Question And Answer
Subject: SEC.11(1A) of the Act.
Querist: Prakash
Answered by:
Tags: ,
Date: July 7, 2023
Query asked by Prakash

Assessee is Charitable trust registered U/Sec.12 A of the Act and it has received Rs. 5 lakhs on sale of  lease hold rights. Trust has invested Rs. 5 lakhs in fixed Deposits for a period more than 12 month. However while filing Return of income assessee has insteade of disclosing under section 11(1A) through oversight has disclosed u/Sec. 11(2). Intimation received U/Sec. 143(1) Assessing income at Rs. 5 lakhs on the ground that assessee has not uploaded form 10 for exercise option u/Sec. 11(2). Assessee Trust has filed rectification u/sec. 154 mentioning the error happened while filling Return of Income also explained that throughoversight exemption is claimed u/Sec. 11(2) and not 11(1A) since invested the amount in Fixed deposit more than 12 month and same has been rejected on the ground that assessee trust has not uploaded form 10 . Assessee filed an appeal against the order U/sec. 154 and CiT a has allowed the appeal on the ground that assessee has invested amount received on sale of lease hold rights in FD with Bank more than 12 months u/Sec 11(1A) of the Act.

Whether CIT A is right and whether assessee can defend the order of CIT A .  Pl guide.

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It is a well-settled position in law that books of accounts and computation of income are not conclusive for determining tax liability. Tax liability should be determined as per the provisions of the Income-tax Act, 1961. Therefore, the action of the Ld. CIT(A) is correct in allowing the appeal of the assessee. Furthermore, the revenue does not have the pecuniary jurisdiction to file an appeal before the Hon’ble ITAT on account of the low tax effect.

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