SANKARA JYOTI EYE INSTITUTE,KOLKATA vs. ITO, WARD 1(3), EXEMP., KOLKATA, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI GOPALAN GURUSAMY, ACCOUNTANT MEMBER ITA No.2315/KOL/2026 Assessment Year: 2017-18 Sankara Jyoti Eye Institute Vs. ITO, Ward-1(3), 5/1 Madhusudan Mukherjee Exemption, Kolkata Road, Khardaah, Barrackpore Kolkata-700116 [PAN: AABTS6292H] APPELLANT RESPONDENT Appellant by : Shri Giridhar Dhelia, AR Respondent by : Shri Manab Adak, Sr. DR Date of hearing : 31.08.2026 Date of Pronouncement : 09.09.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER:

This Appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) (‘Ld. CIT(A)’ for short) dated 26.11.2025, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) pertaining to Assessment Year 2017-18.

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 3. The Ld. AR reiterating the averments made in the Application, sought for condoning the delay in filing the captioned Appeal.

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 Form No.10 for the year under consideration and in the return filed by the Assessee, Assessee had also shown sum of Rs.1,53,19,092/- as voluntarily contribution other than corpus and Rs.1,12,19,875/- as amount deemed to have applied to charitable purposes as per clause (2) of Explanation to section 11(1) of the Act. It is pertinent to note that the Ld.CIT(Exemption) rejected the condonation for petition on 19.12.2019. Therefore, the Assessing Officer made addition of Rs.1,53,19,092/- vide Assessment Order dated 24.12.2019 passed u/s 143(3) of the Act. Aggrieved by the Assessment Order dated 24.12.2019, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 26.11.2025, dismissed the Appeal filed by the Assessee. As against the Order of the Ld. CIT(A) dated 26.11.2025, Assessee preferred the captioned Appeal.

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 that the Form No.10 has been filed well within the date of filing of the return. Therefore, by relying on the plethora of decisions, sought for allowing the Appeal.

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 10. The Co-ordinate Bench of the Tribunal at Chandigarh Bench in the case of Institution of Civil Engineers Society Vs. ACIT(Exemptions) reported in [2021] 130 taxmann.com 506 (Chandigarh- Trib.), by following the Judgment of Hon’ble Apex Court and High Court and the CBDT Circular, held that since the Assessee therein has furnished the Form No.10 during the course of assessment proceedings prior to completion of the assessment, the Assessing Officer could have considered the claim of the Assessee for benefit of exemption u/s 11(2) of the Act and directed the Assessing Officer accordingly. The relevant portion of the Order of the Co-ordinate Bench of the Tribunal is reproduced as under:-

“17. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that as per section 11(2) of the Act read with Rule 17 of the Income Tax Rules, as mandated with effect from A.Y. 2016-17 the assessee was required to e-file Form No. 10 by due date mentioned under section 139 of the Act. However, in the present case the assessee filed Form No. 10 on 17/11/2018 i.e; during the course of assessment proceedings. The A.O. denied the claim of the assessee since the Form No. 10 was not furnished before filing the return of income under section 139 of the Act. 17.1 In this regard the CBDT has issued Circular No. 6/2020 dt. 19/02/2020 which read as under:

Circular No.6/2020 F.NO.197/55/2018-ITA-I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ***** New Delhi, the 19 February, 2020 Page | 5

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Return of Income for A.Y 2016-17,2017-18, and 2018- 19 and Form No.9A and Form No. 10.- Reg. Representations have been received seeking condonation of delay in filing Return of Income by the Charitable institutions for the Assessment Year 2016- 17 onwards on the grounds of hardship. The Board has issued Circulars authorizing the Commissioners of Income Tax to admit belated applications of Form 9A and Form 10 and to decide on merit the condonation of delay U/S 11 9(2)(b) of the Income-tax Act, 1961 (Act). However, in those cases where the Income Tax Returns have also been filed beyond the due date prescribed under section 139(1) of the Act, the condonation of delay in filing of Form 9A & Form 10 by the Commissioners is not of any help to the assessee, as section 13(9) of the Act, inserted w.e.f. 01.04.20 16, stipulates twin conditions of filing of Form 9A/Form 10 and also of filing Return of Income before the due date. 2. Accordingly, in continuation of earlier Circulars issued in this regard, with the view to prevent hardship to the assessee and in exercise of powers conferred under section I 19(2)(b) of the Act, the CBDT has decided that where the application for condonation of delay in filing Form 9A and Form 10 has been filed, and the Return of Income has been filed on or before 31 S1 March of the respective assessment years i.e. Assessment Years 20 16- 17, 20 17- 18 and 2018- 19, the Commissioners of Income-tax (Exemptions) arc authorised u/s 119(2)(b) of the Act, to admit such belated applications for condonation of delay in filing Return of Income and decide on merit. 3. For all other application for condonation of delay not mentioned above, the power of condonation of delay u/s I 19(2)(b) of the Act wiII continue with the respective authorities as per the extant Rules and Practice. 17.2 Earlier also a Circular No. 7/2018 dt. 20/12/2018 was issued by the CBDT which read as under: “SECTION 119 OF THE INCOME-TAX ACT, 1961 - CONDONATION OF DELAY UNDER SECTION 119(2)(b) OF THE INCOME-TAX ACT, 1961 IN FILING OF FORM NO. 10 AND FORM NO. 9A FOR AY 2016-17 CIRCULAR NO. 7/2018 [F.NO.197/55/2018-ITA-I], DATED 20- 12-2018

