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2022 (4) TMI 1603 - AT - Income TaxDisallowance of entire expenditure by the CPC u/s 143(1) - assessee submitted that the adjustment made by the CPC Bangalore does not fall under any of the limbs prescribed u/s 143(1) as debatable issue cannot be subject matter of adjustment u/s 143(1) - rectification application rejected - Also assessee contention that in case of charitable society, even if benefit u/s 11 and 12 of the Act is denied and its income was brought to tax as “Income from Other Sources”, all relevant expenditures are also to be allowed u/s 57(iii) of the Act. HELD THAT:- CPC, Bangalore, processed the return u/s 143(1) of the Act and disallowed the expenses as claimed in the return of income. Assessee filed rectification application before the AO, which was rejected by the AO and the ld. CIT(A) also dismissed the appeal filed by the assessee holding that since the status of the assessee is AOP (Trust) on which there is no threshold limit, therefore, the calculation of the tax rate at maximum marginal rate is correct. However, the AO did not elaborate regarding the disallowance of entire expenditure claimed by the assessee i.e. 143(1) by the CPC, Bangalore. A perusal of the same shows that the adjustment made by the CPC, Bangalore, does not fall under any of the limb prescribed u/s 143(1) of the Act. Further, the submission the ld. Counsel that no such adjustment was made in earlier Assessment Years and there is no change in the facts during the year under consideration, also could not be controverted by the ld. DR. Even otherwise also, as find in the case of DDIT (E) vs Petroleum Sports Promotion Board [2014 (3) TMI 298 - DELHI HIGH COURT] has held that in case of a charitable society even if benefit u/s 11 & 12 of the Income Tax Act, 1961 is denied and its income was brought to tax as income from other sources, all relevant expenditures were also to be allowed. Thus adjustment made by the CPC, Bangalore, and confirmed by the ld. CIT(A) is not warranted being contrary to provisions of section 143(1) - Decided in favour of assessee.
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