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Facts
The assessee trust's appeal against the CIT(A)'s order confirming an addition of Rs. 27,00,004/- was filed with a significant delay. The delay was attributed to non-receipt of notices from the CIT(A) due to incorrect email communication and improper service of physical notices.
Held
The Tribunal condoned the delay in filing the appeal, finding that it was not intentional or deliberate. On merits, the Tribunal directed the Assessing Officer to verify the facts regarding accumulation of income and allow relief under Section 11.
Key Issues
Whether the delay in filing the appeal before the Tribunal can be condoned and whether the denial of exemption under Section 11 due to delayed filing of Form 10 is justified.
Sections Cited
11, 11(1), 11(2), 12A, 12B, 254(1), 35, 17
AI-generated summary — verify with the full judgment below
(AY2015-16) Shruparak Educational and Medical ITO (Exem.) Ward – 2(3) Trust, 702, Anne Ville, 30th Road, Room No. 617, Cumballa T.P.S. 3, Bandra (W), Hills, MTNL-TE Building, Vs. Mumbai – 400 050. Pedder Road, Dr Gopalrao Deshmukh Marg, PAN: AABTS 7822 F Mumbai – 400026. (Appellant) (Respondent) Assessee by : Shri Tanzil R. Padvekar, Advicate Revenue by : Shri Kiran Unavekar, Sr. DR Date of Hearing : 19.03.2025 Date of Pronouncement : 21.04.2025 Order Under section 254(1) of Income tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. CIT(A) dated 09.06.2023 for A.Y. 2015-16. The assessee has raised the following grounds of appeal:
“1. On the facts and in law, the CIT(A) erred in confirming the impugned assessment order dated 20.12.2017 passed by Ld. AO making impugned addition of Rs. 27,00,004/-.
On the facts and in law, the Ld. Assessing Officer [in short Ld. AO] erred in wrongly adding back the figure of Income of Rs. 27,00,004/- on account of denial of exemption under section 11(1) of the Act as it is unwarranted, unjustified and bad in law.
On the facts and in law, the Ld. AO has erred in wrongly mentioning the facts in the body of the order which are not applicable to the assessee. You are requested to kindly delete the entire additions and oblige.
Shruparak Educational and Medical Trust A.Y. 2015-16 4. On the facts and in law, the appellant prays that the addition/disallowance of Rs. 27,00,004/- as states in the order may be deleted.
On the facts and in law, the provision regarding furnishing of Form 10 with the return must to be treated as a procedural proviso and therefore substantial compliance must suffice. The benefit of exemption should not be denied merely on account of furnishing of form 10 at the time of assessment proceedings.
6. That on the facts and in law, all the relevant details relating to accumulation as per section 11(2) of the Act were made available before the Assessing Officer in form 10B filed before filing of return of income and therefore, mere filing of Form 10 at the time of filing of assessment proceedings should be treated as sufficient compliance.
7. On the facts and in law, the Ld. CIT(A) erred in dismissing appeal filed by the appellant for non-prosecution and on the assumption that the appellant did not receive any physical notices even when the appellant had opted for option for sending notices and communication through physical manner.
On the facts and in law, the Ld. CIT(A) erred by failing to send the notices on the email id provided under the caption for sending notices in Form No. 35 thereby making it impossible for the appellant respond to such notice.
The appellant craves, leave to add to alter, modify, revise, or delete any ground(s) in the interest of justice.”
2. Rival submissions of both the parties have been heard and record perused. The Learned Authorized Representative (ld. AR) of the assessee submits that there is delay of 550 days in filing appeal before Tribunal. The assessee has already filed an affidavit of Najeeb M. Chawre Managing Trustee of Shruparak Educational and Medical Trust. The ld. AR of the assessee submits that delay in filing appeal is neither intentional nor deliberate. The impugned order was passed by ld. CIT(A) on 09.06.2023. The order passed by ld. CIT(A) was neither received in physical form nor through e-mail. At the time Shruparak Educational and Medical Trust A.Y. 2015-16 of filing appeal, in Form 35, in against the column of service of notice communication via e-mail, the assessee mentioned/ opted “No”. Despite mentioning such fact in Form 35, no physical notice was served upon the assessee. The assessee provided e-mail zbzehs@yahoo.com, no notice was otherwise served through such e-mail rather notices were sent to different e- mail fakihco@gmail.com as has been seen on ITBA portal. The assessee was not aware about the progress of hearing before CIT(A). The assessee became aware about disposal of appeal only in the month of January, 2025 when they approached their present Advocate to know about the progress of their appeal. On checking of ITBA portal, it was revealed that their appeal has already been dismissed on 09.06.2023. The ld. AR of the assessee submits that delay in filing appeal is not intentional or deliberate. Copy of screen shot of ITBA portal showing about sending of notice at different e- mail that is at fakihco@gmail.com, is placed on record. The ld AR of the assessee submits that delay in filing appeal may be condoned.
