IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER Assessment year : 2022-23 Indian Medical Association Pune Branch DCIT, Exemption Circle, 992, DR Nitu Mandke House, Tilak Vs. Pune Road, Pune – 411002 PAN: AAATI2653M (Appellant) (Respondent)

Assessee by : Shri Nikhil S Pathak Department by : Shri Vidya Ratna Kishore Date of hearing : 18-12-2025 Date of pronouncement : 20-02-2026

O R D E R

PER R.K. PANDA, V.P:

This appeal filed by the assessee is directed against the order dated

30.06.2025 of the Ld. Addl / JCIT(A)-5, Delhi relating to assessment year 2022-

23.

2. Facts of the case, in brief, are that the assesse is a public charitable trust formed under the Bombay Public Trust Act, 1950. It carries on various activities towards benefit of society at large. It filed its updated return of income u/s 139(8A) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 18.12.2023 declaring total income of Rs.7,72,110/-. The return was filed after offering short term capital gain of Rs.3,73,849/- and long term capital gain of Rs.3,98,857/-, while simultaneously claiming exemption u/s 11 of the Act. According to the Assessing Officer it has claimed to have utilized more than 85% of its gross receipts of Rs.1,77,08,249/- and encashment proceeds of Rs.1,60,70,939/- towards charitable purposes. However, the CPC vide intimation u/s 143(1) of the Act disallowed the exemption claimed u/s 11 of the Act and assessed the income of the assessee at Rs.3,45,51,290/-.

3. Before the Ld. Addl / JCIT(A) the assessee filed the following financial details:

4. It was argued that the assessee has offered its short term capital gain and long term capital gain properly and also updated return filed u/s 139(8A) of the Act. It was submitted that the CPC has not taken in to account the claims made by the assessee u/s 11 and 12 of the Act regarding utilization of income and wrongly calculated the taxable income at Rs.3,45,51,290/-. It was submitted that even if the assessee has made any procedural mistake it will not allow the Assessing Officer for taxing the gross collection. Referring to the audited accounts it was submitted that gross collection is Rs.1,77,08,249/- against which the assessee has incurred expenditure of Rs.99,49,982/- and therefore, the net surplus is only Rs.77,58,267/-. It was further submitted that the trust has spent around 56.18% of the gross receipts and has apportioned Rs.84,26,361/- for future use in subsequent years which has resulted into more than 85% usages of the gross collection during the year and therefore, taxation of gross income is wrong. Relying on various decisions it was submitted that the application of section 56 of the Act is either unwarranted or bad in law. It was further submitted that only the long term capital gain and short term capital gain has to be taxed and also merely because the assessee could not file return in time and could not make claim of TDS amounting to Rs.3,05,557/- as appearing in Form No.26AS, the same cannot be denied to the assessee.

5. However, the Ld. Addl. / JCIT(A) was not satisfied with the arguments advanced by the assessee and held that the exemption was denied not on the basis of nature of income taxable u/s 56 of the Act but it is due to the assessee’s lapse in timely filing of the audit report. He noted that the Income Tax Act as amended by the Finance Act, 2017 makes it mandatory for charitable and religious trusts to file their return of income within the due date specified u/s 139(1) of the Act to claim exemption u/s 11 of the Act. The updated return facility u/s 139(8A) of the Act allows taxpayers to file or update returns within 24 months from the end of the relevant assessment year. However, this provision does not override the specific conditions for claiming certain exemptions or deductions such as those u/s 11 which require timely filing. According to him, if the return is not filed