Charitable trust wins against tax officer who raised new issues after ITAT ruling on sections 69A and 115BBE

The Bombay HC ruled in favor of a charitable trust operating a temple and community hall. The ITAT had determined the trust's total income as nil for AY 2017-18, finding sections 69A and 115BBE inapplicable to voluntary donations from devotees. Despite this, the AO improperly raised new controversies regarding Form 10B filing deadlines and section 11 exemptions when giving effect to the ITAT order, ignoring that these issues weren't contested before the ITAT and exemptions were already accepted in the original assessment. The HC quashed the AO's order dated 30th November 2023, directing refund of all taxes paid by the assessee.

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Issues Involved:

1. Quashing and setting aside the impugned order.
2. Refund of taxes paid by the petitioner.
3. Incorrect application of Section 69A and Section 115BBE of the Income Tax Act.
4. Entitlement to exemption under Section 11 of the Income Tax Act.
5. Filing of Form 10B within the due date.

Summary:

1. Quashing and Setting Aside the Impugned Order:
The petitioner sought a writ of certiorari to quash the impugned order dated 30th November 2023, which allegedly failed to correctly give effect to the Income Tax Appellate Tribunal (ITAT) order and wrongly recorded an additional tax payable amount of Rs. 4,23,47,009/- after adjusting Rs. 40,06,299/- already paid.

2. Refund of Taxes Paid by the Petitioner:
The petitioner, a charitable organization under Section 12A of the Income Tax Act, claimed that the Assessing Officer (AO) did not consider the ITAT order and incorrectly assessed additional taxes. The High Court directed the AO to issue a refund of all taxes paid or recovered from the petitioner for AY 2017-2018, as the ITAT had determined that there was no income chargeable to tax.

3. Incorrect Application of Section 69A and Section 115BBE of the Income Tax Act:
The ITAT found that Section 69A was not applicable to the petitioner's case and, consequently, Section 115BBE was also inapplicable. The ITAT concluded that the provisions of Section 115BBC did not apply to donations received by the petitioner in donation boxes from numerous devotees, as these were not considered anonymous donations under the Act.

4. Entitlement to Exemption under Section 11 of the Income Tax Act:
The original assessment order dated 26th December 2019 accepted the petitioner's gross receipts as exempt under Section 11 of the Act. However, the new AO disallowed this exemption due to the alleged late filing of Form 10B. The High Court noted that this amounted to an unauthorized review of the earlier assessment order, which had already granted the exemption.

5. Filing of Form 10B within the Due Date:
The petitioner contended that Form 10B was filed on 24th February 2018, within the due date. The CIT(A) directed the AO to verify this and allow the exemption if the form was filed on time. The High Court observed that the AO's insistence on the time limit specified under Section 44AB was misplaced, as the ITAT had not found any issue with the filing date.

Conclusion:
The High Court quashed the impugned order dated 30th November 2023 and directed the AO to issue a refund to the petitioner. The Principal Commissioner of Income Tax was instructed to assign the task to an officer other than Mr. Meet Kumar and ensure compliance with the ITAT and High Court orders. The petition was disposed of with no order as to costs.

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