2022 (1) TMI 1206 - AT - Income Tax

Charitable Trust wins appeal for tax deduction after ITAT overturns CIT(A) decision

The ITAT, Ahmedabad, allowed the appeal of a Charitable Trust, granting deduction under Section 24(a) of the Income Tax Act for the assessment year ... Income from house property - deduction under section 24 denied - HELD THAT:- We note that the learned CIT (A) had confirmed the order of the AO denying the deduction under section 24 of the Act after placing reliance on the order of Chennai tribunal in case of of Anjuman-E Himayath- E-Islam [2021 (4) TMI 1176 - MADRAS HIGH COURT] for A.Y.2009-10. However we find that the order which has been relied upon by the learned CIT (A) has been challenged before the Hon’ble Madras High Court, [2021 (4) TMI 1176 - MADRAS HIGH COURT]where Hon’ble bench reversed the order of the Tribunal. Thus deduction u/s 24(a) is allowable to the assessee. Hence, the ground of appeal of the assessee is allowed. Issues:1. Deduction under Section 24 of the Income Tax Act for a Charitable Trust.2. Rejection of rectification application under Section 154 by the Deputy Commissioner of Income Tax CPC, Bangalore.3. Appeal against the decision of the CIT(A) regarding the denial of deduction under Section 24.4. Condonation of delay in filing the appeal.5. Interpretation of provisions of Section 24 and applicability to the assessee.6. Applicability of case laws in determining the deduction under Section 24.Analysis:1. The appeal was filed by a Charitable Trust against the order passed by the Commissioner of Income Tax (Appeals)-9, regarding the denial of deduction under Section 24 of the Income Tax Act for the assessment year 2015-16. The appellant contended that the provision of Section 24(a) was applied in the return and should be considered for allowing the deduction. The appellant argued that there is no restriction on the status of the assessee as per Section 24(a) and satisfied the conditions of Section 22 for claiming the deduction. The appellant also cited various decisions to support their claim for the deduction.2. The Deputy Commissioner of Income Tax CPC, Bangalore, rejected the rectification application filed by the assessee under Section 154, stating that there was no prima facie error in the order and that the deduction under Section 24(a) was not allowed on the income from House Property. The rejection was based on the computation of income from House Property and the disallowance of the deduction claimed by the assessee.3. The CIT(A) upheld the decision of the Assessing Officer, denying the deduction under Section 24, citing a Chennai Tribunal order. However, the appellant challenged this decision before the ITAT, Ahmedabad, referring to a Madras High Court judgment that allowed the deduction under Section 24(a) for the assessee. The ITAT, following the Madras High Court judgment, allowed the ground of appeal of the assessee, thereby allowing the deduction under Section 24.4. The appeal was filed with a delay of 192 days, and the appellant submitted an affidavit explaining the reasons for the delay. The Bench, after considering the genuineness of the case, allowed the condonation of the delay in filing the appeal.5. The interpretation of provisions of Section 24 was crucial in determining the applicability of the deduction to the assessee. The counsel of the assessee explained the provisions of Section 24 and argued for the deduction to be allowed, citing relevant case laws to support their stance.6. The ITAT, Ahmedabad, considered the arguments presented by both parties, reviewed the relevant case laws, and ultimately allowed the appeal of the assessee, granting the deduction under Section 24(a) based on the Madras High Court judgment. The order was pronounced in the Court on 28/01/2022 at Ahmedabad.