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Facts
The assessee, a charitable trust, sought exemption under section 11 of the Income-tax Act. The disallowance of this exemption was confirmed by the Ld. CIT(A), leading to the present appeal.
Held
The Tribunal held that the delay in filing Form 10B was due to technical glitches and that the assessee had a reasonable cause. The Tribunal set aside the order of the Ld. CIT(A) and restored the matter to the Assessing Officer.
Key Issues
Whether the disallowance of exemption under section 11 due to delayed filing of Form 10B is justified when the delay was due to technical glitches and reasonable cause was shown.
Sections Cited
11, 10B, 139(1), 139(8A), 12A(1)(b), 11(1), 11(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “H (SMC
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal has been preferred by the assessee against order dated 12.06.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – Coimbatore [in short ‘the Ld. CIT(A)’] confirming the disallowance of exemption u/s 11 of the Income-tax Act, 1961 (in short ‘the Act’) amounting to Rs.12,94,304/-.
2. We have heard rival submissions of the parties an We have heard rival submissions of the parties an We have heard rival submissions of the parties and perused the relevant material the relevant material on record. The assessee is charitable trust e is charitable trust seeking exemption u/s 11 of the Income seeking exemption u/s 11 of the Income-Tax Act. 1961( in short the Tax Act. 1961( in short the Act). The assessee was required to file form No. 10B prescribed Act). The assessee was required to file form No. 10B prescribed Act). The assessee was required to file form No. 10B prescribed under the Income-tax Rules, 1962 for accumulation of the funds tax Rules, 1962 for accumulation of the funds tax Rules, 1962 for accumulation of the funds which were not utilised for the charitab which were not utilised for the charitable purpose in the year under le purpose in the year under consideration. But the prescribed form No. 10B was not filed on due consideration. But the prescribed form No. 10B was not filed on due consideration. But the prescribed form No. 10B was not filed on due date and therefore, the central Processing centre disallowed the date and therefore, the central Processing centre disallowed the date and therefore, the central Processing centre disallowed the claim of exemption u/s 11 of the Act to that extent. On further claim of exemption u/s 11 of the Act to that extent. On further claim of exemption u/s 11 of the Act to that extent. On further appeal, the ld CIT(A) allowed appeal, the ld CIT(A) allowed partial relief of quantum of exemption partial relief of quantum of exemption but upheld the disallowance in principle. The relevant finding of the but upheld the disallowance in principle. The relevant finding of the but upheld the disallowance in principle. The relevant finding of the ld CIT(A) is reproduced as under: ld CIT(A) is reproduced as under:
“7.1 The appellant claimed Accumulation within the “7.1 The appellant claimed Accumulation within the “7.1 The appellant claimed Accumulation within the time of income of the previous year applied to charitable time of income of the previous year applied to charitable time of income of the previous year applied to charitable or religious purposes in India during that year or religious purposes in India during that year or religious purposes in India during that year amounting to Rs.12,94,204/ amounting to Rs.12,94,204/-. 8.
The The appellant appellant had had e e-filed Form-10B 10B vide vide acknowledgement number 997 acknowledgement number 997168520280323 and the 168520280323 and the form 10B was e form 10B was e-filed, furnished and verified by the filed, furnished and verified by the Auditor on 28/03/2023 which was not one month prior Auditor on 28/03/2023 which was not one month prior Auditor on 28/03/2023 which was not one month prior the due date of filing of Income Tax Return under the due date of filing of Income Tax Return under the due date of filing of Income Tax Return under section 139(1). Due date for filing return of income for section 139(1). Due date for filing return of income for section 139(1). Due date for filing return of income for the year under considera the year under consideration was 31/10/2022.The tion was 31/10/2022.The extended due date of furnishing was 07.11.2022. extended due date of furnishing was 07.11.2022. extended due date of furnishing was 07.11.2022. 