AABAHANA,CUTTACK vs. ITO EXEMPTION WARD, BERHAMPUR

It was submitted by the ld. AR that the original return of the assessee came to be filed on 27.09.2018 for the relevant assessment year. In the intimation u/s.143(1) of the Act, the exemption u/s.11 of the Act had been denied on the ground that there was delay in filing the form 10B. The assessee had filed rectification application u/s.154 of the Act and the CIT(E), Hyderabad had condoned the delay in filing of the Form 10B. The rectification application had been allowed and the assessee was granted the benefit of deduction u/s.11 of the Act. Subsequently, another 2 rectification order was passed by the AO on 09.08.2021, wherein the exemption had been again withdrawn on the ground that the CIT(E), Hyderabad had withdrawn the condonation of delay in e-filing of Form 10B and on account of the order of withdrawal of the condonation, the benefit of deduction u/s.11 of the Act had again been withdrawn. It was the submission that the fact that the delay was originally condoned by the ld. CIT(E) and subsequently withdrawn shows that the withdrawal itself is a debatable issue and the denial of the exemption u/s.11 of the Act is liable to be reversed.

In reply, ld. CIT-DR submitted that the denial of the condonation of delay in filing Form 10B by the ld. CIT(E), Hyderabad is not an issue which can be brought up as subject matter of an appeal before the Tribunal. It was the submission that as the appeal itself is against the withdrawal of the condonation of delay in filing of Form 10B, the appeal of the assessee is liable to be dismissed.

We have considered the rival submissions. A perusal of the facts of the present case clearly shows that the appeal has been filed by the assessee against the order passed u/s.154 of the Act by the AO on account of the withdrawal of the condonation of delay in e-filing of Form 10B. Thus, the appeal is against an order u/s.154 of the Act and admittedly the appeal is maintainable. Prima facie, a perusal of the order passed u/s.143(1) of the Act, where the exemption u/s.11 of the Act itself has been denied, shows that the same has been in violation of the proviso to Section 143(1) of the Act, insofar as the show cause notice as required 3 under the proviso to Section 143(1) of the Act, has not been issued to the assessee. Thus, on this ground itself, the intimation issued u/s.143(1) of the Act is liable to be quashed and we do so.

Further, the fact that the ld. CIT(E) has condoned the delay in filing the Form 10B originally on the petition filed by the assessee shows that the assessee did have a reasonable cause and the said reasonable cause was accepted by the ld. CIT(E), Hyderabad. On account of the condonation of delay, the assessee has been granted the benefit of exemption u/s.11 of the Act. Now, in the impugned order u/s.154 of the Act before the ld. CIT(A), the exemption u/s.11 of the Act has been withdrawn because the ld. CIT(E), Hyderabad has withdrawn the condonation of delay. Thus, it clearly shows that these are debatable issues, which admittedly is not something which can be done in an order passed u/s.154 of the Act. This being so, the impugned order u/s.154 of the Act being the order passed on 09.08.2021, which is the subject matter of the appeal before the ld. CIT(A) is held to be invalid. Consequently, the appeal of the assessee stands allowed.

In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 28/11/2023. (GIRISH AGRAWAL) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 28/11/2023 Prakash Kumar Mishra, Sr.P.S.