The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed a reassessment of the Institute of Company Secretaries of India’s ( ICSI ) income tax exemption claim.
The case in question revolves around the filing of a Return of Income ( ROI ) by the appellant/assessee, declaring a total income of Rs. Nil and seeking a refund based on claimed exemptions.
However, discrepancies emerged when the Centralized Processing Centre ( CPC ) in Bengaluru credited less Tax Deducted at Source ( TDS ) than what was claimed in the Income Tax Return ( ITR ). Consequently, the initial refund amount differed from the claimed figure, triggering a series of rectification applications and Section 154 orders under the Income Tax Act, 1961.
The Centralised Processing Centre in Bengaluru initially failed to credit the balance TDS, resulting in a substantial demand due to disallowance under Section 11(2) of the Income Tax Act, 1961. Subsequent rectification applications led to a revised order granting full TDS credit but still denying the claimed exemption under Section 11(2), leading to further demand.
In response, the appellant appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], which partially allowed the claim under Section 11(2) but rejected the balance claim due to non-accumulation of funds under Section 11(5) of the Income Tax Act.
This prompted the assessee to escalate the matter to the Tribunal, citing compliance with Section 12A and providing relevant investment documents under Section 11(5) to the CIT(A).
The Tribunal Bench of Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member) has partially upheld the appellant’s appeal and remanded the case to the Assessing Officer for further examination, acknowledging the intricacies and nuances involved.
The Institute of Company Secretaries of India ( ICSI ) was represented by Ranjan Chopra whereas the Respondent-revenue was represented by Sapna Bhatia.
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