Income from Charitable Activities reflected as "Income from Other Sources" by mere Punching Error: ITAT grants exemption u/s 11 of Income Tax Act [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) grants an exemption under Section 11 of the Income Tax Act, 1961 as the income from charitable activities was reflected as income from other sources by mere punching error.

The assessee is a charitable trust engaged in the activity of running a school for children of the poor and needy class of society in Ahmedabad. In the return of income filed by the assessee, he claimed his entire income exempt from tax in terms of Section 11 of the Income Tax Act which was denied in the intimation made by the Centralised Processing Centre (CPC) under Section 143(1) of the Income Tax Act.

The counsel for the assessee submitted that its income from charitable activities was inadvertently reflected in the return filed online, as income from other sources, amounting to Rs.51,59,168/-. And because of an inadvertent error in punching the details relating to its income, the benefit of the application of its income to charitable purposes which was disclosed at Rs.42,48,574/-was completely denied to the assessee, and the entire income relating to charitable activities amounting to Rs.51,59,168/- assessed to tax, levying tax on the same to the tune of Rs.13,72,751/-.

The Departmental Representative stated that in view of the fact that, the assessee has also sought an alternative remedy by filing a rectification application before the Assessing Officer, this appeal be also restored back to the Assessing Officer to be considered along with the rectification application.

The Two-member bench comprising of Annapurna Gupta (Accountant member) and Madhumita Roy (Judicial member) held that the issue was restored back to the file of the Assessing Officer to consider the claim of the assessee to exempt its entire income earned from the charitable activities under Section 11 of the Income Tax Act after taking note of all the evidences filed by the assessee. This issue is to be considered along with 154 applications filed by the assessee since both relate to the same aspect. Thus, the appeal of the assessee was allowed for statistical purposes.

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Shree Vasan Sheri Kelavani Samiti Trust vs ITO , 2023 TAXSCAN (ITAT) 2413 , Shri S.N. Divetia, Shri Samir Vora , Ms.Saumya Pandey Jain