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Facts
The assessee, Shree Nathkrupa Shikshan Prasarak Mandal, an educational trust, filed its Income Tax Return for A.Y. 2020-21 on 31.05.2021, which was within the time limit prescribed under Section 139(4) but after the due date under Section 139(1). The Central Processing Centre (CPC) denied the exemption claimed under Section 11, adding the gross receipts, which was upheld by the CIT(A), leading to the current appeal.
Held
The Income Tax Appellate Tribunal (ITAT) held that the assessee is eligible to claim exemption under Section 11 of the Income-tax Act, 1961, as the return of income was filed within the time limit stipulated under Section 139(4). This decision is supported by a CBDT circular dated 23.04.2019, the amended provisions of Section 12A(1)(ba), and previous coordinate bench decisions. The Tribunal set aside the CIT(A)'s finding and directed the assessing officer to allow the Section 11 benefit.
Key Issues
Whether exemption under Section 11 is allowable when the Income Tax Return is filed within the extended due date under Section 139(4) but after the original due date under Section 139(1) of the Income-tax Act, 1961.
Sections Cited
11, 12A, 12A(1)(ba), 139(1), 139(4), 143(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, B BENCH,
Before: DR. MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- This appeal at the instance of assessee is directed against the order of Ld. CIT(A), NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 dated 20.06.2025 which is arising out of assessment order passed u/s 143(1) dated 19.02.2025 of the Act.
Assessee has raised following grounds of appeal:-
1. 1. 1. On the facts and in the circumstances of the case and in law, the learned CIT (A) not justified in confirming the denial of exemption u/s 11 of the Act by CPC.
2. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in holding that exemption u/s 11 is not allowed though the return of income has been furnished within the time
3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) not justified in taxing receipts ignoring the application of income /expenses made as only net surplus is taxable as income.
4. The appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal.
At the outset Ld. Counsel for the assessee submitted that since the assessee has furnished the return within the time limit prescribed u/s 139(4) of the Act the case of the assessee is squarely covered by the clarifications issued by the Central Board of Direct Taxes (CBDT) vide notification No. 173/193/2019-ITA-I, dated 23.04.2019. He also submitted that the case of the assessee is also covered by various decisions of co-ordinate Benches including Indian Medical Association Vs. DCIT Exemption Circle, Pune dated 30.09.2025, Moonank Welfare Society Vs. ITO dated 13.06.2024 and also in the case Adhar projects Welfare Society Vs. ITO Exemption, Kolhapur dated 25.06.2025.
On the other hand Ld. Departmental Representative (DR) relied on the decision of the ITAT, Pune Arya Kshatriya Samaj vs ITO, Kolhapur dated 23.03.2023.
We have heard rival contentions and perused the records placed before us. We observe that the assessee is a charitable organization working in the field of imparting education and runs an educational institute and mainly receiving income from Government grants. Return of income for A.Y. 2020- 21 has been filed on 31.05.2021 alongwith the Audit Report on Form 10B. Due date prescribed u/s 139(1) for the year under consideration is 15.02.2021 and u/s 139(4) is 31.05.2021. Admittedly the return of income of the assessee is filed belatedly u/s 139(4) of the Act. In the return assessee has claimed benefit u/s 11 on the gross receipts of Rs. 70,98,284/- and net income/profit during the year as per audited Profit and Loss account is Rs. 3,728/- The return has been processed by the CPC vide order dated 30.11.2021 and the gross receipts have been added in the accounts of assessee on account of delay in furnishing the return i.e. the return has not been filed within the due date prescribed u/s 139(1) of the Act.
We observe that the assessee in order to claim exemption u/s 11 of the Act needs to fulfill the conditions prescribed u/s 12A of the Act. One of the condition provided u/s 12A(1)(ba) of the Act is that the person in receipt of the income has to furnish the return of income for the previous year in accordance with the provisions of sub-section 4A of section 139 within the time allowed under that section. We further note that through the amendment by Finance Act w.e.f. 01.04.2023, sub-section 1 or sub-section 4 has been inserted in section 12A(1)(ba) of the Act. This means that post 01.04.2023 if an assessee has furnished the return u/s 139(1) or 139(4) then the condition prescribed u/s 12A(1)(ba) stands fulfilled.
We would also like to take note of the notification issued by CBDT on 23.04.2019 and the same is reproduced below:-
Now as per circular of CBDT dated 23.04.2019 as well as provisions of section 12A(1)(ba) of the Act we find that the assessee is allowed to claim benefit of exemption u/s 11 if the return of income is filed upto the due date prescribed under sub section 139(4) of the Act. The assessee has furnished the return on 31.05.2021 which is last date of filing the return for A.Y. 2020-21 u/s 139(4) of the Act. Therefore in our considered view the assessee’s claim as u/s 11 deserves to be allowed.
So far as the decisions referred by Ld. Departmental Representative (DR) in the case of Arya Samaj (Supra), we note that the said decision was rendered ex-parte quo assessee and the CBDT Circular dated 23.4.2019 referred (Supra) remained to be considered. Therefore this decision relied by Ld. Sr. DR is not applicable on the instant appeal.
Our finding that the assessee who has furnished the return u/s 139(4) of the Act for A.Y. 2020-21 is eligible for examination u/s 11 of the Act is further supported by the decision of this Tribunal in the case of Indian Medical Association (Supra) wherein also under similar facts of filing belated return, assessee’s claim u/s 11 of the Act has been allowed by this Tribunal.
We accordingly set aside the impugned finding of Ld. CIT(A) and allow the grounds of appeal raised by the assessee and direct the Ld. JAO to allow benefit of section 11 claimed by the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced on this 19th day of December, 2025.