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Facts
The assessee, a registered trust, filed its return of income and Form 10B on 15.02.2021, which was the extended due date. The CPC did not grant credit for application of income because Form 10B was uploaded on the same day as the return filing, not one month prior as required.
Held
The Tribunal held that the assessee cannot be denied exemption merely on the bar of limitation for furnishing the audit report in Form 10B, considering the extended due dates granted by the Hon'ble Apex Court and relied on High Court judgments. The issue was remitted back to the AO for examination of the expenditure.
Key Issues
Whether the assessee can be denied exemption for delayed filing of Form 10B given the circumstances and extended due dates, and whether the issue of expenditure needs to be examined by the AO.
Sections Cited
12AA, 143(1)(a), 119(2)(b)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHU & SHRI. SOUNDARARAJAN K
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the assessee against the Order passed by the learned CIT(A) (NFAC), vide DIN ITBA/APL/S/250/2024- 25/1072341237(1) dated 20.01.2025.
Briefly stated facts of the case are that assessee is registered under section 12AA of the Act and filed return of income on 15.02.2021 declaring gross total receipt of Rs.1,31,23,301/-. Assessee claimed Rs.1,29,86,579/- as application towards objectives of the Trust. Assessee had accumulation to the extent of balance sum of Rs.1,36,722/- and Form 10B was duly certificated by CA uploaded on 15.02.2021. The extended due date for filling return of income was 15.02.2021. The return was processed by CPC. u/s 143(1)(a) of Page 2 of 4 the Act. The Credit for application of income was not given to the assessee vide processing dated 30.11.2021 and it was observed that assessee did not file Form 10B prior to one month of due date of filing of return of income. Extended due date for filing of return of income was 15.02.2021.
Aggrieved from the above processing of return under section 143(1)(a) of the Act, assessee filed appeal before learned CIT(A). The learned CIT(A) dismissed appeal of the assessee.
Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel reiterated the submissions made before the learned CIT(A) and submitted that there is delay in uploading of Form 10B within the extended due date because of outbreak of covid 19 pandemic and he relied on judgment of Hon’ble High Court of Kolkata in the case of PCIT Vs. Kalyan Educational Society in ITAT/107/2024 IA No.GA/2/2024.
On the other hand, learned DR supported the Order of learned CIT(A). Further submitted that Act mandates to the assessee to file Form 10B one month prior to the due date of filing of return of income. However assessee filed Form 10B on the last date of due date of filing of return of income i.e., on 15.02.2021 and if there was delay assessee could have opted beneficial section under section 119(2)(b) of the Act and could have applied for condonation of delay but it did not do so. In the rejoinder learned DR further submitted that Hon’ble Apex Court had extended due date in MA No.21/2022 and extended due date till 28.02.2022 vide Order dated 10.01.2022. Therefore due date was also extended in line with the judgment of Hon’ble Apex Court and in the judgment of Hon’ble High Court of Kolkata. The Hon’ble High Court has decided the issue in favour of assessee noted supra.
Page 3 of 4 6. Considering the rival submissions, we noted that assessee filed return of income on 15.02.2021 and Form 10B was also uploaded on 15.02.2021 declaring Nil income. The total gross receipt is Rs.1,31,23,301/- and application of income is Rs.1,29,86,579/- for the objective of the Trust and there was net income of Rs.1,36,722/-. The CPC while processing the return did not give credit for application of income because Form 10B was not uploaded as per the statutory provision which is within one month prior to due date of filing of return of income. Here in the case on hand, the extended due date was 15.02.2021 and on the same date it was uploaded. The Hon’ble Apex Court in MA cited supra extended due date by 28.02.2022. Therefore the extended due date should be considered as per judgment of Hon’ble Apex Court. The judgment of Hon’ble High Court of Kolkata as relied on by the learned Counsel is application in the present case of the assessee. We hold that assessee cannot be denied exemption merely on bar of limitation for furnishing audit report in Form 10B. In support of our decision we rely on the judgment of Hon’ble Apex and judgment of Hon’ble High Court of Kolkata and in the case of Sarvodaya Charitable Trust v. Income Tax Officer. (Exemption)[2021] 125 taxmann.com 75 (Gujarat). Since in the case on hand application of income has not been examined by any of the authorities below whether assessee has actually incurred expenditure towards objective of the Trust or not, therefore this issue is remitted back to the AO for examination of the expenditure in line with the objective of the Trust and grant exemption if it is found in order application of income should be given to the assessee to that extent.