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Facts
The assessee filed a return of income for AY 2022-23 declaring Nil income after claiming exemptions. The CPC adjusted the income by Rs. 9,96,051, disallowing exemptions u/s 11 and 12 due to delayed filing of Form 10B. The CIT(E) dismissed the assessee's appeal.
Held
The Tribunal held that the delay in filing Form 10B is a procedural irregularity and not a mandatory condition, citing previous pronouncements. The Tribunal restored the matter to the CIT(E) for fresh consideration.
Key Issues
Whether the delay in filing of Form 10B can be condoned and exemption u/s 11 and 12 be allowed.
Sections Cited
11, 12, 143(1), 12A(1)(ac)(ii)
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Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeal)-Addl. /JCIT(A)-8, Mumbai (hereinafter referred to as the Ld. CIT(A)] dated 10.10.2024 for AY 2022-23.
Assessment Year: 2022-23 Lalpur Uttarayan 2. Brief facts of the case of the assessee is that the assessee filed return of income for AY 2022-23 declaring total income Nil after claiming exemption u/s 11 and 12 of the Act. The CPC, Bengaluru has passed an intimation u/s 143(1) by adjusting Rs. 9,96,051/- to the total income of the assessee. The Ld. CIT(E) has dismissed the appeal of the assessee by holding that the assessee did not file form 10B within specified date, so, the CPC, Bengaluru has rightly disallowed the exemption u/s 11 and 12 of the Act.
3. Being aggrieved and dissatisfied the assessee preferred an appeal before us.
The Ld. A.R challenges the very impugned order thereby submitting that the Ld. CIT(E ) has erred in disallowing the exemption on the ground that Form 10B has not filed within specified date ignoring the settled law that delay in filing form 10B is a procedural in nature and not mandatory and that can be cured. The Ld. A.R has further drawn our attention on the various judicial pronouncements to this effect.
5. Contrary to that the Ld. D.R supports the impugned order.
Upon hearing the submission of the counsel of the respective parties, we have perused the order and find that the assessee has filed audit report u/s 10B on 31.10.2022 although the due date for filing of Form 10B was on 30.09.2022, exemption u/s 11 and 12 has been denied only on this ground that there is a delay in filing of form 10B. In this context, we have gone through the several judicial pronouncement passed by Co- ordinate Bench of Kolkata in the case of Manav Seva Trust vs. CIT(E ) in wherein it was held thus:
“The following written submissions have made by the appellant-trust for non-compliance of the notice/directions issued by the ld. CIT(E): “1. That the application for registration u/s 12A(1)(ac)(ii) of the Income Tax Act was filed on 31.03.2023 and the same was rejected by the Hon’ble Commissioner of Income Tax (Exemption), Kolkata vide an order dated on 25.08.2023.
That the time for filing of the appeal before the Tribunal expired on 23.10.2023.
That the Trust engaged the services of Mr Arindam Pal, an accountant, for the purpose of handling accounts and income tax matters of the trust.
Assessment Year: 2022-23 Lalpur Uttarayan 4. That Mr Arindam Pal was entrusted with the responsibility of ensuring the accurate preparation and timely submission of income tax returns and other income tax returns and other income tax compliances.
5. That the trust relied on Mr Arindam Pal to comply all requirements and obligations related to application of trust and assessment 6. That as we trusted Mr Arindam Pal, he was in full control of income tax login id and password and all compliance related matters.
7. That it came to our knowledge that there was negligence on the part of Mr Arindam Pal, which led to non-compliance during proceedings u/s 12A(1)ac) of the Income Tax Act, 1961 and that even the rejection of application of trust was not even communicated to us.
Only recently, when the said accountant left the Job and new accountant was appointed, we came to know that any compliance was not made by him at the time of assessment for application of registration and not filed the appeal before the Hon'ble ITAT.
Considering above circumstances, the delay in the present case as the circumstances were beyond the control of the assessee trust.”
Considering the above submissions, in our view, interests of justice will be well served if the appellant-trust is given an opportunity to present its case before the CIT(E). Therefore, the impugned order of the ld. CIT(E) is set aside and the matter is restored to the file of the CIT(E) decision afresh. Needless to say that the ld. CIT(E) will give proper opportunity to the appellant-trust to present its case.”
Keeping in view, the above judicial pronouncement and the facts of the case the appeal of the assessee is hereby remitted back to the file of Ld. CIT(E ) considering the form 10B and to pass an order in favour of the assessee as deem fit and proper in law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 26th May, 2025
Sd/- Sd/- (Sanjay Awasthi /संजय अव�थी) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 26th May, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Lalpur Uttarayan, Vill-lalpur, P.O. Daladali, District-Purulia, WB, Pin-723130 2. Respondent – ITO, Ward-2(1) (Exemption), Durgapur 3. Ld. CIT(A)- Addl./JCIT(A)-8, Mumbai 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)