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Facts
The assessee claimed exemption under Section 11 of the Income Tax Act, 1961. The CPC denied the claim for not filing the return of income within the due date, which was confirmed by the first appellate authority. The assessee filed the return late and prayed for consideration of eligible expenditure.
Held
The Tribunal noted that the assessee conceded not being entitled to exemption under Section 11 due to late filing. The Tribunal held that the matter should be remanded to the CIT(A) to reconsider the delay condonation petition and adjudicate on merits regarding eligible expenditure.
Key Issues
Whether the assessee is entitled to claim exemption under Section 11 despite late filing of the return, and if not, whether eligible expenditure should be considered.
Sections Cited
11, 139(1), 143(1)
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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
Janaki Thangam Educational Trust, Vs. The Income Tax Officer, Plot No. 9, Santhanasrinivasa Perumal Exemptions Ward (3), Koil Street, TNHB Special Scheme, Chennai. Mogappair West, Chennai 600 037. [PAN: AAATJ5734C] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri S. Sundar Raman, CA ��थ� की ओर से/Respondent by : Ms. Gauthami Manivasagam, JCIT सुनवाई की तारीख/ Date of hearing : 03.04.2025 घोषणा की तारीख /Date of Pronouncement : 09.04.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 09.01.2025 passed by the Addl/JCIT(A)-7, Mumbai for the assessment year 2020-21.
The ld. AR Shri S. Sundar Raman, CA prayed to take-up appeal for hearing and adjudication first and with the consent of both the parties, we proceed to hear the appeal first.
& S.A. No.36/Chny/25 3. At the outset, we note that the assessee claimed exemption under section 11 of the Income Tax Act, 1961 [“Act” in short]. The CPC, Bengaluru, vide intimation order under section 143(1) of the Act dated 30.11.2021, denied the said claim for not filing return of income within due date under section 139(1) of the Act, which was confirmed by the first appellate authority.
The ld. AR submits that the assessee filed its return of income on 31.03.2021 under section 139(1) of the Act as against the due date of 15.02.2021 [being extended due date]. The ld. AR fairly conceded that the assessee is not entitled to claim exemption under section 11 of the Act as the return was not filed within the due date as prescribed by the law. Therefore, we hold that the assessee is not entitled to claim exemption under section 11 of the Act.
The ld. AR further submits that the CPC added entire receipt to the total income of the assessee being chargeable to tax without giving any benefit to expenditure incurred by the assessee. The ld. AR placed on record the expenditure statement and prayed to consider atleast eligible expenditure. Further, he submits that the assessee filed an appeal before the ld. CIT(A) against the intimation order dated & S.A. No.36/Chny/25 30.11.2021 passed under section 143(1) of the Act with a delay of 754 days. The ld. AR drew our attention to para 6 of the impugned order and submits that the matter may be remanded to the file of the ld. CIT(A) with a direction to consider the delay condonation petition and to adjudicate the issue on merits in giving benefit to the eligible expenditure incurred by the assessee.
The ld. DR Ms. Gauthami Manivasagam, JCIT submits that the assessee did not show any reasonable cause in explaining the reasons for abnormal delay of 754 days. The assessee is not entitled to seek remand of matter to the file of the ld. CIT(A) as there was no justification in explaining delay. She submits that the order of the ld. CIT(A) with regard to the delay condonation petition is reasonable and pleaded to uphold the same.
Having heard both the parties and on perusal of the record, we note that the ld. AR has fairly conceded that the assessee is not entitled to claim exemption under section 11 of the Act. The only prayer made by the ld. AR is to consider atleast allowable expenditure as per expenditure statement placed on record in determining the total income chargeable to tax. Admittedly, the CPC, Bengaluru, vide intimation & S.A. No.36/Chny/25 added the entire receipt chargeable to tax without any benefit of expenditure to that extent. Therefore, we find force in the arguments of the ld. AR that the assessee should be given the benefit to eligible expenditure, which were not considered by the CPC. We note that there was no occasion for the first appellate authority to consider the case on merits as the appeal was dismissed in limine for not showing sufficient cause for the delay. Therefore, considering the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to reconsider the condonation petition for the delay of 754 days in filing the appeal subject to the condition of payment of ₹.25,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the ld. CIT(A) shall satisfy the payment of cost and decide the issue on merits in giving benefit to the allowable expenditure as reflected in the expenditure statement. Thus, the ground raised by the assessee is partly allowed for statistical purposes.
The Stay Application filed by the assessee in S.A. No. 36/Chny/2025, was also heard along with the main appeal. Since we have adjudicated the main appeal and remanded the matter to the file & S.A. No.36/Chny/25 of the ld. CIT(A) to adjudicate the issue on merits, the stay petition filed by the assessee become infructuous and accordingly, the same stands dismissed.
In the result, the stay application filed by the assessee is dismissed and the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced on 09th April, 2025 at Chennai.