2024 (7) TMI 1053

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.... 1961 ["the Act"] for Assessment-Year ["AY"] 2020-21, the assessee has filed this appeal on following grounds: 1. That the assessee has been engaged in charitable activities since 2007 and has been fulfilling all criteria, condition for claiming exemption u/s 11 of the Income-tax Act, 1961. 2. That for the assessment year 2020-21 the extended deadline for filing a revised return was May 31,2021. The notice of intimation of demand was issued on 10.07.21, the assessee was unaware of the error in the return until the notice was served. Due to the time limit of revised return being lapsed the assessee could not revise the return and eventually revised Form 10B. 3. That the revised Form 10B is in conformity with the au....

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....d of "Rs. 43,98,666/-" [maximum upto 15% of gross receipts of Rs. 3,21,42,131/-] being the amount of exemption available to assessee by way of accumulation or set apart for charitable use under second part of section 11(1)(a). This also led to a spiral mistake in filing of return of income by assessee without claiming exemption of Rs. 43,98,666/- under second part of section 11(1)(a). This further led the AO to compute assessee's total income at Rs. 43,98,665/- and create demand of tax plus interest in the intimation u/s 143(1) dated 10.07.2021. 4. Ld. AR for assessee submitted that when the assessee, after receiving intimation u/s 143(1), came to know about the mistake that had taken place, the assessee filed revised audit report (Form ....

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....iate relief to assessee. Ld. DR for revenue left the matter to the wisdom of Bench. 5. After a careful consideration, we find a strong merit in the arguments of Ld. AR as narrated above. So far as legal provision is concerned, the section 11(1)(a) has two parts, namely first part allows exemption based on 'actual application' made by assessee to charitable purpose and the second part allows exemption for 'accumulation or set apart of income' upto 15% of gross-receipts. In present case, the gross-receipts of assessee at Rs. 3,21,42,131/- have been assessed by AO after giving the first part of exemption at Rs. 2,77,43,466/- as mentioned in original Form No. 10B and claimed in original return. However, it is only the second part of same pro....