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Income Tax Appellate Tribunal, “RANCHI BENCH, RANCHI
Before: Shri Sanjay Garg & Shri Rajesh Kumar
IN THE INCOME TAX APPELLATE TRIBUNAL “RANCHI BENCH, RANCHI VIRTUAL HEARING AT KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Rajesh Kumar, Accountant Member Assessment Year: 2016-17 S S Charitable Trust..….…..…………..…...…......................……...…..….. Appellant S S Vidya Vihar School, New Kumar Para, Near Dudhani Rasikpur, Asharam Road, Jharkhand-814110. [PAN: AAFTS1387R] vs. ITO, Exemption Ward, Ranchi…………………….……….…………….. Respondent Appearances by: Shri Devesh Poddar, Adv., appeared on behalf of the appellant. Shri Pranob Kumar Koley, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : March 02, 2023 Date of pronouncing the order : April 28, 2023 ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee-trust against the order dated 30.03.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
The assessee in this appeal has taken the following grounds of appeal:
“1. The learned CIT(A) was not justified in holding that the appellant failed to file the requisite Form 10 before the AO and the AO is correct in making addition of Rs 16,19,953/- on account of shortfall in accumulation of funds. 2. The learned CIT(A) was not justified in rejecting the claim of the appellant wherein the appellant had filed belated Form 10 and claimed 1
Assessment Year: 2016-17 S S Charitable Trust condonation of delay u/s 119(2)(b) of the Act in the light of the CBDT's circular No. 7/2018 dated 20th December 2020.
Ld. CIT(A) was not justified in disallowing the accumulation of Rs.20,00,000/- u/s 11(2) of the Income Tax Act, 1961.
4. For that the appellant is an educational institution having no profit making motive and no application of profit for any individual. The accumulated surplus fund was spent for the motive of development of the education. This fact is not in dispute. As such accumulation of fund of the appellant should have been treated as exempt accepting the Form 10, 5. On the facts and the circumstances of the case Ld. CIT(A) was not justified in sustaining the interest levied u/s 234 of the Income Tax Act by the ld Assessing Officer.
6. Any other grounds of appeal
, if any, will be urged at the time of hearing.”
3. The brief facts of the case are that the assessee is a trust registered u/s 11 and 12 of the Act as a charitable institution. The assessee-trust engaged in running of an educational institution. Since the assessee has failed to furnish the Form No.10 in time, therefore, the Assessing Officer denied the benefit of accumulation of fund as provided u/s 11(2) of the Act and made the impugned addition.
The ld. CIT(A) confirmed the addition so made by the Assessing Officer.
Before us, the ld. Counsel for the assessee has submitted that the assessment year 2016-17 was the first year for e-filing of Form No.10 and that even the CBDT has taken note of the above fact that due to certain circumstances, some of the assessees could not file Form 10 in time and hence the CBDT directed Commissioners to condone the delay in filing Form 10 in cases in which assessees were prevented by reasonable cause of filing the Form 10 in time. The ld.
Assessment Year: 2016-17 S S Charitable Trust Counsel for the assessee has further submitted that Form 10 was duly filed before the Assessing Officer and was very much available to the Assessing Officer at the time of assessment proceedings. The ld. Counsel has further submitted that even otherwise, the purchase of assets by the assessee has not been claimed as application of income, whereupon, the assessee was entitled to the depreciation also. The ld. Counsel has further submitted that the delay in filing Form 10 was not intentional. That otherwise if the assets are considered as application of income, there would not be any requirement of filing of Form 10. The ld. Counsel, therefore, has submitted that the assessment year 2016-17 being the first year and since the Form 10 was filed before the Assessing Officer though belatedly because of the aforesaid reasons, therefore, the lower authorities were not justified in making the impugned additions.
The ld. DR, on the other hand, has relied upon the findings of the lower authorities.
We have considered the rival contentions. Since the assessment year 2016-17 was the first year for which Form 10 was to be e-filed and since the assessee-trust was having reasonable belief that the assessee-trust has applied 85% of its income for charitable purposes and, therefore, the assessee-trust was not required to file Form 10 for shortfall in application of income and claiming accumulation thereof, and since the assessee-trust has filed the Form 10 during the assessment proceedings, in our view, the Assessing Officer should consider the said Form 10 and grant relief to the assessee as per the relevant provisions, if the assessee is otherwise so found eligible. With the above observations, the impugned order of the CIT(A) is set aside
Assessment Year: 2016-17 S S Charitable Trust and the Assessing Officer is directed to grant relief to the assessee as admissible under the provisions of section 11 and 12 of the Act.
In the result, the appeal of the assessee-trust stands allowed.