ITAT Mumbai: Revenue Appeal Dismissed in Nawazbhai Ratan Tata Trust Case

The Revenue filed an appeal against the order of NFAC, Delhi, dated 07.03.2025, concerning AY 2016-17 in the case of Nawazbhai Ratan Tata Trust. The Assessing Officer had made additions on account of dividend income and denied deductions claimed u/s 80G and 80GGA, contending that such claims were not made in the original return of income. The AO further restricted deduction u/s 80G by applying the 10% of gross total income cap under Section 80G(4).

Before the CIT(A), the assessee explained that due to technical limitations in ITR-V, deduction u/s 80GGA could not be separately reflected, though claimed in computation with proper proof. The assessee also argued that once it had surrendered registration u/s 12A, benefits under Section 11 were no longer applicable, and dividend income could not be taxed by applying Section 11(7).

CIT(A) Held: The CIT(A) accepted the assessee’s submissions and deleted the additions, allowing both deductions subject to conditions.

Main Issues Raised: Whether CIT(A) was correct in deleting the addition on account of dividend income despite the assessee’s registration u/s 12A being in force during the year, whether deduction u/s 80GGA can be allowed though not separately claimed in return, but only in computation and whether deduction u/s 80G could exceed 10% limit prescribed u/s 80G(4).

ITAT Held: The Tribunal dismissed Revenue’s appeal in full. On dividend income, it relied on the coordinate bench decision in Jamsetji Tata Trust and Navajbai Ratan Tata Trust v. PCIT, holding that once the assessee had acquiesced to cancellation of 12A registration on 20.03.2015, the cancellation must be effective from that date. Hence, additions by AO were not sustainable.

On deduction claims, the ITAT upheld CIT(A)’s view that the absence of a specific column in ITR-V for 80GGA was a technical reason; the assessee had substantively satisfied conditions and furnished proof. Relying on RD Tata Trust decision, the Tribunal directed allowance of deduction subject to AO’s verification. It further held that donations to specified institutions under 80G(3) are not restricted by 10% cap in Section 80G(4).

Therefore, the Tribunal confirmed CIT(A)’s order and dismissed the Revenue’s appeal.

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