9.1. The return of income has been filed u/s.139(8A) 9.1. The return of income has been filed u/s.139(8A) 9.1. The return of income has been filed u/s.139(8A) after the due date but the appellant has to file audit after the due date but the appellant has to file audit after the due date but the appellant has to file audit report one month before the due date of furnishing report one month before the due date of furnishing report one month before the due date of furnishing return of income as per return of income as per 12A(1)(b) of the I.T.Act which is 12A(1)(b) of the I.T.Act which is the time limit as per sec 139(1).The appellant has failed the time limit as per sec 139(1).The appellant has failed the time limit as per sec 139(1).The appellant has failed to fulfill the conditions for allowing accumulation of to fulfill the conditions for allowing accumulation of to fulfill the conditions for allowing accumulation of income under section 11(1) of the IT Act. The appellant income under section 11(1) of the IT Act. The appellant income under section 11(1) of the IT Act. The appellant
ITA No. 4002/MUM/2024 3 Caregiver Saathi Foundation Caregiver Saathi Foundation filed return of income along with audit report in for filed return of income along with audit report in for filed return of income along with audit report in form 10B on same day i.e.28/03/2023. 10B on same day i.e.28/03/2023. 9.2. It is noticed form the adjustment notice sent that 9.2. It is noticed form the adjustment notice sent that 9.2. It is noticed form the adjustment notice sent that the communication that the exemption claimed in the communication that the exemption claimed in the communication that the exemption claimed in respect of the accumulated amount Rs.19,19,371/ respect of the accumulated amount Rs.19,19,371/ respect of the accumulated amount Rs.19,19,371/- is not allowed on account of late filing of Form 10B but the not allowed on account of late filing of Form 10B but the not allowed on account of late filing of Form 10B but the Form 10B reflect the amount of income of the previous B reflect the amount of income of the previous B reflect the amount of income of the previous year applied to charitable or religious purposes in India year applied to charitable or religious purposes in India year applied to charitable or religious purposes in India during that year amounting to Rs.12,94,204/ during that year amounting to Rs.12,94,204/-. In view . In view of the above the disallowance made by the CPC for the of the above the disallowance made by the CPC for the of the above the disallowance made by the CPC for the amount Rs.19,19,371 is restricted Rs.12,94, amount Rs.19,19,371 is restricted Rs.12,94,204/ 204/- and the excess amount of Rs.6,25,167/ the excess amount of Rs.6,25,167/- is hereby deleted.” is hereby deleted.” However, we find that the Tribunal in the case of Shri Pushkar 2.1 However, we find that the Tribunal in the case of However, we find that the Tribunal in the case of Foundation in for assessment year Foundation in for assessment year Foundation in ITA No. 2714/Mum/2024 for assessment year 2021-22 has held that the Central Board of Direct Taxes had has held that the Central Board of Direct Taxes had has held that the Central Board of Direct Taxes had authorized the respective Commissioner of Income zed the respective Commissioner of Income- -tax to condone the delay in filing the Form No. 10B. The relevant finding of the the delay in filing the Form No. 10B. The relevant finding of the the delay in filing the Form No. 10B. The relevant finding of the Tribunal (supra) is reproduced as under: Tribunal (supra) is reproduced as under:
“4.4 However, we noticed that the CBDT issued 3 circulars “4.4 However, we noticed that the CBDT issued 3 circulars “4.4 However, we noticed that the CBDT issued 3 circulars No. 15, 16 & No. 17 on 19th July 2 No. 15, 16 & No. 17 on 19th July 2020, whereby it 020, whereby it authorized the Commissioners of Income authorized the Commissioners of Income-tax to admit tax to admit applications for condonation of delay in filing Form 9A, Form applications for condonation of delay in filing Form 9A, Form applications for condonation of delay in filing Form 9A, Form 10, Form No. 10B & 10BB for AY 2018 10, Form No. 10B & 10BB for AY 2018-19 or for any 19 or for any subsequent Assessment Years, where there is the delay of subsequent Assessment Years, where there is the delay of subsequent Assessment Years, where there is the delay of up to 365 days and up to 365 days and decide on merits after considering decide on merits after considering reasonable cause for delay. The relevant circular in relation reasonable cause for delay. The relevant circular in relation reasonable cause for delay. The relevant circular in relation to form No. 10 is reproduced as under: to form No. 10 is reproduced as under: Circular No. 17/2022 Circular No. 17/2022