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 Under the provisions of section 11 of the Income-tax Act, 1961 (hereafter 'Act') the primary condition for grant of exemption to trust or institution in respect of income derived from property held under such trust is that the income derived from property held under trust should be applied for the charitable purposes in India. Where such income cannot be applied during the previous year, it has to be accumulated and applied for such purposes in accordance with various conditions provided in the section. 2. The Finance Act, 2015 amended section 11 and section 13 of the Act with effect from 1-4-2016 (A.Y. 2016-17). Consequently, Income-tax Rules, 1962 (hereafter 'Rules') were also amended vide the Income-tax (1st Amendment) Rules, 2016. As per the amended provisions of the Act read with rule 17 of the Rules, while 15% of the income can be accumulated indefinitely by the trust or institution, 85% of income can only be accumulated for a period not exceeding 5 years subject to the conditions, inter alia, that such person submits the prescribed Form No. 10 electronically to the Assessing Officer within the due date specified under section 139(1) of the Act 3. Further, where the income from the property held under trust and applied to charitable or religious purposes falls short of 85% of the income derived during the previous year for the reason that the income has not been received during that year or any other reason, then on exercise of the option by submitting in Form No.9A electronically by the trust/institution on or before the due date of furnishing the return of income, such income shall be deemed to have been applied for charitable or religious purpose. 4. Representations have been received by the Board/ field authorities stating that the Form No. 9A and Form No. 10 could not be filed in the specified time for AY 2016-17, which was the first year of e-filing of these forms. It has been requested that the delay in filing of Form No. 9A and Form No.10 for AY 2016-17 may be condoned under section 119(2) (b) of the Act. 5. Accordingly, in supersession of earlier Circular/Instruction issued in this regard, with a view to expedite the disposal of applications filed by trusts for condoning the delay and in exercise of the powers conferred under section 119(2)(b ) of the Act, the Central Board of Direct Taxes hereby authorizes the Commissioners of Income-tax, to admit belated applications in Form No. 9A and Form No. 10 in respect of AY 2016-17 where such Form No. 9A and Form No. 10 are filed after the expiry of the time allowed under the relevant provisions of the Act 6. The Commissioners will, while entertaining such belated applications in Form No. 9A and Form No. l0, satisfy themselves Page | 7

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 that the assessee was prevented by reasonable cause from filing of applications in Form No. 9A and Form No. 10 within the stipulated time. Further, in respect of Form No. 10 the Commissioners shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in sub-section (5) of section 11 of the Act. 17.3 From the aforesaid Circular it would be clear that in the genuine case of belated application in Form No. 10, the delay may be condone. In the present case the assessee furnished the Form No. 10 before completion of the assessment. 17.4 On a similar issue the Hon'ble Apex Court in the case of CIT Vs. Nagpur Hotel Owners' Association (supra) held as under: "It is abundantly clear from the wordings of sub-section (2) of section 11 that it is mandatory for the person claiming the benefit of section 11 to intimate to the assessing authority the particulars required, under rule 17 in Form No. 10. If during the assessment proceedings the Assessing Officer does not have the necessary information, the question of excluding such income from assessment does not arise at all. As a matter of fact, the benefit of excluding this particular part of the income from the net of taxation arises from section 11 and is subject to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time it completes the assessment. In the absence of any such information, it will not be possible for the assessing authority to give the assessee the benefit of such exclusion and once the assessment is so completed, it would be futile to find fault with the assessing authority for having included such income in the assessable income of the assessee. Therefore, even assuming that there is no valid limitation prescribed under the Act and the Rules, even then it is reasonable to presume that the intimation required under section 11 has to be furnished before the assessing authority completes the concerned assessment because such requirement is mandatory and without the particulars of the income, the assessing authority cannot entertain the claim of the assessee under section 11. Therefore, compliance of the requirement of the Act will have to be any time before the assessment proceedings." 17.5 Similarly their Lordships of the Hon'ble Bombay High Court in the case of CIT Vs. Sakal Relief Fund (supra) observed in para 13 as under: "13. It is only with regard to the decision of the Apex Court in Nagpur Hotel Owners' Association {supra) that Mr. Tejveer Singh expressed reservation. According to him, the observations Page | 8

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 of the Apex Court that Form 10 has to be filed before completion of Assessment Proceedings were rendered in the context of fact that it was not filed during the Assessment Proceedings. Therefore, the fact situation being different, the observations therein cannot be applied to the present facts. In fact, we note that the Apex Court in the above case has observed that for the purposes of excluding an income of the trust from the net of taxation, the intimation in Form 10 has to be filed with the Assessing Officer before he completes the Assessment. In fact, it is the context of the above finding of the Apex Court, that it observed that Form 10 has to be filed before completion of Assessment Proceedings. In fact, the Delhi High Court in the case of Association of Corporation & Apex Societies of Handlooms {supra) has also relied upon and so understood the decisions of the Apex Court in Nagpur Hotel Owners' Association {supra). Therefore, we do not find any merit in the reservations expressed by Mr. Singh, learned Counsel for the Revenue on the applicability of the Supreme Court order in case of Nagpur Hotel Owners' Association {supra) to the present facts."

ITA No.2315/Kol/2026 Sankara Jyoti Eye Institute; A.Y: 2017-18 12. In the result, Appeal of the Assessee is allowed.

Order pronounced on 09.09.2026.

Sd/- Sd/- (GOPALAN GURUSAMY) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09.09.2026 DP, PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY//

DEPUTY REGISTRAR KOLKATA BENCHES, KOLKATA