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2021 (9) TMI 241 - AT - Income TaxRectification u/s 154 - Exemption u/s 11 - accumulation of income for charitable purpose - mistake apparent from the record - whether accumulation at 15% has to be computed on the gross receipts in terms of section 11(1)(a) of the Act and not on the net receipts as computed by the AO? - Whether Computer Processing Centre (CPC) was not competent to make the adjustment under section 143(1) ? - debatable issue - HELD THAT:- We find no basis for the AO to have made the impugned adjustment under section 143(1) of the Act. The law is well settled that the accumulation of 15% under section 11(1)(a) of the Act has to be computed on the income (gross receipts) before application i.e., on the gross receipts and not on the amount remaining after expenditure for charitable purpose (net income). Case followed PROGRAMME FOR COMMUNITY ORGANISATION [2000 (11) TMI 4 - SUPREME COURT] In the CBDT’s Circular No.68 dated 17.11.1971 supports the plea of the assessee that an interpretation of law by the Supreme Court if not followed in an assessment could constitute a mistake apparent from the record and therefore rectifiable under section 154 of the Act. In this background of facts, we are of the view that there was a mistake apparent on the face of the record which ought to have been rectified under section 154. It is clear from the order passed under section 154 of the Act that the AO has computed accumulation of 15% on the net revenue after reducing all the expenditures in the form of application of income for charitable purpose. This approach of the AO was clearly contrary to the decision of the Hon’ble Supreme Court cited by the learned Counsel of the assessee. In these circumstances, we are of the view that the mistake sought to be rectified by the assessee ought to have been rectified by the Revenue authorities - Decided in favour of assessee.
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