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2025 (2) TMI 161 - AT - Income TaxExemption u/ss. 10A/10AA - assessee society by allegedly revising its return of income had scaled down its gross total income/receipts - AO taking cognizance of the fact that the assessee had not furnished any documentary evidence in support of its claim of reducing the gross total income and also not furnished the details of its claim for exemption u/ss.10A/10AA - HELD THAT - As in absence of any material having been placed on record by the assessee society to substantiate its claim of exemption u/ss. 10A/10AA find no infirmity in the view taken by the CIT(A) who had rightly approved the view taken by the AO and declined the said claim for exemption raised by the assessee society. Apropos the assessee s claim that as it is an educational institution therefore its income as per the mandate of Section 10(23C)(iiiad) of the Act is exempt we are afraid that the same cannot be accepted for two fold reasons viz. (i) that as the aforesaid claim of the assessee society would require to look into the facts beyond those available on record i.e. as to whether or not the assessee society is existing solely for the educational purpose and not for the purpose of profit therefore as stated by the Ld. DR and rightly so the admission of the said additional ground is liable to be declined on the said count itself; (ii) alternatively that for claiming exemption u/s. 10(23C)(iiiad) of the Act the assessee society as per Section 139(4C)(c) of the Act was required to have filed its return of income for the subject year under sub-section (1) of Section 139 of the Act i.e. within the due date therein contemplated which in the present case had not been done as the original return of income was belatedly filed on 10.02.2019 i.e. much beyond the stipulated time period contemplated under the said provision therefore for the said reason also its claim for exemption is even otherwise not admissible. Accordingly the additional ground of appeal raised by the assessee society does not merit admission and thus rejected. As decided in Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT had observed that the A.O cannot allow a deduction other than that claimed by the assessee except for where the same had been raised based on a revised return of income filed by the latter. As in the present case assessee society had voluntarily disclosed gross income of Rs. 14, 32, 822/- in its original return of income therefore no infirmity emerges from the orders of the lower authorities who had rightly assessed the assessee society on the said amount of income. Although we not oblivion of the fact that case of Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT had carved out an exception that the assessee can raise a claim before the Tribunal but we afraid that nothing has been brought on record by the AR which would substantiate that the assessee society is entitled to raise a claim for exemption u/ss. 10A/10AA of the Act. Decided against assessee.
ISSUES PRESENTED and CONSIDERED
The primary issues considered in this judgment are: 1. Whether the Commissioner of Income Tax (Appeals) erred in passing an ex-parte order without considering the submissions of the appellant and whether the addition of Rs. 14,32,820/- should be deleted. 2. Whether the original return filed by the assessee society, declaring an income of Rs. 14,32,822/-, was erroneous and should be revised to reflect the actual income of Rs. 2,32,822/-. 3. Whether the assessee society is entitled to claim exemption under section 10(23C)(iiiad) of the Income-tax Act, 1961, on the grounds that it exists solely for educational purposes and its receipts do not exceed Rs. 1 crore. ISSUE-WISE DETAILED ANALYSIS 1. Ex-parte Order and Addition of Rs. 14,32,820/- The legal framework involves the procedural fairness in tax assessments and the right of the assessee to be heard. The Court noted that the CIT(A) had dismissed the appeal without the assessee providing sufficient evidence or counterarguments. The assessee society failed to substantiate its claims during the appellate proceedings, leading the CIT(A) to uphold the addition made by the A.O. The Court found no procedural irregularity in the CIT(A)'s decision, as the assessee did not comply with the requirements to support its claims. 2. Erroneous Original Return and Revised Income The relevant legal provision is Section 139 of the Income-tax Act, which governs the filing of returns and revisions. The Court observed that the revised return filed by the assessee was beyond the stipulated time and thus considered non-est. The assessee's original return declared an income of Rs. 14,32,822/-, which was not substantiated with evidence for the claimed exemptions. The Court upheld the A.O.'s decision to assess the income based on the original return, as the revised return was not legally valid. The Court also addressed the assessee's argument that the erroneous filing was due to ignorance, referencing the CBDT Circular No. 14(XL-35)/1955, which emphasizes that the department should not take advantage of an assessee's ignorance. However, the Court found that the assessee had not provided sufficient grounds to deviate from the original filing. 3. Claim for Exemption under Section 10(23C)(iiiad) The Court examined whether the assessee society qualified for exemption under Section 10(23C)(iiiad), which requires the institution to exist solely for educational purposes and not for profit, with receipts not exceeding Rs. 1 crore. The Court found that the assessee did not provide evidence to support its claim of being an educational institution as per the requirements of the section. Additionally, the original return was filed beyond the due date, further disqualifying the assessee from claiming the exemption. The Court also referenced the Supreme Court's decision in Goetze (India) Ltd. Vs. CIT, which restricts the A.O. from allowing deductions not claimed in the original return unless raised in a revised return. The Tribunal found no basis to allow the exemption claim as the revised return was not valid and the claim was not substantiated. SIGNIFICANT HOLDINGS The Court upheld the decisions of the lower authorities, emphasizing the following principles: - The procedural requirements for filing and revising tax returns must be strictly adhered to, and claims for exemptions must be substantiated with evidence. - The Tribunal cannot entertain claims for exemptions that were not raised in a valid revised return or substantiated during the proceedings. - The assessee's failure to comply with procedural requirements and provide evidence for its claims justifies the decisions of the lower authorities to assess income based on the original return. Final determinations: - The appeal filed by the assessee society is dismissed, and the assessment of income at Rs. 14,32,820/- is upheld.
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