INDIAN INSTITUTE OF SOCIAL WELFARE AND BUSINESS MANAGEMENT,KOLKATA vs. ADIT, CPC, BENGALURU

That the Ld. Addl./Joint Commissioner of Income-tax (Appeals), Gwalior was wrong in dismissing the Grounds of Appeal taken against the denial of Exemption as per the Third Proviso to Section 10(23C)(vi) for an aggregate sum of Rs.23,31,99,217. 2. That without prejudice to the contention raised in Ground No. (1) above, the Ld. Addl./Joint Commissioner of Income-tax (Appeals), Gwalior failed to ITA No(s). 2843/KOL/2025 Assessment Year(s) 2020-21 Indian Institute of Social Welfare appreciate that the appellant had furnished its Return of Income within the extended due date of 31/05/2021 and thus he erred in not considering that the appellant had duly complied with the requirement of furnishing the Return of Income in accordance with Section 139(4C)(e)

That without prejudice to the contentions raised in Grounds Nos. (1) and (2) above, the Ld. Addl./Joint Commissioner of Income-tax (Appeals), Gwalior failed to note that though the CPC stated in the Intimation that the appellant had been eligible for Exemption u/s 10(23C)(vi) and computed Applications to be allowed at Rs.64,03,416, yet in the Calculation Sheet the CPC denied the Exemption.

That the appellant craves leave to add, delete or modify any Ground or Grounds of Appeal before or at the time of the Hearing of the Appeal."

Brief facts of the case are that the assessee, an educational institution approved u/s 10(23C)(vi) of the Act, had filed its return of income for AY 2020-21 on 12.05.2021 declaring gross total income of ₹NIL. The return was processed u/s 143(1) of the Act on 24.12.2021, whereby the Centralized Processing Centre (CPC) determined the total income at ₹23,31,99,217/- by denying the claimed exemption u/s 10(23C) of the Act. The CPC disallowed the exemption, the application of income, and the permissible 15% accumulation on the ground that the assessee had failed to furnish the audit report in Form No. 10BB within the extended specified due date of 15.02.2021 as the same was filed belatedly on 12.05.2021 and computed the total income of the assessee at ₹23,31,99,217/-. Aggrieved with the intimation, the assessee filed an appeal before the Ld. Addl/JCIT(A). During the appellate proceedings, the Ld. Addl/JCIT(A) condoned the delay of 8 days in filing the appeal but on the merits of the case, the Ld. Addl/JCIT(A) observed that the assessee had failed to validly e-file the audit report in Form No. 10BB within the specified due date as required Indian Institute of Social Welfare u/s 12A(1)(b) of the Act, and the delay had not been condoned by the appropriate authority u/s 119(2) of the Act in accordance with CBDT Circular No. 16/2022, and as the appellate authority possessed no power to grant such condonation, the appeal was dismissed.

Aggrieved with the order of the Ld. Addl/JCIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the exemption u/s 10(23C)(vi) of the Act was not granted and the entire receipts have been added in the intimation u/s 143(1) of the Act and even the expenditure claimed was not allowed. Further, it was mentioned that the audit report in Form No. 10BB was uploaded on 12.05.2021 and was available at the time of processing the return of income. It was submitted that the due date of filing the return under sub-sections (4) and (5) of section 139 of the Act was extended to 31.05.2021 vide circular No. 8/2021 dated 30.04.2021 and the audit report on Form No. 10BB was uploaded on 12.05.2021, i.e. at the same time as that of the filing of the return. The assessee had been granted approval under sub- clause (vi) of clause (23C) of section 10 of the Act vide order no. 27 dated 18.07.2008 issued vide F.No. CC-III/10(23C)(vi)/2008-09/ from A.Y. 2008-09 and therefore, it was submitted that the exemption claimed could not have been denied as Form 10BB was available at the time of processing of the return of income.

The Ld. DR vehemently argued and relied upon the order of the Ld. CIT(A) and requested that the same may be confirmed.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). In case the exemption as claimed u/s 10(23C) of the Act were not to be allowed, the Bench were of the view that at least the expenditure ought to have been allowed and the net income should have been computed as per the commercial principle and the entire receipts could not be assessed as income. Further, under section 143(1) of the Act, there is no provision for disallowing the expenditure claimed as prima facie adjustment. Moreover, filing of Form No. 10BB has been held to be procedural and directive in nature and not mandatory and we rely upon the decision of the coordinate Bench in the case of M P Birla Foundation Educational Society v. Dy. Commissioner of Income Tax (Exemption), Kolkata in I.T.A. No.: 989/KOL/2025 order dated 10.09.2025 for A.Y. 2018-19 wherein it has been held as under:

Hence, respectfully following the decision in the case of M P Birla Foundation Educational Society (supra), and after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the intimation of the Ld. AO and remit the matter back to the Ld. AO for considering the claim of the assessee afresh as the audit report on Form No. 10BB, though not filed one month prior to the filing of the return of income, the due date for filing the return being extended, and the return being filed within the extended period, was available at the time of processing of the return of income and therefore, the claim of exemption under section 11 of the Act had to be allowed. In any case, the assessee had filed an application seeking condonation of ITA No(s). 2843/KOL/2025 Assessment Year(s) 2020-21 Indian Institute of Social Welfare delay in filing Form No. 10BB vide application dated 10.02.2025 before the Ld. CIT(E), Kolkata and the assessee shall file a copy of the order in this regard before the Ld. AO. In case for any reason, the exemption under section 11 cannot be allowed, the Ld. AO is directed to allow the expenditure as claimed by the assessee as the same could not have been disallowed in the intimation under section 143(1) was of the Act. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, all the grounds taken by the assessee in its appeal are allowed for statistical purposes.

Order pronounced in the open Court on 23rd June, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 23.06.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order