Tribunal Upholds Exemption Even with ITR-6 Filing; Consistency Key in Dismissing Revenue's Appeal as Infructuous.

The tribunal upheld the CIT(A)'s decision to grant the assessee exemption under section 11, despite filing returns using ITR-6, emphasizing consistency and the prohibition against altering positions on identical issues with unchanged facts over different years. All grounds of appeal by the revenue, including those concerning depreciation, were dismissed as academic and infructuous. The revenue's appeal was dismissed, and the order was pronounced on 23rd October 2024 in Chennai.

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Issues:
Challenge to grant of exemption u/s 11 despite filing return using ITR-6.
Agitation over grant of depreciation on assets acquired from government grants.

Analysis:

1. The primary issue in this case was the challenge by the revenue against the grant of exemption u/s 11 to the assessee despite filing the return using ITR-6. The revenue contended that the doctrine of res judicata does not apply to direct taxes. Additionally, the revenue raised concerns regarding the grant of depreciation on assets acquired from government grants.

2. The factual background revealed that the assessee trust filed its income tax return using ITR-6 and was engaged in executing common effluent treatment plants for leather industries in Tamil Nadu. The trust received grants from the Government of India and contributions from promoters for project execution. During scrutiny, the assessing officer noted the claim of depreciation and grants received for asset acquisition. The assessing officer initially considered the assessee's no objection to being assessed as a registered entity u/s 12AA. However, adjustments were made to the returned loss, treating it as profit and adding depreciation, project fund amounts, and ROC fees.

3. The CIT(A) held that consistency and res judicata principles applied, as in the preceding assessment year, the assessee was allowed exemption u/s 11 despite filing using ITR-6. The CIT(A) rejected alternative grounds raised by the revenue as infructuous. The DR argued in favor of the assessing officer's order, while the AR supported the CIT(A)'s decision. The material on record indicated that the assessee was granted exemption u/s 11 for the previous assessment year, and the same situation regarding ITR-6 filing existed. The CIT(A)'s decision was upheld based on consistency and the prohibition against taking different stands on the same issue with unchanged facts over different years.

4. The tribunal concurred with the CIT(A)'s decision to grant exemption u/s 11 and found no need for interference. It was emphasized that the revenue cannot change positions on the same issue with the same facts in different years. The tribunal dismissed all grounds of appeal raised by the revenue, including those related to depreciation, as academic and infructuous. Consequently, the appeal of the revenue was dismissed, and the order was pronounced on 23rd October 2024 in Chennai.

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