The Tax Publishers2019 TaxPub(DT) 4755 (Del-Trib) : (2019) 178 ITD 0716 : (2019) 202 TTJ 0928 : (2019) 074 ITR (Trib) 0011

INCOME TAX ACT, 1961

Section 11 Section 139(4A) Sections 148 & 12A(b)

Where assessee-trust in response to notice under section 148 had filed return and, not under section 139(4A) even then provisions of sections 11 and 12 would be applied and assessee could not be denied exemption under section 11.

Charitable trust - Exemption under section 11 - Return filed in response to notice under section 148, and not under section 139(4A) -

Assessee was a society, who had been granted registration under section 12A by CIT looking to its objects of charitable purpose, i.e., it is engaged in imparting education and running various educational institutions. The assessee society had not filed its return of income and it was only in response to notice issued by the AO under section 148, the assessee had filed its return of income along with the audited Balance Sheet and Profit & Loss Account. The issue was whether the income of the assessee society was to be computed in accordance with the provisions of section 11 as it had not filed the return as required under section 139(4A), but had filed return in response to notice under section 148.Held: Whether it was a case of a regular assessment or it was a case of an assessment, consequent to issue of notice under section 148, not only the procedure of return as given in section 139 had to be applied, but also such the income had to be computed on the basis of such return in accordance with the provision of the Act, which, of course, will be subject to any specific provision in the Act which itself bars a claim or an exemption. Thus, section 148 provides that all the provision of the Act has to apply on such return furnished in response to notice under section 148. All that clause (b) mandates that provision of section 11 and 12 shall not apply unless the accounts are audited and a return is filed along with the audited accounts. Thus, as and when computation is to be done, these conditions need to be complied with. The issue whether return had been filed in time or not, is not relevant for clause (b) of section 12A. It is also important to note that condition of furnishing the return within the time allowed under section 139(4A) had been made applicable from assessment year 2018-19 as had been specifically stated in the Finance Act, 2017, and not for the assessment year under consideration. This amendment has been made by the Finance Act, 2017 effective from assessment year 2018-19. AO was therefore, not justified in denying the benefit of the exemption under section 11 and the AO was directed to compute the income in accordance with the provision of section 11.

Relied:Karnataka High Court in its judgment, dated 28-6-2016 in the case of Pr. CIT v. Sri Dichunchunagiri Shikshana Trust Adichunchungiri Kshetra Nagamangala Taluk Mandya being ITA No. 384 of 2016, Genius Education Society v. Asstt. CIT [ITA No. 238/Chd/2018, dt. 20-8-2018] : 2018 TaxPub(DT) 6682 (Chd-Trib), CIT(Central) v. Vatika Township (P) Ltd. (2014) 367 ITR 466 (SC) : 2014 TaxPub(DT) 3934 (SC). Distinguished:CIT v. Sun Engg. Works (P) Ltd. (1992) 198 ITR 297 (SC) : 1992 TaxPub(DT0 1434 (SC) and Director of IT v. Spic Educational Foundation (2002) 257 ITR 46 (Mad) : 2002 TaxPub(DT) 856 (Mad-HC).

REFERRED : Rajesh Kumar v. Dy. CIT (2006) 287 ITR 91 (SC) : 2006 TaxPub(DT) 1850 (SC) Order, dt. 1-11-2006, Asstt. CIT v. Badri Ram Choudhary (2012) 355 ITR 223 (Jod) : 2012 TaxPub(DT) 0969 (Raj-HC) Order, dt. 25-10-2007.

FAVOUR : In assessee's favour.

A.Y. : 2006-07 to 2009-10


INCOME TAX ACT, 1961

Section 143(3) Section 142(2A)

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