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Income Tax Appellate Tribunal, SMC BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, MUMBAI SHRI M. BALAGANESH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER (Assessment Year: 2015-16) The Goa Hindu Association, Gomantdham, 358 Dr. Bhadkamkar Marg, Grant Road, Mumbai - 400007 [PAN: AAATT0392C] ……………… Appellant Income Tax Officer (Exemptions)-2(4), Vs Mumbai through CPC, Bangalore, 5th Floor, Piramal Chambers, Lalbaug, Parel, Mumbai - 400012 ……………. Respondent Appearances For the Appellant/Assessee : Shri Shankar Jalgar For the Respondent/Department : Shri Rajiv Singh Date of conclusion of hearing : 26.07.2022 Date of pronouncement of order : 21.10.2022
O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant has challenged the order, dated 13.02.2020, passed by the Ld. Commissioner of Income Tax (Appeals)-1, Mumbai [hereinafter referred to as „the CIT(A)‟] for the Assessment Year 2015-16, whereby the Ld. CIT(A) had dismissed the appeal filed by the Appellant against the intimation/order, dated 22.10.2016, issued/passed by Assistant Commissioner of Income Tax, CPC under Section 143(1) of the Act. The appeal is treated as having been filed within limitation in view of the order, dated 10.01.2022, passed
Assessment Year: 2015-16 by the Hon‟ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020.
The Appellant has raised the following grounds of appeal:
1. Ground No. 1- Re: Denial the claim of Appellant for deduction u/s 11(2): The learned Commissioner of Income Tax (Appeals)-1, Mumbai [hereafter referred as the 'CIT(A)'] erred in upholding the action of the Income Tax Officer (Exemption) 2(4), Mumbai through Deputy Commissioner of Income Tax, CPC, Bangalore [hereafter referred as the A.O'] in refusing to allow claim of the appellant for accumulation/ deduction of Rs. 49,90,270 u/s 11(2) of the Income Tax Act, 1961 (the 'Act').
2. Ground No. 2- Re: Denial to accept Form 10 filed by the appellant before Assessment: Without prejudice and in the alternative, the learned CIT(A) erred in law and facts to accept the Form 10 filed electronically and with A.O. by the appellant before completion of assessment.
3. Ground No. 3- Re: Refusal to carry out rectification u/s 154: Without prejudice, The learned C.I.T(A) erred in upholding the action of the Income Tax Officer (Exemption)- 2(4), Mumbai, refusing to carry out rectification u/s 154 on an application made by the appellant in respect of disallowance of deduction u/s 11(2) of the Act.
4. The above grounds are independent and without prejudice to each other.”
3. The relevant facts in brief are that the Appellant is a public charitable trust registered with the Director of Income Tax (Exemptions), Mumbai under Section 12A of the Income Tax Act. The Appellant is also registered with the Charity Commissioner, Mumbai and holds certificate of registration, dated 25.03.1953. For the Assessment Year 2015-16, the Appellant filed its return of income on 29.10.2015 declaring „Nil‟ income along with Audit Report in Form No. 10B. The Appellant had invested the amount
Assessment Year: 2015-16 accumulated in Fixed Deposit with Scheduled Banks as per the requirement of Section 11(5) of the Act and had claimed benefit of Section 11(2) of the Act in respect of the same. The return filed by the Appellant was processed under Section 143(1) of the Act and total income of the Appellant was determined at INR.46,52,761/- disallowing Appellant‟s claim under Section 11(2) of the Act in relation to accumulation of surplus. Intimation/order under Section 143(1) of the Act, dated 22.10.2016, was issued to the Appellant to this effect.
Upon enquiry with the CPC, Bengaluru, the Appellant got to know that the Appellants claim under Section 11(2) of the Act has been rejected since the Appellant had not filed Statement in Form No. 10 giving the details of amount accumulated along with purpose and period of accumulation in terms of Section 11(2)(a) of the Act. The Appellant submitted Form 10 on 29.05.2017 along with fresh Return of Income with request to rectify the intimation, dated 22.10.2016, issued under Section 143(1) of the Act. Vide, communication dated 13.06.2017, Appellant‟s request for rectification was rejected stating that the Appellant should approach the jurisdictional Assessing Officer for all rectification related matters. Being aggrieved, the Appellant filed appeal before the CIT(A) against the aforesaid rejection of rectification. The CIT(A) by the way of order, dated 13.02.2020, impugned by way of present appeal dismissed the appeal. Therefore, the Appellant is in appeal before us.
