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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: HON’BLE SHRI V. DURGA RAO, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकर अपीलीय अिधकरण “ए” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI माननीय �ी वी. दुगा� राव, �ाियक सद! एवं माननीय �ी मनोज कुमार अ%वाल ,लेखा सद! के सम(। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.903/Chny/2023 (िनधा�रण वष� / Assessment Year: 2016-17) Sri Vetri Vinayagar Educational Trust ITO बनाम/ Vs. No.4/984, Dawood Mill, (Exemptions Ward) Vadaseripatti Road, Pudukottai-622 002. Trichy. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAITS-8465-P (अपीलाथ�/Appellant) : (!"थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri I. Dinesh (Advocate)- Ld.AR !"थ�कीओरसे/Respondent by : Shri AR.V.Sreenivasan (Addl.CIT)-Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 07-12-2023 घोषणाकीतारीख /Date of Pronouncement : 13-12-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30.05.2023 in the matter of a rectification intimation issued by CPC Bangalore u/s 154 on 07.06.2019. The grounds taken by the assessee are as under: 1. The order of CIT(A) upholding the order u/s.154 denying exemption u/s.11 is bad in law and springs from mis-appreciation of facts of the case.
ITA No.903/Chny/2023 2. The CIT(A) having taken note of the fact that the Audit Report was obtained prior to filing of Return of Income and subsequently uploaded within the time limit stipulated u/s.139, erred in upholding the order u/s.154. 3. The CIT(A) having taken note of the fact that the CBDT itself vide its circular No.10/2019 clarified on condonation of delay in filing Form 10B for A.Ys.2016-17 & 2017-18, ought to have allowed the claim of exemption u/s.11. 4. The CIT(A) having taken note of the instruction of CBDT, failed to adjudicate the same. 5. The CIT(A) ought to have seen that the action of AO u/s.154 is against the CBDT instruction which is clearly a mistake apparent from the record which is rectifiable u/s.154 and ought to have allowed the rectification filed by the Appellant. 6. The CIT(A) failed to consider catena of decisions of this Hon'ble Tribunal which has condoned the delay in filing Form 10B based on the circular of CBDT.
The Registry has noted delay of 20 days in the appeal, the condonation of which has been sought by Ld. AR. Considering the length of delay, the delay is condoned and we proceed for adjudication of appeal on merits. 3. The Ld.AR advanced arguments supporting the case of the assessee and filed written submissions. The Ld. Sr. DR supported the impugned order. Having heard rival submissions, our adjudication would be as under. 4. The material facts are that the assessee trust filed its return of income on 30.11.2016 which was processed by CPC u/s 143(1) on 02.01.2018 denying exemption claimed by the assessee u/s 11 of the Act apparently due to the fact that the Audit Report in Form No.10B was not filed by the assessee along with return of income. Consequently, gross receipts as declared by the assessee were treated as its taxable income. The assessee filed rectification u/s 154 which did not yield any results. The assessee challenged rectification intimation before first appellate authority and submitted that exemption u/s 11 could not be denied even if the Audit Report was filed beyond due date as per CBDT Circular No.10/2019 dated 22.05.2019. The assessee drew attention to
3 ITA No.903/Chny/2023 the fact that the Audit Report was filed on 01.03.2017 which was much before the intimation issued by CPC on 02.01.2018. However, Ld. CIT(A), citing many case laws, held that power u/s 154 could be invoked only to correct an error and not to disturb a concluded finding. A mistake must exist and the same must be apparent from the record. Aggrieved, the assessee is in further appeal before us. 5. The undisputed fact that emerges is that the assessee has filed Audit Report much before the processing of return of income by CPC u/s 143(1). The Audit Report was very much available at the time of processing of return of income. The CPC have not taken the same into account while processing return of income u/s 143(1) as well as while dealing with 154 rectification application filed by the assessee. The Ld. CIT(A) merely upheld the rectification intimation on the ground the rectification application filed by the assessee would not fall within the ambit of Sec.154 of the Act overlooking the fact that the grievance of the assessee was not even looked into by CPC in the rectification application. Apparently, the applicable exemption has been denied due to the fact that the assessee did not furnish details of audit in the return of income and Form No.10B was uploaded after filing of return of income. The facts of the present case are covered by the decision of Ahmadabad Tribunal in the case of Shree Charitable Trusts vs. ITO (ITA No.172/Ahd/2022 dated 05.07.2023). The co-ordinate bench, considering the decision of Hon’ble High Court of Gujarat in the case of Indian Panel Board Manufacturer vs. DCIT (ITA No.655 of 2022 dated 21.03.2022), held that filing of Form No.10B would be directory in nature, as such the Assessing Officer are not powerless to allow an
4 ITA No.903/Chny/2023 assessee to file Audit Report, it not filed along with return, at any time before completion of assessment. Similar is the decision of Jaipur Tribunal in the case of DCIT vs. State Institute of Health & Family Welfare (153 Taxmann.com 740). The ratio of case law of Hon’ble High Court of Madras in the case of Chandraprabhuji Maharaj Jain vs DCIT (110 Taxmann.com 11) also supports the above conclusion. In this decision, Hon’ble Court has held that filing of Form No.10 for accumulation of income u/s 11(2) which was filed beyond due date could not disentitle the trust from exemption claimed u/s 11. The Hon’ble Court directed Ld. AO to examine the admissibility of benefit rather than to foreclose Assessee on technicalities. This principle was followed by the Hon'ble Jurisdictional HC in CIT Vs Spic Educational Foundation (TCA No.1593 of 2008 dated 12.12.2018). Respectfully following the same, we direct jurisdictional AO to verify the Form 10B filed by the assessee and allow the claim of exemption uls.11 of the Act. 6. The appeal stand allowed for statistical purposes. Order pronounced on 13th December,2023 Sd/- Sd/- (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) �ाियक सद!/JUDICIAL MEMBER लेखासद! / ACCOUNTANT MEMBER चे5ई Chennai; िदनांक Dated :13-12-2023 DS आदेशकीTितिलिपअ%ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. !"थ�/Respondent 3. आयकरआयु>/CIT 4. िवभागीय!ितिनिध/DR 5. गाडCफाईल/GF