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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar
Per Shri Rajpal Yadav, Vice-President (KZ):- The present two appeals are directed at the instance of assessee against the orders of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), & 191/KOL/2023 A.Ys. 2016-2017 & 2017-2018 Searsale Sri Ramkrishna Sharada Chetana Sangha Delhi both dated 06.01.2023 passed for A.Ys. 2016-17 and 2017-18.
The Registry has pointed out that appeals are time-barred by two days. After considering the explanation of the assessee, we condone the delay and proceed to decide the appeals on merit.
The grounds of appeals taken by the assessee in both the years are verbatim same. It has taken three grounds in each assessment year. In brief, its grievance in both the years is that the ld. CIT(Appeals) has erred in rejecting the contentions of the assessee for denying the benefit of section 12A of the Income Tax Act to the assessee.
4. The assesese has filed a statement of facts, which is a self- explanatory and, therefore, we deem it appropriate to take note of this statement of facts demonstrating the factual details of the dispute in both the years. It reads as under:- “Before the Income Tax Appellate Tribunal, Kolkata . In the matter of SEARSOLE SRI RAMKRISHNA SHARADA CHETANA SANGHA Village: Searsole Rajbari, Ranignj -713358 , WB : PAN : AAGTS9982H Asst Year: 2016-17 Appeal against order passed by C1T ( A ) NFAC, u/s 250 of the Act 61, dated 06/01/2023: Statement of Facts : 2 & 191/KOL/2023 A.Ys. 2016-2017 & 2017-2018 Searsale Sri Ramkrishna Sharada Chetana Sangha The appellant is a charitable and religious TRUST , registered u/s 12A of the Act 61. Return filed in ITR - 7 on 30/09/2016 u/s 139(1) on the basis of Form 10B manual audit report dated 30/08/2016. However, the said audit report in Form 10B , was uploaded by the CA , in online portal on 29"' April, 2019 (belatedly ) after being pointed out by the department. The CPC Bangalore processed the return u/s 143(1) by disallowing the claim of exemption u/s 12A, amounting to Rs. 5,98,120/-, due to delay in filing Form 10B report in on line portal. In first appeal, before the CIT(A), NFAC , ( against order of CPC, Bangalore ) the first appeal authority has passed the appeal order, dated 06/01/2023, ignoring the CBDT circular No. 2/2020, on the issue of condonation of delay in uploading Form 10B electronically in online portal. ~
CIRCULAR NO. 2/2020 IF. NO. 197/55/2018-ITA-l], DATED 3-1-2020: (b) In all other cases of belated applications in filing Form No. 10B for years prior to AY. 2018-19, The commissioner of Income-tax are authorized to admit and dispose off by 31-3-2020 such applications for condonation of delay u/s 119(2)(b) of the Act. The Commissioner will while entertaining such belated applications in filing Form No. 10B shall satisfy themselves that the assessee was prevented by reasonable cause from filing such application within the stipulated time. In the instant case , the audit report in Form No. 10B was electronically uploaded on 29/04/2019 ( i.e. before the deadline date of 31/03/2020 prescribed by CBDT circular stated above . The CIT(A), has passed the appellate order dated 06/01/2023 , ignoring the CBDT circular dated 03/01/2020, which is legally not permissible, because CBDT circular is binding on the department authorities. The CA of the appellant has already uploaded the Form 10B electronically on 29/04/2019 and the appellant has also filed application u/s 119(2)(b) of the Act 61, on 11/03/2020 (i.e. before the cut-off date of 31/03/2020 ). As such on facts of the case , the uploading of belated Form 10B , electronically , may please be CONDONED , and consequently , the claim of the appellant trust u/s 12A , may be allowed”. 3 & 191/KOL/2023 A.Ys. 2016-2017 & 2017-2018 Searsale Sri Ramkrishna Sharada Chetana Sangha 5. The ld. Counsel for the assessee while impugning the orders of ld. CIT(Appeals) in both the years took us through the CBDT Circular No. 2 of 2020 referred by him in the statement of facts. He submitted that originally assessee has filed its return of income and also filed Form No. 10B in physical form. The requirement was to file such form on the Portal i.e. on line. The assessee has submitted this form on line also with a prayer for condonation of delay. The assessee has moved an application under section 119(2)(b) of the Income Tax Act as provided in the Circular by the CBDT. He drew our attention towards his statement of facts and submitted that sub-clause (ii) of clause (4) of the Circular has been brought to the notice of the CIT(A) by the assessee but inspite of that ld. 1st Appellate Authority failed to take cognizance of this fact.
On the other hand, ld. D.R. was unable to controvert the factual submissions made by the assessee.
We have duly considered the rival contentions and gone through the record carefully. The CBDT Circular No. 2 of 2020 contemplates that if Form No. 10B for assessment years prior to A.Y. 2018-19 was submitted belatedly in the Web Portal, then the ld. Commissioner of Income Tax are authorized to admit and dispose off all such applications for condonation of delay under section 119(2)(b) of the Income Tax Act by 31st March, 2020. The assessee has moved its application on 11.03.2020 so it was well & 191/KOL/2023 A.Ys. 2016-2017 & 2017-2018 Searsale Sri Ramkrishna Sharada Chetana Sangha within the time, i.e. before 31.03.2020 and it should have been decided by the ld. CIT(Exemption). Without adjudication of such application, the ld. Assessing Officer has made adjustment in intimation under section 143(1). We find that Circular has come after the return was processed under section 143(1). Therefore, the cognizance of the prayer of assessee and the Circular ought to have been entertained by the ld. CIT(A) because during that period, Circular had already come. It is pertinent to note that the order under section 143(1) was passed on 03.01.2018. The CBDT Circular came in 2020 giving benefit for all assessment years prior to A.Y. 2018-19 to file an application under section 119(2)(b) for condonation of delay in filing Form No.10B of the Income Tax Act. The cognizance of this Circular ought to have been taken by the ld. CIT(A) before deciding the appeal of the assessee. The ld. 1st Appellate Authority failed to take note of this aspect, therefore, committed an error in dismissing the appeals of the assessee.
In view of the above facts and circumstances, we set aside the impugned orders of ld. CIT(A) as well as of the ld. Assessing Officer and direct the ld. Assessing Officer to re-determine the taxable income of the assessee after collecting the details from the ld. CIT(Exemption) regarding adjudication of the assessee’s application moved under section 119(2)(b) of the Income Tax Act. The ld. Assessing Officer is further directed to decide admissibility of exemption available under section 12A. Such & 191/KOL/2023 A.Ys. 2016-2017 & 2017-2018 Searsale Sri Ramkrishna Sharada Chetana Sangha adjudication is to be made only after ascertaining the status of the applications of the assessee moved under section 119(2).
In view of the above, the appeals of the assessee are treated as allowed for statistical purposes. Order pronounced in the open Court on April 25, 2023.