2024 (8) TMI 428

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....assessee is a charitable trust registered under the Bombay Public Trust Act and also registered under Section 12A of the Income Tax Act, 1961 (in short 'the Act'). The return of income for A.Y. 2016-17 was filed on 03.10.2016 declaring Nil income. In the course of assessment, the AO found that the assessee had received corpus donation of Rs. 2,71,12,111/- for construction of building. Out of this amount, the Trust had utilized Rs. 2,36,23,637/- for the purpose of construction of building. While filing the return of income, the assessee had claimed exemption for corpus donation under Section 11(1)(d) of the Act. It also claimed amount of building construction as income applied for the objects under Section 11(1) of the Act. The AO rejected t....

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....submitted in assessment proceedings regarding corpus donation. 3. Ld. NFAC erred in law and on facts failed to appreciate that appellant did not claim the expenditure in return of income and presentation it is error accordingly, it is not case of penalty. 4. Ld. NFAC ought to have considered fact that non acceptance of bona fide claim does not lead to furnishing inaccurate particulars of income which leads to penalty. 5. The order passed by lower authorities is required to be quashed as same is without recording proper satisfaction." 6. Shri S. N. Soparkar, Sr. Advocate appearing for the assessee fairly admitted that there was a mistake on the part of the assessee in the computation of income and deduction in r....

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....ave carefully considered the rival submissions. It is found from the computation of income that "income before application of income" was Rs. 1,75,11,224/-. The assessee had deducted the following amounts towards application of income: (i) Amount applied u/s 11(1) (As per I/E A/c) 14859101 (ii) Building Construction 23623637 (iii) Furniture and Equipment 3670129    42152867 Thus, the total amount reduced towards application of income was Rs. 4,21,52,867/-, which was restricted to the extent of "income before application" which was Rs. 1,75,11,224/-. Even if we exclude the building construction amount of Rs. 2,36,23,637/-, the remaining amount was still sufficient to claim the deduction under Section 11(1....