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Facts
The assessee, a charitable trust, claimed exemption under Section 11 of the Income Tax Act, which was disallowed by the CPC in an intimation under Section 143(1) without assigning reasons or prior notice. The CIT(A) dismissed the assessee's appeal, stating that Form 10B was not filed within the prescribed time, although the return of income and Form 10B were filed shortly after the due dates.
Held
The Tribunal found that the assessee had filed the audit report (Form 10B) within the due date. It held that any addition made under Section 143(1)(a) without issuing a prior show-cause notice is bad in law and not sustainable. Relying on a precedent, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.
Key Issues
Whether disallowance of exemption under Section 11 in an intimation under Section 143(1) without a show-cause notice is valid, and whether Form 10B was filed within the due date.
Sections Cited
143(1), 11, 143(1)(a), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY
(नििाारण वर्ा / Assessment Year : 2018-2019) M/s Shree Maheshwari Vs ITO, Ward-1(3), Exemption, Vidyalaya, Kolkata 4, Maheswari Bhawan, Sovaram Bysack Street, Kolkata PAN No. :AACTS 8958 D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Sunil Surana, AR राजस्व की ओर से /Revenue by : Shri Sailen Samadder, Sr. DR सुनवाई की तारीख / Date of Hearing : 24/03/2025 घोषणा की तारीख/Date of Pronouncement : 21/04/2025 आदेश / O R D E R
Per Rajesh Kumar, AM :
This is an appeal filed by the assessee against the order dated 06/01/2025, passed by the ld. Addl./JCIT(A)-2, Hyderabad, for the assessment year 2018-2019.
The only issue raised in this appeal is against the action of ld. CIT(A) in confirming the disallowance made by the CPC, Bangalore of Rs.4,20,23,463/- in the intimation issued u/s.143(1) of the Act, which was claimed by the assessee as exempt u/s.11 of the Act.
Facts in brief are that the assessee filed return of income, which was processed u/s.143(1) of the Act vide order dated 21.11.2019 by the DCIT, CPC. In the said intimation, exemption of Rs.4,20,23,463/- claimed by the assessee in terms of Section 11(1) of the Act was disallowed on the ground for which no reasons were assigned in the intimation and no prior intimation was given to the assessee for making such adjustments u/s.143(1)(a) of the Act. The assessee is a registered charitable trust registered u/s.12A of the Act vide order dated 22.05.2002. In the impugned assessment order, the due date of filing of the return was 30.09.2018 and accordingly audit report in Form No.10B was due on 31.08.2018, however, the return of income was filed on 30.09.2018 and Form 10B was filed on 03.10.2018. In the appellate proceedings, the ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee has not filed Form 10B within the time as prescribed under the Act.
After hearing the rival submissions of the parties and perusing the material available on record, we find that the assessee has filed the audit report within the due date i.e. on 15.10.2018 and there is no delay in filing Form 10B. Moreover, we note that before making addition u/s.143(1)(a) of the Act, the assessee was not given any show cause , which is mandatory under the Act. Therefore, the intimation passed u/s.143(1) of the Act dated 17.10.2019 is not sustainable in the eyes of law. Our view is supported by the decision of the coordinate bench of the Tribunal in the case of M/s Radha Krishna Mandir Trust Vs. The ITO(Exemption), passed in order dated 12.03.2025, wherein the coordinate bench of the Tribunal has held that addition made in the intimation passed u/s 143(1)(a) of the Act without giving prior show cause notice to the assessee is bad in law and has to be quashed.
5. We, respectfully following the decision of the Tribunal, which has been rendered under the similar facts and circumstances, set aside the order of the ld.CIT(A) and direct the AO to delete the addition made u/s.143(1) of the Act. Thus, appeal of the assessee is allowed.