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Facts
The assessee filed its return of income for AY 2016-17 declaring NIL income, claiming exemption under Section 10(23C)(via) of the Income Tax Act. The assessee later corrected its claim to Section 11 and filed Form 10B and Form 10 belatedly. The Assessing Officer denied the benefit of Section 11 due to the late filing of Form 10B. The CIT(A) upheld the AO's order.
Held
The Tribunal noted that the CIT(Exemption) had condoned the delay in filing Form 10B. Since this order was not available to the AO at the time of passing the assessment order, the Tribunal set aside the assessment order and directed the AO to consider the condonation order and provide the assessee with an opportunity to present necessary details.
Key Issues
Whether the denial of exemption under Section 11 for belatedly filed Form 10B is justified when the delay has been condoned by the CIT(Exemption).
Sections Cited
250, 143(3), 10(23C), 11, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: MS.ASTHA CHANDRA & DR.DIPAK P. RIPOTE
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by Assessee against the order of ld.Addl./Joint Commissioner of Income Tax(Appeal),Panaji passed under section 250 of the Income Tax Act, 1961 for the A.Y.2016-17 dated 31.03.2025, emanating from order u/s.143(3)of the Income Tax Act, 1961, dated 24.12.2018. The Assessee has raised following grounds of appeal :
“1. That, on the facts and circumstances of the case, the order of the Ld. Appellate Authority in dismissing the appeal filed by the appellant is arbitrary, erroneous, contrary to law and is opposed to the principles of natural justice, equity and fair play
That, on the facts and circumstances of the case, the Ld. Appellate Authority has passed the order u/s 250 without giving sufficient opportunity of being heard and thus violating the principle of "audi alteram partem." 20
That, on the facts and circumstances of the case, the Ld. Appellate Authority has erred in confirming the income assessed by the Ld. AO to the tune of Rs. 24,74,235/- as against the nil return of income without appreciating the correct facts of the case
That, on the facts and circumstances of the case, the Ld. Appellate Authority has erred in confirming the disallowance of Rs. 18,98,761/- made by the Ld. AO merely on the basis that Form 10B was not filed within the prescribed time limit.
That, on the facts and circumstances of the case, the Ld. Appellate Authority has failed to appreciate the res judicata in this domain that exemption u/s 11 cannot be denied for mere non-filing of Form 10Bas filing of Form 10B is directory in nature and not mandatory in nature.
6. That, the Ld. Appellate Authority has misdirected himself in dismissing the appeal preferred by the appellant without appreciating the judgments passed by various Honourable Courts and Tribunals highlighting that rejection of claim of exemption u/s 11 of the IT Act for mere non filing of Form 10B is not justifiable since filing of Form 10B is directory in nature and the same cannot be a reason to deny benefit.
7. That, on the facts and circumstances of the case, the Ld. Appellate Authority while passing the impugned order u/s 250, has erred in not appreciating the fact that the disallowance of Rs. 5,53,839/- is due to expenses inadvertently claimed u/s 10(23C) (via) instead of claiming exemption u/s 11 of the IT Act and the same was purely unintentional
That, on the facts and circumstances of the case, the Ld. Appellate Authority while passing the impugned order u/s 250 has failed to appreciate that the Form 10B has been filed prior to completion of the assessment proceedings u/s 143(3) of the IT Act and the same was submitted during the course of assessment proceedings.
That, on the facts and circumstances of the case, the Ld. Appellate Authority has passed the impugned order u/s 250 in a mechanical way, without application of mind and without appreciating the overall facts and circumstances of the case.
That, the appellant may kindly be allowed to add, alter or modify any other modify any other points to the grounds of appeal at any time before or at the time of hearing.
That, the aforesaid grounds of appeal are without prejudice to each other.
Any other order in the interest of justice may kindly be passed.”
Submission of ld.AR : 2. The ld.AR for the Assessee filed a paper book. Ld.AR submitted that Assessing Officer has denied benefit of Section 11, because Assessee had filed Form No.10B beyond the time mentioned in the statute. Ld.AR further submitted that Assessee had applied for condonation before ld.CIT(Exemption) and ld.CIT(Exemption) vide his order dated 14.07.2022 has condoned the delay. Copy of the said order is at page 38 of the paper book.
2.1 Ld.AR therefore submitted that Assessee is eligible for benefit of Section 11 of the Act.
Submission of ld.DR: 3. The ld.DR for the Revenue relied on the order of the Assessing Officer & ld.CIT(A).
Findings & Analysis : 4. We have heard both the parties and perused the record placed before us. In this case, Assessee had filed original return of income for A.Y.2016-17 on 17.10.2016 declaring total income at Rs.NIL. The Assessee’s case was selected for scrutiny. The Assessing Officer noted that in the Income Tax Return, Assessee had claimed exemption u/s.10(23C)(via) of the Act. The Assessing Officer noted in the order that Assessee is not existing solely for Educational Purpose and Assessee is not approved by prescribed authority u/s.10(23C)(via) of the Act. The Assessee vide his letter dated 27.11.2018 submitted that Assessee had wrongly claimed exemption u/s.10(23C)(via) of the Act. Assessee further submitted that Assessee had filed Form No.10B and Form No.10 on 27.11.2018. Accordingly, Assessee claimed benefit of Section 11 of the Act. The Assessing Officer denied benefit of Section 11 as the Form No.10B and Form No.10 was not filed along with the Return of Income within the time allowed u/s.139(1) of the Act. Therefore, Assessing Officer denied the benefit of Section 11 to the Assessee. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(Appeal) who confirmed the assessment order.
5. Aggrieved by the order of the ld.CIT(A), assessee has filed appeal before this Tribunal.
We have perused the order dated 14.07.2022 of ld.CIT(Exemption) which is at page no.38-39 of the paper book. It is observed that ld.CIT(E) has condoned the delay in filing Form No.10B for A.Y.2016-17 subject to the conditions mentioned in the order. It is a fact that said order of the ld.CIT(E) was not available to the Assessing Officer when Assessing Officer passed the assessment order. Therefore, in the interest of justice, we set-aside the assessment order to the Assessing Officer. The Assessing Officer shall consider the condonation order of the ld.CIT(E). Assessing officer shall provide opportunity to the assessee. The Assessee shall file necessary details before the Assessing Officer. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 16 July, 2025.