3. On merit, the ld. AR of the assessee submits that assesse is a trust registered under section 12A/12B as well as with Charity Commissioner, Mumbai. The Assessing Officer while passing assessment order was not allowed application of income under section 11 on the ground that Form 10 was furnished on 07.12.2017 i.e. after filing return of income. The ld. CIT(A) in his order also confirmed the action of assessing officer that Form 10A was not filed in time which is mandatory for requirement of application of income under section 11. The ld. AR of the assessee submits that various High Shruparak Educational and Medical Trust A.Y. 2015-16 Courts have held that where the assessee trust furnished Form No. 10 after last date of hearing but before completion of assessment, the assessee is entitled to benefit of accumulation of income under section 11. Similar view was taken by Telangana High Court in Samaj Seva Nidhi vs ACIT (Inv.) (2015) 62 taxmann.com 317 (Andhra Pradesh and Telangana), Bangalore Bench in Ursuline Franchiscan Congregation Feneralate Somerpann Declaralakatte Manglore vs ITO(E) in and Hyderabad Bench in Society of Catechist Sisters of St. Ann vs ADIT(Exemption). The ld. AR of the assessee finally prays that the appeal of assessee may be allowed.
On the other hand, ld. Sr. (DR) for the Revenue on the plea of condonation of delay by assessee, submits that assessee has not explained the delay in a proper way. The assessee is relying on self-served story. On merit, the ld Se DR for the revenue submits that as per Rule 17 of Income Tax Rukes, the assessee is required to file Form 10 before filing return of income. As Form No. 10 was not filed as per Rule 17, therefore, the Assessing Officer rightly not allowed application of income under section 11 of Income Tax Act. The ld Sr DR for the revenue prayed for dismissal of the appeal.
5. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. Firstly, we are considering the plea of condonation of delay in filing appeal. The primary contention of ld. AR of the assessee is that at the time of filing appeal before CIT(A), the assessee trust as provided e-mail address of zbzehz@yahoo.com and that no Shruparak Educational and Medical Trust A.Y. 2015-16 notice were sent through such e-mail rather notice were sent through different e-mail i.e. fakihco@gmail.com. Such fact is evident from screen shot of ITBA portal, copy of which is placed on record. Thus, we find merit in the submission of ld. AR of the assessee that notice of hearing of appeal was not served upon the assessee. Similarly, the final order passed by ld. CIT(A) was also not received by assessee. Therefore, we find that there is no intentional or deliberate delay in filing appeal before Tribunal. Hence, delay in filing appeal before Tribunal is condoned. Now adverting to the merits of the case.
We find that lower authorities denied the application of income on the ground that Form No. 10 was furnished after filing return of income. We find that assessee is having registration under section 12A. Admittedly Form No. 10A was filed during assessment proceedings. We find that Andhra Pradesh and Telangana High Court in Samaj Seva Nidhi vs ACIT (supra) held that when assessee furnished information about accumulation of certain amount before completion of assessment, the assessee was entitled of accumulation under section 11(2). Similar view was taken by co-ordinate bench of Bangalore Tribunal in Ursuline Franciscan Congregation Feneralate Somerpann Declaralakatte Vs ITO (supra) and Hyderabad Tribunal in Society of Catechist sisters of St. Ann vs ADIT (Exemptions) (supra). Thus, considering the aforesaid factual and legal position, we direct the assessing officer to verify the fact about accumulation of income and allow relief to
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 21.04.2025.