SAI VILAYATRAI & SAI JIWATSINGH KAMBAR DARBAR SAHIB TRUST,MUMBAI vs. EXEMPTION WARD 2(3), MUMBAI, MUMBAI

The assessee has raised grounds challenging the action of the CPC and the Ld. CIT(A) in denying exemption claimed under sections 11(1)(a) and 11(2) of the Act. The assessee has also raised additional grounds

The Ld. Authorised Representative submitted that the digital signature appearing on the impugned intimation bears the date 06.02.2025. He further submitted that the intimation contains a Document Identification Number (DIN), though the DIN system was not in existence on 27.04.2017, the date mentioned in the intimation. It was therefore contended that the impugned intimation was actually issued on 06.02.2025 and merely bears an earlier date. Accordingly, it was argued that the intimation is barred by limitation and deserves to be quashed.

The Ld. Departmental Representative relied upon the orders of the lower authorities and submitted that the intimation was issued by CPC through an automated process and bears the date 27.04.2017.

We have considered the rival submissions and perused the material available on record. The additional grounds raise a pure legal issue and are therefore admitted for adjudication.

We do not find any merit in the additional grounds raised by the assessee. The entire argument of the assessee is founded upon the date appearing in the digital signature and the presence of DIN in the downloaded copy of the intimation. However, the impugned intimation itself clearly mentions the date of order as 27.04.2017. The intimation has been generated by the Centralized Processing Centre (CPC) through a system-driven process without any manual intervention. In such circumstances, the date of intimation mentioned in the intimation has to be accepted as the date on which the intimation was passed. In our considered view, the date appearing in the digital signature or the date on which the assessee could access or download the intimation cannot by itself lead to the conclusion that the intimation was passed on

Coming to the merits of the appeal, the brief facts are that the assessee is a religious-cum-charitable trust registered u/s 12A of the Act. The assessee filed its return of income declaring Nil income after claiming exemption under section 11 of the Act. While processing the return u/s 143(1), the CPC did not allow the claim of accumulation of 15% of income amounting to Rs.5,31,938/- under section 11(1)(a) and further accumulation of income amounting to Rs.6,73,370/- under section 11(2) of the Act. Consequently, the returned income was assessed at Rs.12,05,308/-.

Aggrieved by the adjustment made by CPC, the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the action of CPC. Aggrieved, the assessee is in appeal before us.

The assessee has submitted that the assessee is duly registered u/s 12A and is eligible for exemption under sections 11 and 12 of the Act. It was submitted that there was no justification for denying the statutory accumulation of 15% amounting to Rs.5,31,938/- under section 11(1)(a). It was further submitted that the assessee had filed Form No.10 on 20.05.2017 in support of accumulation claimed under section 11(2). It was submitted that A.Y. 2016-17 was the first year in which electronic filing of Form No.10 was introduced. The Form No.10 was available

The Ld. Departmental Representative relied upon the orders of the lower authorities.

We have considered the rival submissions and perused the material available on record. We find that the CPC while processing the return u/s 143(1) disallowed the claim of accumulation of 15% of income amounting to Rs.5,31,938/- under section 11(1)(a) and further disallowed the claim of accumulation of Rs.6,73,370/- under section 11(2) of the Act. The said action has been affirmed by the Ld. CIT(A).

In so far as the claim under section 11(1)(a) is concerned, we find that the assessee is a registered charitable trust and the accumulation of 15% of income is a statutory benefit available under the Act. Neither the CPC nor the Ld. CIT(A) has pointed out any defect in the claim warranting denial of such accumulation. In our considered view, there was no justification for disallowing the claim of Rs.5,31,938/- under section 11(1)(a).

As regards the claim under section 11(2), we find that the assessee had filed Form No.10 on 20.05.2017. It is true that the said form was not filled before filling the return of income, however, the same was available before the Ld. CIT(A) during the appellate proceedings. We also take note of the fact that A.Y. 2016-17 was the first year in which electronic filing of Form No.10 was introduced. Once the prescribed Form No.10 had been filed and was available before the appellate authority, substantial compliance with the requirements of section 11(2) stood established. The Ld. CIT(A), in our view, ought to have considered the

Considering the totality of facts and circumstances of the case, we hold that the CPC was not justified in disallowing the claim of accumulation of Rs.5,31,938/- under section 11(1)(a) and the claim of accumulation of Rs.6,73,370/- under section 11(2). Consequently, the order of the Ld. CIT(A) sustaining the said disallowances is set aside and the Assessing Officer/CPC is directed to allow the claims made by the assessee under sections 11(1)(a) and 11(2) of the Act.

In the result, the additional grounds raised by the assessee are dismissed and the grounds raised on merits are allowed. The appeal of the assessee is allowed.