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TMI Blog2025 (3) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... found to be not eligible for claim of exemption u/s 10/23(C)(iiiad) jurisdictional AO is hereby directed to examine/verify the claim of expenditure made by the assessee trust against the gross receipts for the relevant AY and modify the assessment accordingly as a result of such examination/verification as per the fact and law after giving adequate opportunity of hearing to the assessee. Appeal of the assessee is treated as allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational purposes and thus the entire income of the trust is otherwise exempt, if not u/s 11 but u/s 10(23C)(iiiad) of the Act. There is no requirement of filing of ITR or Form 10B in order to claim exemption u/s 10(23C)(iiiad) of the Act. The assessee further submitted that these are the additional grounds/arguments taken before the Ld. Addl./JCIT(A) for the first time by the assessee and were not taken before the Ld. AO. The assessee made detailed legal submission on admissibility of the additional claim made by it which has been incorporated by the Ld. Addl./JCIT(A) in para 4 of his appellate order (page 4 and 5 of the appellate order refers). Without prejudice, the assessee also raised an additional ground that only the net commercial income needs to be considered for the purpose of determining the total income and not the entire gross receipts and submitted a chart showing the calculation of the net commercial income along with the copies of audited accounts which was also submitted before the Ld. AO during the rectification proceedings. The said calculation of net commercial income as worked out by the assessee is reproduced below : PARTICULARS AMOUNT (Rs) INCOME FEES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that these two grounds were not taken before the AO. It is pertinent to note that this appeal pertains to the order under section 143(1) of the Act, which is based on the particulars furnished by the appellant in its return. 6.4 On perusal of the return filed u/s 143(1) of the Act dated 28.03.2021, it is noted that the appellant has claimed deduction u/s 11 of the Act. The appellant has been denied exemption u/s 11 since Form 108 was not filed on time. 6.5 In this context, it's important to note that according to Section 12A(1)(b) and Rule 178. Trusts are obligated to file Form 108, which is mandatory. Form 108 can only be accessed and submitted online and must be filed no later than the specified date mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section 139(1) of the Act. 6.6 In the present case, the appellant did not submit Form 108. Hence, Form 108 was not filed within the time frame outlined by the Act. 6.7 In view of the above, I find no error in the AO's decision to disallow the appellant's claim for exemption under Section 11 and 12 of the Act when processing the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 10(23C)(iiiad) of the Act in case the exemption u/s 11 is not granted to the assessee. Without prejudice to his above contention, he further submitted that an additional ground was raised before the Ld. Addl./JCIT(A) claiming that the addition, if any, should be restricted only to the net commercial income and not the entire gross receipts i.e. the expenses incurred by the trust ought to have been allowed by the Ld. Addl./JCIT(A) which has not been considered by him. He, therefore, requested that the matter may be set aside to the file of the Ld. jurisdictional AO for verification of the claim of the assessee and decide the issue afresh in light of result of such verification. The Ld. AR submitted that the impugned issue is covered by the favourable order of the Co-ordinate Bench of Pune Tribunal in the case of Dr. Sukumar J. Magdum Foundation Vs. ITO in ITA No. 320/PUN/2023 for AY 2018-19, dated 14.08.2023, a copy of which was placed before us, wherein the Tribunal under the similar set of facts had set aside the matter to the file of the Ld. AO holding that the total income needs to be computed in accordance with the regular provisions of the Act in case the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. 7.1 Before us, the Ld. AR of the assessee has not seriously pressed ground Nos. 1 and 2 relating to claim of exemption by the assessee u/s 11 and/or section 10(23C)(iiiad) of the Act. In our considered view, the additional ground (ground No. 3) relating to taxability of only net commercial income being legal in nature and not requiring any fresh examination of the factual matrix is hereby admitted. We have perused the order of Co-ordinate Bench of the Pune Tribunal relied by the Ld. AR in the case of Dr. Sukumar J. Magdum Foundation (supra) wherein the Tribunal considered the issue of manner of assessment by the Ld. AO based on the fact that the assessee was not having any registration so as to qualify for exemption u/s 11 of the Act and held as under : "3. We have heard the rival submissions and gone through the relevant material on record. The contentions about the late filing of Audit report in Form No.10B and the need for still granting exemption, were not seriously pressed. The ld. AR has raised an additional ground to the effect that total income of the assessee ought to have been determined on commercial principles and not by charging the gross receipts to tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Addl./JCIT(A) and restore the matter back to the file of the Ld. jurisdictional AO with a direction to verify whether the assessee is eligible for claim of exemption u/s 10/23(C)(iiiad) of the Act and grant relief to the assessee as per the provisions of law as a result of such verification thereof. In case the assessee is found to be not eligible for claim of exemption u/s 10/23(C)(iiiad) of the Act, the Ld. jurisdictional AO is hereby directed to examine/verify the claim of expenditure made by the assessee trust against the gross receipts for the relevant AY and modify the assessment accordingly as a result of such examination/verification as per the fact and law after giving adequate opportunity of hearing to the assessee. The assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence/submissions as may be required/called upon on the appointed date, failing which the Ld. AO shall be at liberty to pass appropriate order as per law. We direct and order accordingly.
9. In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 18th February, 2025. X X X X Extracts X X X X X X X X Extracts X X X X
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