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Facts
The assessee, Maharashtra Council of Homoeopathy, is appealing against the denial of exemption under section 11 for AY 2018-19 and 2019-20. The denial was primarily due to the belated filing of Form 10/10B. For AY 2018-19, the return was filed belatedly, and Form 10B was filed before the due date of the belated return, with a condonation petition pending. For AY 2019-20, the original return was filed on time, and a revised return was filed with Form 10/10B, but the condonation petition was still pending.
Held
The Tribunal held that the denial of exemption under section 11 was incorrect. For AY 2018-19, the Tribunal directed the CIT(E) to dispose of the condonation petition for the belated filing of Form 10B and, if condoned, to allow the benefit of section 11. For AY 2019-20, the Tribunal noted that the revised return substitutes the original return, and Form 10 filed before the revised return should be considered as filed within time. Consequently, the CIT(A)'s rejection of exemption was deemed incorrect.
Key Issues
Whether the denial of exemption under Section 11 was justified due to the belated filing of Form 10/10B, especially when condonation petitions were pending or when revised returns were filed after the due date but with forms filed prior to the revised return filing date.
Sections Cited
11, 12A, 139(1), 139(5), 143(1), 143(1)(a)(ii)
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, JM &
Appellant /Assessee by : Shri Rajesh Shah, AR : Shri R. R. Makwana, Addl. CIT Revenue / Respondent by Date of Hearing : 20.02.2025 Date of Pronouncement : 27.02.2025 O R D E R Per Padmavathy S, AM: These appeals by the assessee are against the orders of Commissioner of Income Tax (Appeals), Panchkula [for short 'the CIT(A)'] both dated 08.11.2024 for the AY 2018-19 & 2019-20. The common issue contended in these appeal by the assessee is with regard to denial of exemption under section 11 for the reason that Form 10/10B was not filed within the prescribed time. AY 2018-19 2. The assessee is registered under Maharashtra Council Practitioner Act, 1960 and is a State Government statutory body which regulates the Homeopathy profession. It is a body corporate to regulate the qualifications and the registration of Homeopathic Practitioners in the State of Maharashtra with a view to encourage the study and spread of this system. The assessee is also registered under section 12A of the Income Tax Act, 1961 (the Act). For the AY 2018-19 the assessee could not file the return of income due to administrative problems and the belated return was filed on 28.03.2019. The Form-10B which was required to be filed before the due date for filing the return of income was filed on 27.03.2019 and was subsequently revised on 29.07.2020. The assessee also filed Form-10 on 31.07.2020. The assessee has applied to the Principle CIT (Exemption) for condonation of delay in filing the Form-10/10B and the said application is still pending. The return of the assessee was processed under section 143(1) and in the intimation dated 18.03.2020 the assessee was denied the benefit of exemption under section 11 of the Act to the reason that Form-10B was not filed within the prescribed time limit. The assessee filed appeal before the CIT(A) against the intimation under section 143(1) of the Act. The CIT(A) confirmed the disallowance made by the CPC for the reason that the delay in filing Form-10B has not been condoned by the CIT(E) and that the JCIT(A) has no jurisdiction to condone the delay. The assessee is in appeal before the Tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. The assessee for the year under consideration has filed return of income belatedly and Form 10B was filed prior to the date of filing the belated return. The assessee has filed the condonation petition in this regard before CIT(E) and the same is pending for disposal. In the mean time while processing the return under section 143(1), the AO has denied the benefit under section 11 of the Act to the assessee. In this regard we notice that the CBDT vide circular No.06 / 2020 dated 19.02.2020 notified with regard to condonation of delay in filing the return of income and Form 10 for AY 2018-19 stated that the CIT(E) are authorised to condone the delay in filing the return and Form 10. The CBDT vide subsequent circulars dated 11.07.2022 (circular no.17/2022) and dated 18.11.2024 (circular no.16/2024) had fixed the timelines for disposing of the condonation petition filed for AY 2018-19 onwards. As per the circular dated 18.11.2024, the time limit was 6 months from the end of the month in which the petition is filed. However in assessee's case petition filed has been pending to be disposed till date. Therefore we direct the CIT(E) to dispose off the condonation petition filed by the assessee. We further direct the AO once the delay is condoned to consider the issue benefit under section 11 in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. It is ordered accordingly AY 2019-2020
The assessee for the year under consideration has filed the return of income under section 139(1) on 30.09.2019 and there was no delay in filing the return of income. The return was processed under section 143(1) and in response to notice issued under section 143(1)(a)(ii) for incorrect claim, the assessee filed the reply and also filed Form 10 & 10B before the AO. The CPC did not consider the reply and the Forms filed. The assessee filed a petition for condonation of delay before the Principal CIT(E) which is pending for disposal. The assessee also filed the revised return on 31.07.2020 along with Form-10/10B and the revised return is also processed under section 143(1) on 09.11.2020. In the intimation passed processing the revised return also the exemption under section 11 was denied to the assessee. The assessee filed the appeal before the CIT(A). The CIT(A) upheld the disallowance of exemption under section 11 of the Act for the reason that the petition for condoning the delay is pending before the CIT(E). The assessee is in appeal before the Tribunal.
We heard the parties and perused the material on record. The original return of income filed by the assessee on 30.09.2019 and that the said return was revised on 28.08.2020. Therefore, it is clear that both the original return and the revised return have been filed by the assessee before the due date under section 139(1) and 139(5) respectively. We further notice that both the original return and the revised return have been processed under section 143(1) of the Act which could mean that the revised return has been accepted by the revenue. It is a settled position of law that when the assessee files a revised return under section 139(5) revising the original return filed within the due date under section 139(1) then the revised return substitutes the original return as has been held by the Hon'ble Allahabad High Court in the case of Niranjan Lal Ram Chandra v. CIT (134 ITR 352 ). For the year under consideration the assessee has filed Form-10 on 31.07.2020 i.e. before filing the revised return of income. As already mentioned, since the revised return replaces the original return of income the Form-10 filed before the filing of revised return ought to be considered as filed before the due date for filing the return of income. In view of this discussion in our considered view, the CIT(A) is not correct in rejecting the exemption claimed by the assessee under section 11 for the reason that Form-10 has not been filed as per the prescribed time limit. Further we notice that the assessee has filed the petition for condnation of delay in filing Form-10 which is pending for disposal by the CIT(E). We accordingly, direct the CIT(E) to condone the delay based on the facts stated hereinabove. We further direct the AO once the delay is condoned to consider the issue benefit under section 11 in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. It is ordered accordingly.
In result, the appeal of the assessee for AY 2018-19 & 2019-20 are allowed for statistical purposes.