IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH AT KOLKATA [Virtual Court]

Before SHRI SONJOY SARMA, JUDICIAL MEMBER &

SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.: 14/PAT/2018 Assessment Year: 2014-15 Society for Advancement of ACIT(Exemption), Circle-

Village Economy Vs. Patna (Appellant) (Respondent)

PAN: AAJTS1557R Appearances:

Assessee represented by : Dipak Kumar, CA.

Department represented by : Md. Shadab Ahmed, CIR(DR).

Date of concluding the hearing : 14-October-2025 Date of pronouncing the order : 09-December-2025

ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-I, Patna [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250(6) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2014-15 dated 24.11.2017.

2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:

“1. FOR THAT Ld. CIT(A) erred in law and on the facts in confirming action of A.O. in holding that the appellant trust carried on activity in the nature of business and profession under the guise of Trust Act, 1882. Ld. CIT (A) ought to have held that the appellant trust registered u/s. 12AA of the Act working in the area of education and relief to poor carried on activities of charitable purpose and not any business or profession.

2. FOR THAT Ld. CIT(A) erred in law and on the facts in confirming action of AO assessing income of the appellant Trust at Rs 1,79,64,179/- by invoking proviso to section 2(15) of the Act denying of exemption u/s 11 of the Act. Both the lower authorities erred in not appreciating submissions that the appellant trust being registered u/s 12AA of the Act as a public charitable trust, the exemption u/s 11 cannot be denied. The order of Ld. CIT (A) being unjust and against principles of Natural Justice deserves to be quashed.

3. FOR THAT Ld. CIT (A) erred in law and on facts in confirming action of AO in holding the activities of the appellant trust as 'advancement of any other object of general public utility not granting benefit of section 11 & 12 of the Act. Ld. CIT (A) ought to have held appellant eligible for exemption u/s. 11 of the Act. It be so held now.

4. FOR THAT Ld. CIT (A) erred in law and on facts in confirming action of AO refusing to grant exemption u/s.11 and assessing income of the appellant u/s 28 to 44 of the Act. Both the lower authorities failed to appreciate that proviso to section 2(15) was not applicable to the appellant and further provisions of Section 13(8) were also not applicable. It be so held now by granting exemption u/s. 11 of the Act as claimed.

5. FOR THAT Ld. CIT (A) erred in law and on facts in not appreciating the fact that the appellant was not engaged in any commercial/business activity but was carrying out charitable activity in accordance with its objects for which Registration u/s 12AA of the Act was granted to the appellant trust.

6. Your petitioner craves leave to amend, modify and for alter grounds and for to adduce and rely upon such further evidences and/or documents as may be required at any time before and during the time of hearing.”

3. Brief facts of the case are that the return of income of the assessee Trust was filed showing ‘NIL’ income on 28.06.2015 which was selected for limited scrutiny under Computer Assisted Scrutiny Selection (in short 'CASS'). Statutory notices u/s 143(2) and 142(1) of the Act were issued and duly served upon the assessee. The assessee Trust derives income from the activities of financial inclusion and for the year under consideration, was registered u/s 12AA of the Act vide registration no. 201/2011-12 dated 21.02.2012 by the CIT-I, Patna. During the course of the assessment proceeding, the details and books of account and vouchers were examined and the limited scrutiny was converted to complete scrutiny with the approval of the competent authority as per the CBDT Instruction No. 5/2016 dated 14.07.2016. The Assessing