ITAT remands case to AO for verification of accumulated funds computation discrepancy under section 11(2) between return and Form 10

ITAT Delhi remanded matter to AO for verification regarding discrepancy in accumulated funds computation under section 11(2) between return of income and Form 10. Assessee argued CIT(A) violated natural justice principles by not seeking clarification on alleged investment discrepancies. ITAT held assessee's claim required verification and directed AO to verify the claim and modify assessment if found correct and lawful. Appeal allowed for statistical purposes with matter restored to AO's file.

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Issues Involved:
The appeal pertains to the denial of benefit of exemption claimed u/s 11(2) of the Income Tax Act, 1961 amounting to Rs. 1,20,00,33,672/- and the subsequent partial allowance of the claim by the Ld. CIT(A) leading to an appeal before the Tribunal.

Grounds of Appeal:
1. The order of the Ld. CIT(A) partly sustaining the order of the Assessing Officer is challenged.
2. The Ld. CIT(A) erred in only partly allowing the claim made u/s 11(2) of the Income Tax Act.
3. Benefit of balance claim on account of non-accumulation of funds u/s 11(5) was not granted.
4. Allegation of the order being against the principles of natural justice.
5. Disallowance made u/s 11(2) by the Centralized Processing Center and Ld. CIT(A) was contested.
6. Failure to appreciate compliance with provisions of u/s 11(2) for e-filing Form 10 before the due date.

Facts and Arguments:
The appellant filed the Return of Income (ROI) claiming exemption u/s 11(2) for an amount of Rs. 120,00,33,672/-. Discrepancies in TDS credit and refund amount led to rectification applications u/s 154. The subsequent rectification order disallowed the claim made u/s 11(2), resulting in a demand. The appellant contested this denial before the Ld. CIT(A) and subsequently appealed to the Tribunal.

Ld. CIT(A) Findings:
The Ld. CIT(A) verified the figures and accumulation details provided by the appellant. It was found that the actual accumulation was lower than the required amount u/s 11(2), leading to a partial allowance of the claim. The remaining amount was deemed ineligible for deduction due to non-accumulation in specified modes u/s 11(5).

Tribunal Decision:
The Tribunal found the claim of the assessee needing further verification and deemed it judicially expedient to restore the matter back to the file of the Assessing Officer for necessary verification. If the claim is found correct and in accordance with the law, the assessment should be modified accordingly. The appeal of the assessee is treated as allowed for statistical purposes.

Conclusion:
The Tribunal ordered the matter to be verified by the Assessing Officer and if found correct, to modify the assessment accordingly, allowing the appeal for statistical purposes.

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