2024 (2) TMI 1241 - HC - Income Tax

Addition u/s 69A r.w.s. 115BBE - Assessment of trust - unexplained money' - Income consists of voluntary contributions from devotees and followers - Assessee admittedly is a charitable organization under Section 12A and runs a temple and community hall at Bangur Nagar, Goregaon, Mumbai -- ITAT accepted the plea of Petitioner that for assessment year in question Petitioner s total income should be computed as Nil as against amount assessed by the AO HELD THAT - ITAT has also correctly recorded that Section 69A of the Act was not applicable to the facts and circumstances of this case. So also, the provisions of Section 115BBC of the Act because Sub-section (1) of Section 115BBC will not apply to donations like that has been received by Petitioner in donation boxes from numerous devotees, who have offered the offerings on account of respect, esteem, regard, reverence and their prayer for their deity/siddha peeth. Therefore, the only task that was left for the AO, was to give the refund of the taxes paid. This is because the ITAT has held that there was no income chargeable to tax. We should also observe that it has not been even argued before the ITAT that Section 44AB of the Act was applicable or that the Form 10B was filed after the due date because we do not find any such submissions recorded in the order of ITAT. Notwithstanding this, the AO once again called upon Petitioner to furnish complete set of Form 10B and also to justify why the claim of exemption under Section 11 of the Act be allowed. Strangely, the AO, one Mr. Meet Kumar, who has also filed the affidavit-in-reply, has stressed upon the time limit specified under Section 44AB of the Act ignoring the fact that it was not even argued before the ITAT and it had already been accepted in the original assessment order dated 26th December 2019 that Petitioner was entitled to deductions/ exemptions under Section 11 of the Act. We find it rather unacceptable that the officer has tried to take shelter under a paragraph of the order of ITAT where the Tribunal has only narrated what was the order passed by the CIT(A). Though we would have wanted to make observations against the said officer, we exercised restraint in view of the request made by Department ITAT having accepted Petitioner s plea that for the assessment year in question, Petitioner s total income should be computed as Nil , the only task before the AO was to issue refund to Petitioner of all taxes paid or recovered from Petitioner for AY 2017-2018. Since before the Hon ble ITAT there was no controversy as regards the date of filing of return by Petitioner or Form 10B, the AO cannot, in the garb of giving effect to the order of ITAT, initiate a new controversy. The order giving effect dated 30th November 2023 (impugned in the petition) has to be quashed and set aside. - Decided in favor of assessee.

Issues Involved:

1. Quashing and setting aside the impugned order.
2. Refund of taxes paid by the petitioner.
3. Incorrect application of Section 69A and Section 115BBE of the Income Tax Act.
4. Entitlement to exemption under Section 11 of the Income Tax Act.
5. Filing of Form 10B within the due date.

Summary:

1. Quashing and Setting Aside the Impugned Order:
The petitioner sought a writ of certiorari to quash the impugned order dated 30th November 2023, which allegedly failed to correctly give effect to the Income Tax Appellate Tribunal (ITAT) order and wrongly recorded an additional tax payable amount of Rs. 4,23,47,009/- after adjusting Rs. 40,06,299/- already paid.

2. Refund of Taxes Paid by the Petitioner:
The petitioner, a charitable organization under Section 12A of the Income Tax Act, claimed that the Assessing Officer (AO) did not consider the ITAT order and incorrectly assessed additional taxes. The High Court directed the AO to issue a refund of all taxes paid or recovered from the petitioner for AY 2017-2018, as the ITAT had determined that there was no income chargeable to tax.

3. Incorrect Application of Section 69A and Section 115BBE of the Income Tax Act:
The ITAT found that Section 69A was not applicable to the petitioner's case and, consequently, Section 115BBE was also inapplicable. The ITAT concluded that the provisions of Section 115BBC did not apply to donations received by the petitioner in donation boxes from numerous devotees, as these were not considered anonymous donations under the Act.

4. Entitlement to Exemption under Section 11 of the Income Tax Act:
The original assessment order dated 26th December 2019 accepted the petitioner's gross receipts as exempt under Section 11 of the Act. However, the new AO disallowed this exemption due to the alleged late filing of Form 10B. The High Court noted that this amounted to an unauthorized review of the earlier assessment order, which had already granted the exemption.

5. Filing of Form 10B within the Due Date:
The petitioner contended that Form 10B was filed on 24th February 2018, within the due date. The CIT(A) directed the AO to verify this and allow the exemption if the form was filed on time. The High Court observed that the AO's insistence on the time limit specified under Section 44AB was misplaced, as the ITAT had not found any issue with the filing date.

Conclusion:
The High Court quashed the impugned order dated 30th November 2023 and directed the AO to issue a refund to the petitioner. The Principal Commissioner of Income Tax was instructed to assign the task to an officer other than Mr. Meet Kumar and ensure compliance with the ITAT and High Court orders. The petition was disposed of with no order as to costs.

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