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Facts
The Revenue filed an appeal against the order of the CIT(A) which had vacated the disallowance of the assessee's claim for exemption under Section 11. The assessee trust had claimed exemption under Section 11 after filing its return of income. The Assessing Officer had denied the exemption due to non-filing of the audit report in Form 10B and lack of registration under Section 12AB.
Held
The Tribunal held that the appeal filed by the Revenue was not maintainable as the 'tax effect' involved was below the monetary ceiling prescribed by CBDT Circular No. 09/2024. The Tribunal dismissed the appeal on this ground.
Key Issues
Whether the appeal filed by the Revenue is maintainable given the 'tax effect' being below the prescribed monetary limit as per CBDT Circular 09/2024?
Sections Cited
143(1), 11, 12A, 12AB, 10B, 139(1), 12A(1)(b), 12A(1)(ac)(i), 12A(2)
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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
करदाता का प्रतततितित्व/ : Shri K. A. Sai Prasad, C.A. Assessee Represented by राजस्व का प्रतततितित्व/ : Ms. Reema Yadav, Sr.DR Department Represented by सुिवाई समाप्त होिे की ततति/ : 30.04.2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 06.05.2025 Date of Pronouncement O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.
The present appeal filed by the Revenue is directed against the order passed by the Addl/JCIT (A)-1, Mumbai, dated 2 18.10.2024 which in turn arises from the intimation issued by the CPC, Bangalore u/s 143(1) of the Act. The Revenue has assailed the impugned order on the following grounds of appeal before us:
“1. The Ld. Addl.CIT(A) erred in law and ignored the fact that the Act provided a facility to the assessee to file Form-10B(Audit Report) belatedly, but such delay in filing Form-10B can only be condoned by the CIT(Exemptions) and not by CIT(A)/Addl.CIT(A).
2. The Ld. Addl.CIT(A) erred in law and ignored the fact that the assessee has to file Form-10B(Audit Report) one month prior to the due date for furnishing the return of income u/s.139(1) of IT Act, 1961, which is specified as mandatory in the Act under the provisions of section 12A(1)(b) of the Income Tax Act, 1961.
The Ld. Addl.CIT(A) erred in law by holding that the expenditure claimed by the assessee u/s 11 of the Act is correct in the absence/non-filing of Audit Report in Form-10B within the stipulated time.”
As the present appeal involves a delay of 36 days, therefore, the Revenue has filed an application dated 03.02.2025 seeking condonation of the same along with a supporting affidavit. On a perusal of the aforesaid application, it transpires that the delay involved in the appeal is stated to have crept in due to certain administrative constraints and other system related issues in the ITBA. It is stated that as the delay in filing of the present appeal had occasioned not for any malafide reasons, but for certain reasons which were beyond the control of the appellant/revenue, therefore, the same in all fairness be condoned.
3 3. Considering the aforesaid facts, we are of the view that as the delay involved in the present appeal is not inordinate and there are bonafide reasons explaining the same, therefore, the same merits to be condoned.
Succinctly stated, the assessee trust had filed its return of income for A.Y 2022-23 on 21.10.2022 declaring an income of Rs. Nil after claiming deduction u/s 11 of the Act.
As the assessee trust had not filed its Audit Report in Form 10B and was not registered u/s 12AB of the Act for the subject year, therefore, the A.O. proposed an adjustment u/s 143(1)(a) of the Act seeking disallowance of its claim for exemption u/s 11 of the Act. Although, the assessee trust had filed its response to the seeking of the withdrawal of its claim for exemption u/s 11 of the Act, but the A.O vide his intimation issued u/s 143(1) of the Act, dated 13.04.2023, declined the same and brought the entire amount of its gross receipts to tax and determined its income at Rs.10,88,590/-.
Aggrieved the assessee trust carried the matter in appeal before the CIT(A), who finding favor with the contentions vacated the 4 declining of its claim for exemption u/s 11 of the Act, observing as under:
-left intentionally- 5 6 7. The Revenue being aggrieved with the order of CIT(A), has carried the matter in appeal before us.
The Ld. Authorized Representative (for short “ld.AR”) for the assessee trust, at the threshold of hearing of the appeal, submitted that as the “tax effect” involved in the present appeal filed by the revenue is below the prescribed monetary ceiling contemplated in the CBDT Circular No.09/2024 (F.279/Misc./M074/2024-ITJ), dated 17/09/2024, therefore, the same is not maintainable and is liable to be dismissed on the said count itself.
Per contra, Ms. Reema Yadav, the learned Senior Departmental Representative (for short “the ld. DR”) fairly admitted that as the “tax effect” involved in the present appeal was below the monetary ceiling limit contemplated in the CBDT Circular No. 09/2024 7 (supra), therefore, the appeal filed by the Revenue was not maintainable.
Considering the fact that the “tax effect” involved in the present appeal filed by the revenue is below the prescribed monetary ceiling of Rs. 60 lac provided in the CBDT Circular No. 09/2024 (supra), we dismiss the same as not maintainable. Before parting, we may herein observe that in case, if the appeal filed by the Revenue is found to be covered by any of the exceptions carved out as regards the applicability of the aforesaid CBDT Circular No. 09/2024 (supra), then the revenue will be at liberty to seek restoration of the same.
Resultantly, the appeal filed by the Revenue is dismissed as not maintainable in terms of our aforesaid observations.
Order pronounced in the Open Court on 6th May, 2025. (मंजूनाथ जी) (श्री रवीश सूद) (MANJUNATHA G.) (RAVISH SOOD) लेखा सदस्य/ACCOUNTANT MEMBER न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated .05.2025. TYNM/sps