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TMI Blog2010 (1) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... d classes, but doing the work for general urban public as a whole. Accordingly, it was not entitled for claim of exemption u/s 10(26B), Assessee society was not only in receipt of interest income from bank but it was also paying interest on the funds borrowed by it from HUDCO. All these facts and figures are duly fortified by the audited income and expenditure account filed with the return of income, AO directed to bring to tax the surplus income as shown by assessee in its Audited Income and Expenditure Account, appeal of the Revenue is allowed. - ITA No. 1140/Del/2009, - - - Dated:- 22-1-2010 - D.R. Singh and R.C. Sharma, JJ. D.N. Kar, CIT DR for the Appellant Ravinder Khanduja, FCA for the Respondent ORDER 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, the assessee approached to CIT(A). 3. By the impugned order, CIT(A) confirmed the finding of the AO with regard to its activity of not promoting interests of scheduled castes or scheduled tribes. However, the CIT(A) held that income of the assessee-society is not taxable, therefore it does not attract provisions of Section 139(1). He further observed that Section 139(1) envisages furnishing of return of income by a person if its total income or total income of any other person in respect of which it is assessable under the Act during the previous year exceeds the maximum amount which is not chargeable to income tax, whereas income of assessee was zero. He accordingly held that income of the society was returned under a misconceptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be applicable, shall be applied as if it was a return required to be furnished under sub-section (1) of Section 139. Meaning thereby even a charitable institution is liable to file a return if its income prior to giving effects of Section 11 and 12, is above the maximum limit not liable to tax. His further contention was that assessee is coming within the purview of person as defined in Section 2(31) of IT Act, thus assessee even being a local authority or AOP or society is required to file return u/s 139 read with Section 2(31) of IT Act. He accordingly submitted that CIT(A) was incorrect in holding that assessee SUDA was not liable to file the return of income u/s 139(1) of the Act, since its income as per audited income and expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the other hand, learned AR Shri Ravinder Knanduja who was also auditor of the company submitted that assessee is a channelizing agency of the Government of India for transfer of funds to SUDA for removal of urban property. It has no income of its own but a hypothetical income has been shown in the income and expenditure account which is just the administrative grant. He further supported the order of CIT(A) for holding that assessee-society has furnished return of Income under misconception and that it was not obliged to file its return of income in accordance with the provisions of Section 139(1) of the Act. 6. We have considered the rival contentions, carefully gone through the orders of the authorities below and found from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for its liability to income tax, it was commented by the auditor that assessee-society had not filed its income tax returns and that income of the assessee was not exempt to tax until exemption u/s 11 is. obtained by the assessee. It was also commented that surplus of Rs.14.31 lakhs could not be carried forward because of non filing of the income tax returns. 8. With regard to assessee's liability to file return of income u/s 139(4A), we are inclined to agree with learned DR that the assessee being registered under Societies Registration Act with Society Registrar, Dehradun is an assessable entity falling within the category of person as defined u/s 2(31) of IT Act, is liable to file its return of income as its total income without giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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