Trust eligible for benefit of sec. 11, though ITR was filed in response to reassessment notice: ITAT Delhi

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Trust eligible for benefit of sec. 11, though ITR was filed in response to reassessment notice: ITAT Delhi

nited Educational Society v. JCIT – [2019] 107 taxmann.com 127 (Delhi – Trib.)
Assessee was an educational society running various educational institutions. It was granted registration under section 12A. Assessing Officer (AO) noted that the society had made huge investment in Land & Building but didn’t file any return of income (ITR). He issued notices under section 148 asking the assessee to file the return of income for the purpose of assessing the income which had escaped assessment.
In response, assessee filed the ITR showing ‘nil’ taxable income after application of income as allowed under section 11. However, AO disallowed the benefit of the exemption under section 11 on the reasoning that assessee-society had not filed the return as required under section 139(4A), read with section 12A(b) of the Income-tax Act in time. Accordingly, the income was assessed as income from business/profession in the status of an AOP.
The Delhi ITAT held that failure to file the return under section 139(4A) couldn’t be interpreted to mean that income couldn’t be computed in the case of a charitable trust under section 11.
Whether it is a case of a regular assessment or a case of an assessment consequent to issue of notice under section 148, not only the procedure of return as given in section 139 has to be applied, but also such income has to be computed on the basis of such return in accordance with the provision of the Act, which, of course, will be subject to any specific provision in the Act which itself bars a claim or an exemption.
There is no such provision in the Act that in case return is not filed by charitable society under section 139(4A), its income cannot to be computed in accordance with the provision of the Act. Once the return has been filed in response to the notice issued under section 148, the provisions of this Act shall apply as if such return was a return required to be furnished under section 139. Thus, return filed under section 148 was to be treated as return filed under section 139, which will include sub-section (4A) of section 139.

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