KHATOON MINORITY WOMEN SOC,NASHIK vs. DEPUTY COMMISSIONER OF INCOME TAX, EXEMPTION CIRCLE, AURANGABAD, AURANGABAD

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ITA 723/PUN/2022Status: DisposedITAT Pune02 June 2023AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not issued a prior intimation of the proposed adjustment under the proviso to Section 143(1), which is a violation of natural justice and mandatory procedure. Therefore, the intimation under Section 143(1) was set aside.

What were the facts?

The assessee, a charitable trust, filed its return claiming exemption under Section 11. The CPC processed the return under Section 143(1) denying exemption, stating the trust was not registered under Section 12A and had not filed the audit report in Form 10B. The assessee argued that it was registered under Section 12A and had filed Form 10B with a delay condonation petition.

What were the issues?

Whether the denial of exemption under Section 143(1) without issuing a prior intimation of proposed adjustment violated the principles of natural justice and mandatory procedural requirements.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 11,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI

For Appellant: Shri Sanket M. Joshi
For Respondent: Shri Keyur Patel
Hearing: 30.05.2023Pronounced: 02.06.2023

ORDER

PER INTURI RAMA RAO, AM:

1.

This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 13.07.2022 for the assessment year 2019-20.

2.

Briefly, the facts of the case are that the appellant is a public charitable trust registered under the Bombay Public Trust Act, 1950.

The appellant trust was also registered under the provisions of section 12A of the Income Tax Act, 1961 (‘the Act’) on 03.05.2006. The appellant trust is engaged in rendering services in the field of education. The Return of Income for the assessment year 2019-20 was filed on 30.09.2019 declaring Rs.Nil income after claiming exemption u/s 11 of the Act. The said return of income was processed u/s 143(1) of the Act vide intimation dated 26.03.2021 in respect of entire gross receipts of income of Rs.9,61,94,922/- denied the exemption u/s 11 on the ground that as per the details furnished in the return of income, the appellant trust was not registered u/s 12A of the Act nor had the assessee filed the prescribed audit report in Form No.10B along with the return of income.

3.

Being aggrieved by the intimation, a rectification petition was filed by the appellant trust u/s 143(1) pointing out that the appellant trust is registered u/s 12A of the Act. The appellant trust also brought to the notice of the CPC that the Form No.10B was filed and petition to condone the delay in filing of Form No.10B is also filed before the Pr. CIT, Exemption, Pune.

4.

Being aggrieved by the intimation, an appeal was filed before the NFAC, who vide impugned order confirmed the action of the CPC.

5.

Being aggrieved, the appellant is in appeal before us in the present appeal. 6. Before us a preliminarily issue was raised that the appellant trust was not issued intimation of the proposed adjustment as provided under proviso to section 143(1) of the Act. This fact was not disputed by the ld. CIT-DR stating that the intimation of the proposed adjustment could not be issued due to some technical issue. Thus, it is an admitted position that no prior intimation has been issued before making the prima-facie adjustment. There is a blatant violation of principles of natural justice as well as the mandatory procedure prescribed u/s 143(1) of the Act. In view of the above, we hereby set-aside the intimation u/s 143(1) and the matter is remanded to the CPC, who shall issue a fresh intimation about proposed adjustment and thereafter process the return of income u/s 143(1) of the Act in accordance with law.

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