2022 (6) TMI 1079

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....see is a charitable trust registered under the Income tax Act, 1961 and enjoying benefits of section 11 and 80G of the Act. For the Asstt.Year 2016-17, the assessee has filed its return of income on 28.10.2016 declaring Rs.2,31,725/-. The return of income was processed under section 143(1) of the Act by intimation order dated 30.3.2018, wherein income of the assessee has been determined at Rs.26,95,625/- and demanded tax of Rs.7,02,246/- BY THE Dy.Commissioner of Income-tax, CPC Centre, Bangalore. It is seen from the intimation that deduction of Rs.5,40,082/- claimed by the assessee has been reduced to Rs.2,51,182/-. Similarly deduction of Rs.21,75,000/- claimed under section 11(2) has also not allowed, resulting in increased total income o....

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.... Year 2015-16 and the appeal of the appellant was dismissed vide appellate order dated 15.08.2017. The appeal before the Hon'ble ITAT (registered as ITA No.2337/Ahd/2017) is reported to be pending as on the date of passing the appellate order. Therefore, to maintain the consistency of the stand taken by the predecessor in the office for A.Y.2015-16 on the identical issue, the appeal is required to be dismissed." 5. As per the above observation of the ld.CIT(A), the appeal of the assessee in ITA No.2337/Ahd/2017 for the A.Y 2015-16 was pending before the Tribunal when the CIT(A) assed the impugned order on 18.6.19. However, both the parties before us have not brought to our knowledge about the status of that case before the Tribunal. On ver....

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....tatement of case are as follows : The assessee-trust accumulated Rs.46,184 during the accounting years relevant to the assessment years 1973-74 to 1976-77. During the previous year relevant to the present assessment year, accumulated income ceased to be invested in fixed deposit with the Indian Bank and it was, therefore, deemed to be the income of the trust in the previous year in which it ceased to remain invested or deposited in terms of clause (b) of sub-section (3) of section 11 of the Income-tax Act, 1961. The Income-tax Officer was of the opinion that the assessee was not entitled to accumulate 25% of this deemed income because permitting it to do so would amount to a double benefit to the assessee. He, therefore, assessed the enti....

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....iled to show us any infirmity in the order passed by the Tribunal, the question is answered in the affirmative and in favour of the assessee." 7. In the light of the above, let us consider the scope of section 154 for making prima facie adjustment while processing return under section 143(1)(a) of the Act i.e. process of dealing with the return is an ex parte process. It is pertinent to observe that whenever any debatable issue is involved an explanation of the assessee is required, then on such issue, no prima facie adjustment in an ex parte proceedings can be made. Reading of judgment of Hon'ble Kolkatta High Court (supra), and if facts are looked into, then it would reveal that both the issues were debatable one, where more than one op....