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2023 (8) TMI 1108 - AT - Income TaxRectification u/s. 154 - Assessment of income after denial of exemption u/s 11 - assessee had failed to file “Form No.10A” and “Form No.10B” within the stipulated period as per the mandate of the Income Tax Act - as argued both the lower authorities had erred in assessing the gross receipts of the assessee society as its income - claim of the Ld. AR that the A.O., after treating the assessee as an unregistered society, was obligated to have considered its claim for deduction of expenses raised in the income and expenditure account while deducing its taxable income - HELD THAT:- As where the assessee’s claim for exemption u/s. 11 & 12 of the Act is declined, it is incumbent for the A.O. to deduce its total income in line with commercial principles. Accordingly, assessing the gross receipt of the assessee society by the A.O. suffers from a mistake which being glaring, patent, evident, and apparent from the record, had rendered the same amenable for rectification u/s. 154 of the Act. Before proceeding any further, we may herein observe that the declining of the assessee’s claim for exemption u/s. 11 & 12 of the Act, perse would not justify assessing its gross receipt as its income for the year under consideration. Even though the assessee society may not be entitled to exemption u/s. 11 & 12 of the Act, its income under any circumstance must be deduced per commercial principles, i.e., after considering its claim of expenses per extant law. Our view above is fortified by the order passed in the case of Jain Shwetamber Murtipujak Sangh [2023 (5) TMI 960 - ITAT RAIPUR] wherein involving identical facts, though declining of the assessee’s claim for exemption u/s. 11 & 12 for delayed filing of “Form 10” was upheld by the Tribunal but its alternative claim that the A.O was obligated to have considered its claim for deduction of expenses raised in the income and expenditure account was accepted. The matter was restored to the file of the A.O. to consider the assessee’s claim for deduction of expenses as debited in the income and expenditure account under the provisions of the Act. As restore the case of the assessee appellant to the file of the A.O with a direction to consider its claim for deduction of expenses as debited in the income and expenditure account, i.e., to the extent the same was allowable under the Act.
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