Tribunal Orders Reassessment of Tax Claims for 2013-14; Corpus Donations to Be Treated as Income; Recalculates Net Income.

The Tribunal allowed the appeals for statistical purposes, directing the Assessing Officer to re-examine the assessee's claims for the assessment year 2013-14. The delay in filing one appeal was condoned. Due to the lack of registration under Section 12AA, the Tribunal instructed that income be computed commercially, allowing deductions for expenditures incurred. It also ruled that corpus donations should be treated as income. The orders of the lower authorities were set aside, and the Assessing Officer was tasked with recalculating the net income and applying tax accordingly, considering Section 143(1) for prima facie adjustments.

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Issues:
Appeal against orders of Commissioner of Income Tax (Appeals) for assessment year 2013-14, delay in filing appeal, claim of exemption under Section 11 of the Income-tax Act, rejection of claim due to lack of registration, petition under Section 154, computation of income commercially, treatment of corpus donation, direction to Assessing Officer for re-examination, setting aside of lower authorities' orders, consideration under Section 143(1) of the Act.

Analysis:
The judgment deals with two appeals by the assessee against the Commissioner of Income Tax (Appeals) orders for the assessment year 2013-14. The delay of 24 days in filing one of the appeals was condoned after finding sufficient cause. The assessee claimed exemption under Section 11 of the Income-tax Act but faced rejection due to lack of registration. The counsel argued that without registration, income should be computed commercially by deducting expenditure. The matter was remitted back to the Assessing Officer for reconsideration.

The Tribunal acknowledged the absence of registration under Section 12AA of the Act for the assessee during the relevant year. Consequently, it directed the income to be computed commercially by allowing all expenditure incurred for earning income. The Tribunal agreed that corpus donation should be treated as income/receipt. As this exercise was not done previously, the Tribunal set aside the lower authorities' orders and instructed the Assessing Officer to determine the net income after reducing expenditure and levy tax accordingly. The Tribunal reminded the Assessing Officer to consider the provisions of Section 143(1) of the Act for prima facie adjustments.

In conclusion, both appeals were allowed for statistical purposes, emphasizing the need for the Assessing Officer to re-examine the matter by considering all relevant factors, including the commercial computation of income and treatment of corpus donation. The judgment was pronounced in Chennai on 5th September 2019.

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