F.No.197/89/2022 F.No.197/89/2022-IT A-I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Central Board
New Delhi the 17th July, 2022 New Delhi the 17th July, 2022 Sub: Condonation of delay under Section 119(2)(b) of Sub: Condonation of delay under Section 119(2)(b) of Sub: Condonation of delay under Section 119(2)(b) of the Income- -tax Act, 1961 in filing of Form No. 9A and tax Act, 1961 in filing of Form No. 9A and Form No. 10 for Assessment Year 2018 Form No. 10 for Assessment Year 2018- 19 and subsequent years- Reg. subsequent years In exercise of the powers conferre In exercise of the powers conferred under section 11 9(2) of d under section 11 9(2) of the Income-tax Act, 1961 (hereinafter referred to as 'Act') , the tax Act, 1961 (hereinafter referred to as 'Act') , the tax Act, 1961 (hereinafter referred to as 'Act') , the Central Board of Direct Taxes (CBDT) by Circular No . 3/ Central Board of Direct Taxes (CBDT) by Circular No . 3/ Central Board of Direct Taxes (CBDT) by Circular No . 3/ 2020 [F.No .1 97 / 55 / 20 18 2020 [F.No .1 97 / 55 / 20 18-ITA-I] dated 03.01.2020 I] dated 03.01.2020 authorized the Commissioners of Income authorized the Commissioners of Income-tax to admit tax to admit applications of condonation of delay in filing Form No. 9A applications of condonation of delay in filing Form No. 9A applications of condonation of delay in filing Form No. 9A and Form No. 10 for A Y 2018 and Form No. 10 for A Y 2018- 19 or for any subsequent 19 or for any subsequent Assessment Years where there is delay of up to 365 days Assessment Years where there is delay of up to 365 days Assessment Years where there is delay of up to 365 days and decide on merits. and decide on merits.
Further to the powers delegated to Commissioners of 2. Further to the powers delegated to Commissioners of 2. Further to the powers delegated to Commissioners of Income-tax as discussed above, the CBDT hereby directs x as discussed above, the CBDT hereby directs x as discussed above, the CBDT hereby directs that where there is delay of beyond 365 days upto three that where there is delay of beyond 365 days upto three that where there is delay of beyond 365 days upto three years in filing Form No. 9A and Form No. 10 for Assessment years in filing Form No. 9A and Form No. 10 for Assessment years in filing Form No. 9A and Form No. 10 for Assessment Year 20 18-19 or for any subsequent Assessment Years, the 19 or for any subsequent Assessment Years, the 19 or for any subsequent Assessment Years, the Pro Pro Chief Chief Commissioners Commissioners of of Income-tax Income 1 Chief Commissioners of Income Commissioners of Income-tax are authorized to admit such tax are authorized to admit such applications of condonation of delay under section 119(2) of applications of condonation of delay under section 119(2) of applications of condonation of delay under section 119(2) of the Act and decide on merits. the Act and decide on merits.
3. The Pr. Chief Commissioner 1 Chief Commissioner of 3. The Pr. Chief Commissioner 1 Chief Commissioner of 3. The Pr. Chief Commissioner 1 Chief Commissioner of Income-tax, as the case may be, while enterta tax, as the case may be, while enterta tax, as the case may be, while entertaining such applications for condona ti on of delay in filing form No. 9A applications for condona ti on of delay in filing form No. 9A applications for condona ti on of delay in filing form No. 9A and Form No. 10 , shall satisfy themselves that the app and Form No. 10 , shall satisfy themselves that the app and Form No. 10 , shall satisfy themselves that the app licant was prevented by reasonable cause from filing such licant was prevented by reasonable cause from filing such licant was prevented by reasonable cause from filing such Form within the stipulated time. In respect of Form No. 10 , Form within the stipulated time. In respect of Form No. 10 , Form within the stipulated time. In respect of Form No. 10 , the Pr. Chief Chief Commissioner 1 Chief Commissioner of Income Commissioner 1 Chief Commissioner of Income- -tax, as the case may be, shall also satisfy themselves that the amount case may be, shall also satisfy themselves that the amount case may be, shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in accumulated or set apart has been invested or deposited in accumulated or set apart has been invested or deposited in anyone or more of the forms or modes specified in sub anyone or more of the forms or modes specified in sub anyone or more of the forms or modes specified in sub- section (5) of section section (5) of section 11 of the Act.
