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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI ANIL CHATURVEDI
Date of Hearing : 12.04.2022 Date of Pronouncement : 27.04.2022 ORDER
This appeal filed by the assessee has been directed against the order of the National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No.ITBA/NFAC/S/ 250/2021-22/1037811233(1) dated 15.12.2021 relating to the A.Y. 2018-19.
2 ITA.No.239/Del./2022 Help, Delhi.
The facts as culled-out from the material on record are that assessee is a Trust which filed its original return of income for the A.Y. 2018-19 on 28.09.2018. Thereafter, it filed revised return of income on 09.03.2019 declaring total income at Rs.NIL. In the intimation issued under section 143(1) of the I.T. Act, 1961 vide order dated 09.02.2020 the A.O. determined the total income of Assessee Trust at Rs.10,36,657/-, inter alia, by denying the claim of exemption under section 11(2) of the I.T. Act, 1961. Aggrieved by the order of A.O, assessee filed appeal before the Ld. CIT(A). Thereafter, the appeal was migrated to National Faceless Appeal Centre [“NFAC”] in terms of Notification No.76/2020 dated 25.09.2020 issued by the CBDT. Thereafter, vide order dated 15.12.2021 in DIN & Order No. ITBA/NFAC/S/ 250/2021-22/1037811233(1) the appeal of the assessee was dismissed by the NFAC, Delhi.
Aggrieved by the order of NFAC, Delhi, the assessee is now in appeal before the Tribunal and has raised the following grounds :
3 ITA.No.239/Del./2022 Help, Delhi. 1. “The learned CIT(A) NFAC erred in law and on facts in confirming rejection of the benefit of accumulation of Rs.10,36,657/- u/s 11(2) of the Act ignoring that such actions are not permissible u/s 143(1) of the Act and also without allowing an opportunity of personal hearing to the appellant as per the principles of natural justice in built in appellate proceedings. Thus, the addition so made should be deleted.
2. The Ld. CIT(A) NFAC erred in law and on facts in confirming the rejection of benefit of accumulation of Rs.10,36,657/- u/s 11(2) of the Act ignoring that the requisite Form 10 for the purpose could not be filed by the assessee within due date due to reasons beyond control of the assessee but the same was filed on 09/03/2019 by the assessee with reasons for the delay, very much before the revised return of income accompanied the said form was electronically processed u/s 143(1) of the Act on 09/02/2020 for this assessment year by the CPC income-tax department. Thus, because of the above facts, the benefit of 4 ITA.No.239/Del./2022 Help, Delhi. accumulation u/s 11(2) should be allowed to the assessee. Necessary directions in this regard should be issued.”
Before me, at the outset, the Learned A.R. of the Assessee submitted that though the assessee has raised two grounds, but, the sole controversy is with respect to denial of rejection of accumulation under section 11(2) of the I.T. Act, 1961.
4.1. Before me the Learned A.R. of the Assessee submitted that assessee was required to file Form-10 as required under Rule-17 of I.T. Rules for claiming exemption under section 11(2) by 30.09.2018. However, it was filed on 09.03.2019 along with revised return of income. The CPC vide intimation under section 143(1) of the I.T. Act, 1961 disallowed the claim of exemption under section 11(2) of the I.T. Act, 1961 for the reason that assessee did not fulfil the mandated pre-condition of filing Form No.10 within the prescribed period. When the matter was carried before the Appellate Authority, the order of A.O. was upheld by the Appellate Authority.
5 ITA.No.239/Del./2022 Help, Delhi. 4.2. Before me, Learned A.R. of the Assessee reiterated the submissions made before the authorities below and further submitted that though the assessee was required to file Form-10 before 30.09.2018, but, the same was filed before the completion of assessment for claiming benefit of accumulation of Rs.10,36,657/-. He submitted that the non-compliance of the procedural aspect in filing Form No.10 within the prescribed time limit did not result in any benefit to the assessee or loss to the Revenue on account of such non-compliance and merely on account of non-compliance of procedural aspect the benefit should not be denied to the assessee and for this proposition he placed reliance upon the decision of ITAT, Chandigarh Tribunal in the case of Institution of Civil Engineers Society vs., ACIT (Exemptions) [2021] 91 ITR (T) 56 (Chandigarh-Trib.). He also placed on record copy of the aforesaid decision. He also submitted that CBDT vide Circular No.6/20 dated 19.02.2020 has held that the delayed application filed should be admitted and the delay be condoned. He,
6 ITA.No.239/Del./2022 Help, Delhi. therefore, submitted that the assessee be allowed the benefit of accumulation under section 11(2) of the I.T. Act, 1961.
The Ld. D.R. on the other hand, supported the orders of the lower authorities.
I have heard the rival submissions of both the parties and perused the material on record. The issue in the present appeal is with respect to denial of claim of accumulation of Rs.10,36,657/- under section 11(2) of the I.T. Act, 1961. It is an undisputed fact that though Form-10 was required to be filed before 30.09.2018, but, it has been filed before the completion of the assessment. I find that the Hon’ble Chandigarh Bench of Tribunal in the case of Institution of Civil Engineers Society vs., ACIT (Exemptions) (supra), after considering the CBDT Circular No.6/20dated 19.02.2020 and the decision of Hon’ble Apex Court in the case of Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) and various other decisions cited in the order has held that when assessee had filed Form-10 during the course of assessment proceedings and before the completion of the assessment, the same should be 7 ITA.No.239/Del./2022 Help, Delhi. considered by the A.O. while considering the claim of benefit under section 11(2) of the I.T. Act, 1961. Before me, the Revenue has not placed on record any contrary binding decision in its support nor has placed on record any material to demonstrate that the aforesaid decision of ITAT, Chandigarh Tribunal has been stayed, overruled or set aside by any Higher Judicial Forum. I, therefore, relying on the aforesaid decision of the ITAT, Chandigarh Tribunal in the case of Institution of Civil Engineers Society vs., ACIT (Exemptions) (supra), allow the grounds raised by the assessee and direct the A.O. to allow the benefit of accumulation claimed under section 11(2) of the I.T. Act, 1961. Thus, the grounds of the assessee are allowed.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court 27.04.2022.