ITAT Bangalore Remands Case for Verification; Second Appeal Dismissed as Withdrawn

The present appeal has been filed by a company named M/s. Rajya Vokkaligara Sangha (Appellant) against the Addl. CIT (Exemptions), Bangalore (Respondent), in the Income Tax Appellate Tribunal (ITAT) “B” Bench: Bangalore, before Shri. Laxmi Prasad Sahu (Accountant Member) and Shri. Keshav Dubey (Judicial Member). The case is related to the assessment years 2011-12 and 2013-14.

Background

The assessee, i.e., M/s. Rajya Vokkaligara Sangha is a charitable trust registered under Section 12A and filed its income tax return (ITR) declaring nil income. The case was later selected for scrutiny to verify various income and expenditure details, and legal notices dated August 14, 2013, were sent to the assessee under section 143(2) of the Act. During the assessment, the assessing officer (AO) made several additions:

• Rs. 44.74 lakh: Difference in UGC grant opening balance
• Rs. 4.48 lakh: Opening balance in the V.S. Management account
• Rs. 51.49 lakh: Unpaid university fee not treated as application of income
• Rs. 1.57 crore: Land purchase not treated as application of income

Appeal before CIT(A)

• The assessee, dissatisfied with the additions made by the assessing officer (AO), files an appeal before CIT(A). However, CIT(A) confirmed the addition made by the AO.

Appeal before ITAT Bangalore

• The assessee, dissatisfied with the decision made by CIT(A), approached the Income Tax Appellate Tribunal (ITAT) in Bangalore. There, the assessee requested another opportunity to submit documents to prove the correctness of opening balances.

Tribunal’s Decision (AY 2011-12)

• The tribunal noted that even opening balances were added without full verification. It decided to send the matter back to the AO for fresh verification. The AO must give the assessee a fair chance to produce evidence. However, the Tribunal cautioned that no second leniency will be given if the assessee fails to cooperate again.

Result: The tribunal allowed the appeal for statistical purposes.

AY 2013-14 (ITA No. 815/Bang/2025)

This year, the assessing officer (AO) assessed the total income of the assessee at Rs. 15.64 crore and raised a tax demand of Rs. 8.79 crore on the assessee. The assessee, dissatisfied with this demand, approached the CIT(A). However, CIT(A) partially allowed the appeal. Thereafter, the assessee filed an appeal before the tribunal. There, the assessee stated that the AO, while giving effect to the CIT(A)’s order, granted full exemption under Section 11 (charitable exemption). Hence, the assessee requested to withdraw the appeal since no dispute remained. The Tribunal allowed withdrawal, with liberty to refile if the Revenue challenges the exemption later.

Result: Appeal dismissed as withdrawn.

Final Outcome

• ITA No. 814/Bang/2025 (AY 2011-12): Allowed for statistical purposes (sent back to AO).
• ITA No. 815/Bang/2025 (AY 2013-14): Dismissed as withdrawn.