Further, the Pr. Chief Commissioner I Chief Commissioner 4. Further, the Pr. Chief Commissioner I Chief Commissioner 4. Further, the Pr. Chief Commissioner I Chief Commissioner of Income-tax, as the case may be, shall preferably dispose tax, as the case may be, shall preferably dispose tax, as the case may be, shall preferably dispose 5 Caregiver Saathi Foundation Caregiver Saathi Foundation the application within three months of receipt of the the application within three months of receipt of the the application within three months of receipt of the application. 4.6 In the instant case before us, the assessee has filed a In the instant case before us, the assessee has f In the instant case before us, the assessee has f copy of the grievance petition, which was filed on Income copy of the grievance petition, which was filed on Income copy of the grievance petition, which was filed on Income-tax Portal on 21.03.2022 where he has submitted that assessee Portal on 21.03.2022 where he has submitted that assessee Portal on 21.03.2022 where he has submitted that assessee could not file the form due to technical glitches on the portal could not file the form due to technical glitches on the portal could not file the form due to technical glitches on the portal of the Income of the Income-tax Department. Thus it is evident that delay is tax Department. Thus it is evident that delay is within the period of 365 days and the assessee was thin the period of 365 days and the assessee was thin the period of 365 days and the assessee was prevented by sufficient and reasonable cause in filing the prevented by sufficient and reasonable cause in filing the prevented by sufficient and reasonable cause in filing the Form No. 10 . Thus, we set aside the order of the Ld. CIT(A) Form No. 10 . Thus, we set aside the order of the Ld. CIT(A) Form No. 10 . Thus, we set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Assessing and restore the matter back to the file of the Assessing and restore the matter back to the file of the Assessing Officer with the direction to Officer with the direction to the assessee for applying to the the assessee for applying to the concerned commissioner of Income concerned commissioner of Income-tax (Exemption) and seek tax (Exemption) and seek condonation for delay in filing Form No.
10. After condonation for delay in filing Form No.
After condonation for delay in filing Form No.
10. After condonation of delay in filing for No. 10 by the CIT condonation of delay in filing for No. 10 by the CIT condonation of delay in filing for No. 10 by the CIT (exemption), the AO shall decide the claim of exemption u/s (exemption), the AO shall decide the claim of exemption u/s (exemption), the AO shall decide the claim of exemption u/s 11(2) of the Act in accordance with law. The grounds No. 1 to 1(2) of the Act in accordance with law. The grounds No. 1 to 1(2) of the Act in accordance with law. The grounds No. 1 to 2.2 of the appeal are accordingly allowed for statistical 2.2 of the appeal are accordingly allowed for statistical 2.2 of the appeal are accordingly allowed for statistical purposes. The remaining grounds are rendered academic purposes. The remaining grounds are rendered academic purposes. The remaining grounds are rendered academic only since, we have already restored the issue back to the only since, we have already restored the issue back to the only since, we have already restored the issue back to the file of the Assessing Of file of the Assessing Officer. 2.1 In the instant case, there is no deliberate delay on the part of In the instant case, there is no deliberate delay on the part of In the instant case, there is no deliberate delay on the part of the assessee and there is no malafide and hence, the delay in filing the assessee and there is no malafide and hence, the delay in filing the assessee and there is no malafide and hence, the delay in filing the said form is deserved to be deserved to be condoned. Therefore, in the interest condoned. Therefore, in the interest of the justice, we set aside the order of of the justice, we set aside the order of the Ld. CIT(A) on the issue in the Ld. CIT(A) on the issue in dispute and restore the matter back to the file of the Assessing dispute and restore the matter back to the file of the Assessing dispute and restore the matter back to the file of the Assessing Officer with the direction to the assessee for applying to the Officer with the direction to the assessee for applying to the Officer with the direction to the assessee for applying to the concerned Commissioner of concerned Commissioner of Income-tax (Exemption Exemption) and seek condonation of delay in filing Form No condonation of delay in filing Form No. 10B. . 10B. Thereafter, the Assessing Officer shall decide the claim of the exemption u/s 11 in Assessing Officer shall decide the claim of the exemption u/s 11 in Assessing Officer shall decide the claim of the exemption u/s 11 in accordance with law. The grounds of appeal of the assessee are accordance with law. The grounds of appeal of the assessee are accordance with law. The grounds of appeal of the assessee are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes. statistical purposes.
Order pronounced in the open Court on nounced in the open Court on 21/01/2025. /01/2025.