Nirvindhya Shiksha Avam Sanskriti Prachar Samiti, Rajgarh vs. Income-tax Officer, Rajgarh Biaora

Parties Involved

Facts Summary

The assessee, a charitable society registered under sections 12A/12AA of the Income-tax Act, 1961, filed a return for the Assessment Year 2017-18 declaring a total income of Rs. Nil after claiming exemption under sections 11/12 of the Act. The return was taken up for scrutiny-assessment by the Assessing Officer (AO) who observed that the assessee claimed 'depreciation' of Rs. 52,49,523/- as revenue expenditure while also claiming the cost of assets as 'application of income' under sections 11/12. The AO disallowed the depreciation claim and imposed a penalty of Rs. 7,20,926/- under section 270A for under-reporting of income. The assessee appealed against the penalty order, arguing that the depreciation claim was valid and that the penalty should not have been imposed since the total income remained at Rs. Nil.…

Legal Issues

• 1. Whether the assessee's claim of depreciation as revenue expenditure is valid when the cost of assets has also been claimed as 'application of income'.
• 2. Whether the penalty imposed under section 270A is valid when the total income determined by both the assessee and AO is Rs. Nil.
• 3. Whether the assessee can rely on decisions favoring depreciation claims made before the amendment to section 11(6).

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• AS Trading Company Vs Income Tax Officer

• Vivekananda Bayam Samity Vs. ITO, Ward-42(1), Murshidabad

  Kolkata Bench benchAY 2022-23Allowed

• ITA No. 4349/DEL/2025; Assessment Year: 2020-21

• M/s CLC Tanners Association Vs ITO Ward-2(2), Kolkata

  Kolkata benchAY 2018-2019Allowed

• Sardari Lal Aggarwal vs. ITO Ward

  Amritsar bench

• Mr. Nateshan Sampath vs. DCIT

  C’’ Bench: Bangalore benchAY 2018-19Allowed