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Facts
The assessee, Saraswati Devi Educational and Social Trust, filed its returns of income claiming exemption under Section 11 of the Income Tax Act for AY 2020-21 and 2023-24. The AO, through CPC, denied the exemption by issuing intimations under Section 143(1) on the ground that Forms 10B/10BB were filed belatedly. The assessee also contended that no opportunity was provided under the proviso to Section 143(1)(a) before making the adjustment. The CIT(A) upheld the AO's decision.
Held
The Tribunal held that the belated filing of Form 10B/10BB is a technical/procedural breach that cannot lead to the denial of exemption, citing the Gujarat High Court decision in Sarvodaya Charitable Trust. Since the assessee is a charitable trust satisfying the exemption conditions, denial solely for delayed filing is not justified. Consequently, the intimations issued under Section 143(1) denying the benefit of Sections 11, 12, or 10(23C) were quashed.
Key Issues
Whether exemption under Sections 11, 12, or 10(23C) can be denied solely due to the belated filing of Forms 10B/10BB, and whether an opportunity under the proviso to Section 143(1)(a) is mandatory before such adjustments in an intimation.
Sections Cited
11, 12, 10(23C), 143(1), 143(1)(a), 139(1)
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Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY
O R D E R Per Rajesh Kumar, AM : These two appeals are filed by the assessee against the order passed by the ld. Addl./JCIT(A)-2, Ludhiana, both dated 06.03.2025, for the assessment years 2020-2021 & 2023-2024.
In both the appeals, the ld. AR submitted that the assessee is a trust and filed its return of income 7claiming exemption u/s.11 of the Act but the AO CPC rejected the said claim while processing and by passing order u/s 143(1) of the Act on the ground that the IT Return and Form 10B were filed belatedly.
Further the ld.AR submitted that the ld.AO before making adjustment in the intimation u/s.143(1) of the Act for both the years under consideration has not provided opportunity by sending intimation in terms of proviso to Section 143(1)(a) of the Act. Therefore, ld.AR submitted that the intimations issued by the for both the years under appeal deserved to be quashed.
3. On the other hand, ld.CIT-DR vehemently supported the orders of the lower authorities and submitted that the assessee was required to file Form 10B/10BB along with the return of income within the time prescribed under the Act, which has not been done by the assessee. Therefore, ld. CIT-DR submitted that the ld. CIT(A) has rightly rejected the claim of the assessee on account of late filing of Form 10B/10BB and prayed for upholding the same.
After hearing the rival contentions and perusing the material available on record, we find that the assessee has filed its return of income on 27.03.2021 for A.Y.2020-2021 and on 31.10.2023 for A.Y.2023-2024. The Form 10B and Form 10BB had been filed along with returns of income for the said assessment years under consideration on 27.03.2021 & 31.10.2023, respectively. The due date for furnishing Form 10B/10BB for the assessment year 2020-2021 & 2023-2024 was prior to one month before the due date for furnishing return u/s.139(1) of the Act. The intimations/orders u/s.143(1) of the Act had been issued for A.Y. on 24.12.2021 and for AY 2023-2024 on 04.12.2024. The CPC had denied the assessee the benefit of exemption u/s.11 & 10(23C) of the Act on the ground that the audit report in Form 10B/10BB had been filed belatedly. The ld CIT(A) dismissed the appeals of the assessee by observing that the in order claim exemption u/s 11 & 12 of the Act certain conditions are required to be satisfied which were not fulfilled by the assessee. It is noticed that the audit report was very much available with the Assessing Officer when the returns of income were processed and this is only a technical/procedural breach. The coordinate bench of the Tribunal has been holding that such technical lapse cannot lead to denial of exemption u/s.11 & 12 of the Act that too in the intimation u/s.143(1) of the Act. This view is also supported by the decision of the Hon’ble Gujarat High Court in the case of Sarvodaya Charitable Trust, reported in [2021] 125 taxmann.com 75 (Gujarat), wherein the Hon’ble High Court has held that exemption u/s.11 of the Act cannot be denied for delayed filing of Form 10B. It has also been held by the Hon’ble High Court that as the assessee is a charitable trust who satisfies the conditions for availing the benefit of exemption, the assessee could not be denied exemption merely on the ground that Form 10B was filed belatedly especially when legislature had conferred wide discretionary powers to condone such delay on authorities concerned. Consequently, respectfully following the decision of the Hon’ble Gujarat High Court, the intimations issued u./s.143(1) of the Act by the Assessing Officer and confirmed by the ld. CIT(A) denying the benefit of Section 11 & 12 of the Act for A.Y.2020-2021 on account of delay in filing Form 10B and denying the benefit of Sections 11 or 10(23C) of the Act on account of belated filing of Form 10BB for A.Y. 2023-2024, are hereby quashed.