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Facts
The assessee, a trust, filed its return of income claiming exemption under Section 11(2) but failed to file Form-10 within the stipulated time due to the COVID-19 pandemic. The CPC denied the claim, and the CIT(A) upheld this denial, leading to the present appeal.
Held
The Tribunal held that due to the prevailing conditions of the COVID pandemic, the non-filing of Form-10 within the prescribed time should not be a ground to deny exemption. The delay in filing the form ought to have been condoned by the CIT(A).
Key Issues
Whether the denial of exemption under Section 11 due to delayed filing of Form-10, caused by the COVID-19 pandemic, is justified.
Sections Cited
11(2), 12A(b), 17(2), 143(1)
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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD
Before: SHRI K.NARASIMHA CHARY & SHRI MADHUSUDAN SAWDIA
आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 24/09/2024 passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”), in the The Educa�on Renaissance Trust case of The Educa�on Renaissance Trust (“the assessee”), assessee preferred this appeal.
Brief facts of the case are that the assessee is a trust engaged in impar�ng educa�on and filed the return of income for the assessment year 2020-21 on 29/12/2020, claiming certain income not to be included in the total income in terms of sec�on 11 (2) of the Income Tax Act, 1961 (for short “the Act”).
CPC, Bangalore, however denied such a claim and raised a demand of Rs. 78,42,280/-, for the reason that the assessee did not file Form- 10 within the �me permi�ed under sec�on 11(2) read with Rule 17(2) of the Act.
When the assessee preferred appeal, learned CIT(A) upheld the ac�on of CPC and denial of the claim made by the assessee on the very same grounds. Hence, this appeal.
Conten�on of the assessee before us is that is due to the COVID pandemic prevailing at the �me of filing of the return of income, though the assessee obtained the audit report under sec�on 12A(b) of the Act on 24/12/2020 itself and filed the return of income in terms thereof, could not file the Form-10 within the specified date, due to the then prevailing circumstances, lockdown and the availability of limited number of staff members. Learned Authorized Representa�ve (“learned AR”) submi�ed before us that the learned CIT(A) failed to appreciate the hardship of the assessee and upheld the denial of the claim by the CPC.
Learned Departmental Representa�ve (“learned DR”) placed heavy reliance on the orders of the authori�es below and submi�ed that the assessee filed Form-10 on 22/1/2022 whereas the processing under sec�on 143(1) of the Act took place by 24/12/2021 itself, and it goes without saying
Page 2 of 5 The Educa�on Renaissance Trust that as the date of processing of the return of income, Form-10 was not available on record. On this score, learned DR jus�fies the orders of the authori�es.
We have gone through the record in the light of the submissions made on either side. The fact remains that the return of income was processed on 24/12/2021, during the pandemic period. Impugned order clearly shows that Form-10 was filed along with appeal the appeal, but the learned CIT(A) looked at the non-compliance with respect to sec�on 11 (2) read with Rule 17(2) of the Act and declined to interfere with the denial of the claim made by the assessee under sec�on 11 of the Act.
There cannot be any denial of the fact that the Hon'ble Supreme Court in the Suo Motu proceedings in the case of M.A. No. 21/2022 in M.A. No. 665/2021 in SMW(C) No.3 of 2020 by order dated 10/01/2022 held that in cases, where the limita�on would have expired during the period between 15/03/2020 and 28/02/2022, notwithstanding the actual balance period of limita�on remaining, all persons shall have a limita�on period of 90 days from 01/03/2022, and in the event of actual balance period of limita�on remaining with effect from 01/03/2022 is greater than 90 days, that longer period shall apply.
Further, under similar circumstances the Coordinate Benches of the Tribunal took the view that it would be in the interest of jus�ce to exclude the period covered by the pandemic in filing of Form-10/10AA/10BB etc. Apart from this, learned AR cited that the view taken by the Hon’ble High Courts of Gujarat, Delhi and Bombay in the cases of Trust For Reaching The Unreached Through Trustee (2021) 126 Taxmann.com 77, Associated Chamber of Commerce and Industry of India (2024) 165 Taxmann.com 510 and Al Jamia Mahammediyah Educa�on Society (2024) 162 Taxmann.com 114 respec�vely in support of his conten�on that when the assessee substan�ally sa�sfies the Page 3 of 5 The Educa�on Renaissance Trust condi�on for availing the benefit of exemp�on as a trust, merely on bar of limita�on in furnishing the audit report in Form No. 10, the trust cannot be denied exemp�on under sec�on 11, in as much as the submission of the Form-10 is essen�ally a ma�er of procedure as opposed to being a mandatory condi�on which may be recognised to be forming part of substan�ve law. He further submi�ed that in such situa�on, the delay ought to have been condoned as it was due to the condi�ons beyond the control of the assessee, without any mala fide inten�on.
On a careful considera�on of the ma�er due to the prevailing condi�ons of the COVID pandemic, mere non-filing of Form-10 within �me, cannot be a ground to deny exemp�on to the assessee under sec�on 11 of the Act, and the learned CIT(A) ought to have condone the delay in filing such a Form when it was filed before him along with the appeal.
With this view of the ma�er, we set aside the impugned order to restore the issue to the file of the learned Assessing Officer to receive Form- 10 and to take a view on merits according to law. Grounds are answered accordingly.
In the result appeal of the assessee is allowed for sta�s�cal purpose. Order pronounced in the open court on the 17th January, 2025.