The Tax Publishers

Income Tax--Charitable Trust

Whether Enhancement of the Income of the assessee by CPC justified?

Akhilesh Kumar Sah

In this short write-up, the learned author discusses a very interesting point as to whether on account of failure of assessee to calculate the total amount eligible for exemption under section 11 of the Income Tax Act, 1961 while filing the corresponding columns, particularly column 5(vi), in the return of income, same would, on such a mistake being corrected by CPC result into enhancement of assessee's income in terms of explanation 3 to section 11(1) of the Act as inserted by Finance Act, 2018 with effect from 1-4-2019. In the instant case of China Ponnu Amual Trust v. CIT the ITAT Chennai observed that the income accumulated or set apart for the charitable purposes, which is not in excess of 15% of income shall also not be included in its total income and held that merely because there was mistake in filing the corresponding columns in the return of income, the same would not result into enhancement of the assessee's income. He concludes to avoid litigation and unnecessary rising demands, practical approach giving a helping hand to assessees by CPC is the need of the hour in view of electronic filing and processing of returns.