TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 957
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....that the appellant's income is exempt from taxes under section 10(23C)(iliad) of the Act and it had inadvertently claimed exemption under section 10(23C)(illac) of the Act, on the facts and circumstances of the case. 4. The learned CIT(A) has failed to appreciate that there is no requirement to file audit report to claim exemption under section 10(23C)(iliad), on the facts and circumstances of the case. 5. The learned assessing officer ought to have assisted the appellant in making a correct claim in the return of income and should not have taken advantage of ignorance of the appellant on the facts and circumstances of the case. 6. Without further prejudice, tax is to be levied only on net income & not on gross receipts, on the facts and circumstances of the case. 7. It is a settled proposition of law that 'consent cannot confer Jurisdiction' on the facts and circumstances of the case. 8. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, peri....
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....ncome claimed exemption u/s 10(23C)(iiiac) of the Act and arrived at the same taxable income of Rs. 2,29,680/- as claimed in the original return after claiming expenditure of Rs. 1,58,85,006/- against the gross receipts of Rs. 1,61,14,686/-. 5.1 The ld. Deputy Director of Income Tax, CPC, Bengaluru before passing an intimation u/s 143(1) of the Act issued a notice dated 26/12/2023 seeking information/clarification on the data in the updated return filed on 23/02/2023 by mentioning the error description as reproduced below- 5.2 On going through the above, we take a note of the fact that the error description as mentioned by the CPC, Bengaluru is that the assessee has claimed exemption u/s 10(23C)(iiiab) in Part B- TI (Part B2), however the Government grants received by the institution does not does not exceed 50% of the total receipts. Hence, the exemption claimed at Sl. No. 2a of Part B-TI(Part B2) is not allowable in accordance with the above said provisions r/w Rule 2BBB. 5.3 Thereafter, on 29/12/2023 i.e. after a gap of just 2 days of issuing notice seeking information/clarification, the same ld. Deputy Director of Income Tax, CPC, Bengaluru passed an intimation u/s 143....
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....e Act instead of u/s 10(23C)(iiiad) of the Act. Lastly AR of the assessee submitted that the Order of the ld. Addl/JCIT(A) Kochi is completely non- application of mind as the furnishing of Audit Report in Form No.10B within the specified date as required u/s 12A(1)(b) & the provision of the section 11 & 12 does not apply the present case of the Assessee. 10. The ld. D.R. on the other hand relied on the order of the ld. Addl/JCIT(A) Kochi and submitted that as the assessee had filed its return of Income belatedly & the Audit Report in Form 10B had also not been furnished by the assessee, the CPC has rightly added the entire Gross receipts as Income of the assessee. 11. We have heard the rival submissions and perused the materials available on record. The assessee in the present case is a charitable Trust providing education to the public at large by running a School and declared Gross Receipts from School Fee amounting to Rs. 1,57,59,742/- and RTE grants from Government amounting to Rs. 3,54,944/- & thus declared total Gross receipts of Rs. 1,61,14,688/- in its updated Return filed on 23.02.2023 for the Asst. year 2020-21. Further, the assessee in the said Return had also clai....
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....,61,14,686/- as income of the assessee without providing adequate opportunity to the assessee to clarify. We are of the considered opinion that there is a clear violation of the principles of natural justice by providing inadequate opportunity of being heard to the assessee. We are also of the opinion that minimum statutory requirement of 30 days to submit the response to the letter/intimation is not merely a procedural formality but an essential aspect of due process. It ensures the legal process remains fair & just. In view of the above, as the 30 days requirement are mandatory requirement and failure to comply with would render the intimation passed u/s 143(1) of the Act invalid. Therefore, on this ground alone, the intimation u/s 143(1) of the Act would be vitiated & invalid in law. Thus, the intimation passed by the ld. DDIT, CPC, Bengaluru is hereby quashed. Thus we are not adjudicating the other grounds raised on the merits of the case. 12. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 28th July, 2025 ============= Document 1 PFA Error Description Category As Entered by taxpayer As Computed in processing Proposed....