deduction u/s 80G exceeding 10% of gross total income.
2. Deduction u/s 80GGA not claimed in the return of income.
3. Disallowance of carry forward of excess expenditure.

Summary:

Issue 1: Deduction u/s 80G exceeding 10% of gross total income
The learned Assessing Officer (AO) restricted the deduction u/s 80G to 10% of the gross total income, disallowing the excess claimed by the assessee. The assessee argued that the donation to Tata Institute of Social Sciences, approved u/s 80G(2)(iiif), is not subject to the 10% cap. The learned CIT (A) agreed, stating that donations to entities approved u/s 80G(2)(iiif) are not restricted by the 10% limit u/s 80G(4). The Tribunal confirmed the CIT (A)'s order, dismissing the AO's appeal on this ground.

Issue 2: Deduction u/s 80GGA not claimed in the return of income
The AO disallowed the deduction u/s 80GGA of Rs. 1,27,02,000/- as it was not claimed in the return of income but was shown in the computation of total income. The CIT (A) directed the AO to verify and allow the deduction if the conditions are met, citing CBDT Circular No. 14 and the decision in CIT v. Ramco International. The Tribunal upheld the CIT (A)'s order, noting that the assessee had indeed claimed the deduction in the return, albeit clubbed with u/s 80G, and directed the AO to verify and allow the deduction if applicable.

Issue 3: Disallowance of carry forward of excess expenditure
The AO's appeal on the disallowance of carry forward of excess expenditure was deemed infructuous as the assessee, being an Association of Person (AOP) and not a charitable trust registered u/s 12A, is not entitled to benefits u/s 11 and 12. The Tribunal dismissed this ground of appeal.

Conclusion:
The Tribunal dismissed the appeal of the learned AO, confirming the CIT (A)'s order on all grounds. The order was pronounced in the open court on 21.05.2024.