We have heard the rival submissions and perused the material on record. While the Appellant relied upon written submission, the Learned Departmental Representative relied upon the order passed by the CIT(A). The only ground for rejection of claim of Assessment Year: 2015-16 the Appellant under Section 11(2) of the Act is that the Appellant failed to file Form 10 electronically before the due date for filing of the return under Section 139(1) of the Act.
It is no longer res integra that the provision for filing Form No. 10 electronically before the due date of filing the Return of Income, introduced by inserting clause (c) in Section 11(2) of the Act by Finance Act 2015, were applicable prospectively to Assessment Year 2016-17 and subsequent assessment years. Un-amended provision of Section 11(2) and Rule 17 would apply to the present case since the assessment year before us is Assessment Year 2015-16. Accordingly, filing of Form 10 would not be governed by any prescribed statutory time limit. However, we note that in the case of CIT Vs. Nagpur Hotel Owner's Association [2001] 247 ITR 201 (SC), the Hon'ble Supreme Court has, while dealing with Section 11(2) of the Act and Rule 17 of the Rules, held that there would be substantial compliance of the applicable provisions in case Form No. 10 was filed by the assessee with the Assessing Officer before the completion of assessment proceedings.
The above judgment of the Hon‟ble Supreme Court was followed by the Hon‟ble Bombay High Court in the case of CIT-III, Pune Vs Sakal Relief Fund: [2017] 295 CTR 561 (Bombay) wherein the Hon‟ble Court was pleased to grant the benefit of deduction under Section 11(2) of the Act to an assessee in a case where Form 10 was filed before the Assessing Officer during the course of re-assessment proceedings.
Taking note of the aforesaid judgments of the Hon‟ble Supreme Court and the Hon‟ble Bombay High Court, in the case of The Assessment Year: 2015-16 Ceylon Pentecostal Mission vs ACIT (CPC), Bangalore [ITA.No.320./Chny/2021, dated 08.10.2021] the Chennai Bench of the Tribunal had, in identical facts and circumstances, held that intimation issued under Section 143(1) of the Act cannot be treated at par with the regular assessment. Since no notice was given to the assessee before disallowing deduction under Section 11(2) of the Act while processing return under section 143(1) of the Act in that case, the assessee did not have any occasion to place Form 10 before the assessing officer. Therefore, the Tribunal allowed the claim of the assessee for deduction under Section 11(2) of the Act on the basis of Form 10 filed in appellate proceedings before CIT(A) by treating such appellate proceedings before CIT(A) as an extension of the assessment proceedings.
Similarly, the Bangalore Bench of the Tribunal had, in the case of Bunts Sangha vs The ITO(Ex) Ward-1, Mangaluru [ITA No. 569/ Bang/2018 dated 30.08.2018] had concluded that the rectification application under Section 154 of the Act filed by the assessee in that case was incorrectly rejected holding as under:
“9. The view taken by the Tribunal in the aforesaid decision following the decision of Hon'ble Supreme Court in the case of Nagpur Hotel Owners Association (supra) is that intimation required under Section 11 has to be furnished before the assessing authority completes the concerned assessment. In the present case, there was no assessment proceeding and there is only intimation u/s. 143(1) of the Act. An intimation u/s. 143(1) is not an assessment as laid down by the Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers in Civil No.2830 of 2007, judgment dated 23.05.2007. In view of the legal position as explained above, we are of the view that the AO ought to have accepted the application for rectification u/s. 154 of the Assessment Year: 2015-16 Act. We accordingly direct the AO to allow application u/s. 154 of the Act and rectify the intimation.” (Emphasis Supplied) 10. In view of the above judicial precedents, we hold that the Appellant‟s claim for deduction under Section 11(2) of the Act was incorrectly rejected while processing return of income. The application for rectification ought to have been accepted. Accordingly, we direct the Assessing Officer to rectify the intimation and delete the addition of INR.46,52,761/-.
In the result, the present appeal is allowed.
Order pronounced on 21.10.2022.