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Facts
The assessee, a public charitable trust, claimed exemption under Section 11 for AY 2018-19. The CPC denied this exemption due to an inadvertent omission to fill the column for Section 12A/12AA registration in the Return of Income (RoI). Although the trust had a valid 12A registration, the online portal's complex format led to this omission.
Held
The Tribunal held that the denial of exemption on a technicality, where the assessee had otherwise provided details of its charitable nature and registration, was not justified. The CPC should have sought clarification rather than denying the exemption outright.
Key Issues
Whether exemption under Section 11 can be denied solely due to an inadvertent omission in filling the relevant field for Section 12A/12AA registration in the electronically filed Return of Income.
Sections Cited
143(1), 12A, 11, 12AA, 10(23C)
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee Trust which claims to be engaged in charitable work and its main grievances is that the Learned Commissioner of Income Tax (Appeal)/Addl/JCIT(A), Panchkula, (hereinafter referred to as “the Ld.CIT(A)”), dated 30.10.2024 for the Assessment Year (hereinafter referred to as "AY”) 2018-19 erred in confirming the action of the CPC passing the intimation order without giving exemption u/s.12A of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) merely because there was an inadvertent omission to fill in a column in the Return of Income (RoI) filed electronically.
The brief facts are that the assessee is a public Charitable Trust which is enjoying 12A registration and it filed its RoI on 18.08.2018 for AY 2018-19 claiming exemption of Rs.42,00,889/- u/s.11 of the Act. But the said claim was denied by the CPC vide intimation dated 10.03.2020 u/s.143(1) of the Act, because, assessee omitted to fill the column wherein it had to be shown that assessee was registered u/s.12A of the Act. In this regard, the Ld.AR submitted that there was an inadvertent error while filling up the RoI in the online portal and pointed out that to fill up the columns in the RoI [electronically] is a complex & difficult task and pleaded for condoning the omission/mistake. The assessee is also noted to have brought to the notice of the Ld.CIT(A) that in the next year 2019- 20, the format of RoI was revised by the department and because of it, there were columns specifically asking about the details of registration u/s.12AA/12A and the assessee had answered the same and was granted exemption u/s.11 of the Act. However, the Ld.CIT(A) is noted to have dismissed the appeal only on the ground that the assessee while filling up the details in the return didn’t explicitly expressed about the registration granted to it u/s.12A/10(23C) of the Act etc. Aggrieved, the assessee is before us.
We have heard both the parties and perused the material available on record. The assessee is noted to be a public Charitable Trust enjoying section 12A registration [by the Director of Income Tax (Exemptions) vide order No.DIT(E) 2/(1375)/08/09 dated 15.07.2009].; and is aggrieved by the action of the CPC/Ld.CIT(A) rejecting its claim for exemption u/s.11 to the tune of Rs.42,00,889/- for AY 2018-19. In this regard, it is noted that the assessee while filling up the RoI/ITR has omitted to fill up the relevant column in the RoI about it having registration u/s.12AA of the Act, but is noted to have shown under the sub-heading details of the projects/institution run by the assessee that its nature of activity is declared as charitable; and has filled in the date of registration(i.e.
sec.12A) as well as the registration No. granted by the Director of Income Tax (Exemption) on 15.07.2009; and that it was claiming exemption u/s.11 of the Act but omitted to write down section under which it was registered i.e. Sec.12AA. Therefore, the exemption claimed u/s.11 of the Act was denied to the assessee to the tune of Rs.42,00,889/-. In this regard, it was brought to our notice that while filling up the RoI/ITR electronically inadvertently it was omitted to fill up the section under which it was registered i.e. sec.12AA of the Act. The assessee has filed Paper Book which shows the assessee trust is enjoying registration u/s.12AA of the Act from 15.07.2009 vide order of the Director of Income Tax (Exemption), Chennai, No. DIT(E)2/1375/08/09.
In such a scenario, merely because assessee omitted to write down section 12AA in Column-I, the exemption can’t be denied, when admittedly the assessee filled up all other columns for claiming exemption u/s.11 of the Act. Therefore, we are of the view that exemption ought not to have been denied to the assessee on technicalities when the CPC noted that assessee has claimed exemption u/s.11 of the Act, it is implied that assessee is registered u/s.12A of the Act since assessee has furnished the details of registration as noted (supra). In such a scenario, the CPC ought to have issued notice to assessee and called for clarification which would have avoided unnecessary litigation. It is admitted that in the subsequent AY 2019-20, the CPC has granted exemption u/s.11 of the Act. Therefore, in the overall facts of the case, exemption claimed by the assessee ought to have been allowed.
In the light of the discussion supra, we set aside the impugned order of the Ld.CIT(A) and restore the issue back to the file of the JAO for limited purpose with a direction to verify the registration u/s.12AA of the Act and if it is found to be correct, then to grant exemption u/s 11 of the Act which was denied by intimation order of CPC u/s.143(1) of the Act.
In the result, appeal filed by the assessee is allowed for statistical purposes.