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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI MANISH BORAD
Assessment Year : 2019-20 Jeevprabha Charitable Trust, Vs. ITO, Ward-1(1), Pune. S.No.55/2/2, Ganeshkind Road, Pune- 411007. PAN : AAATJ5126A Appellant Respondent Assessee by : None Revenue by : Shri Sanjay Dhivare Date of hearing : 04.02.2025 Date of pronouncement : 12.02.2025 आदेश / ORDER
PER MANISH BORAD, AM:
This appeal filed at the instance of assessee is directed against the order of Ld. Addl./JCIT(A)-2, Gurugram [‘Ld. CIT(A)’] dated 28.06.2024 which is arising out of an intimation dated 11.05.2020 for Assessment Year 2019-20 issued by the ADIT, CPC, Bangalore.
The assessee has raised the following grounds of appeal :-
1. The learned CIT(A), NFAC erred in law and on facts in confirming the addition of Rs. 23,97,758/- made by the learned AO to the taxable income of the appellant, instead of declared income of Rs.1,13,780/-.
2. Appellant trust contends that Form 10B has been filed and as such all the compliances were ensured by the appellant trust and therefore eligible for exemption u/s 11 of the ITA, 1961.
3. Appellant trust contends that non filing / delay in filing Form No. 10B is merely a technical default and is curable as held by Kokan Kala Shikshan Vikas Sanstha V. DCIT, CPC (ITA No. 645/PUN/2022) and various High Courts.
4. The learned AO computed appellant's income of Rs. 25,11,539/- without granting deduction for genuine and bonafide expenses incurred for the object of the trust amounting to Rs. 20,21,027/-. As such, the learned CIT(A) erred in confirming the same and thereby failed to appreciate that taxing of gross receipts of the appellant (instead of the net income) is not permissible under the income-tax law.
5. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal
.”
3. When the case was called, none appeared on behalf of the assessee. Even on last date of hearing fixed on 12.12.2024 none appeared. However, the assessee filed a detailed paper book containing various documents and also gist of case laws. Therefore, I proceed to adjudicate the appeal with the able assistance of Ld. Departmental Representative and available records.
4. Ld. Departmental Representative stated that the Assessing Officer/CPC had been denied benefit of exemption u/s 11 of the Act on account of delay in filing of audit report in Form 10B and that being a condition of denying of exemption u/s 11 of the Act, Ld. CIT(A) has rightly confirmed the action of the Assessing Officer/CPC.
5. I have heard Ld. Departmental Representative and perused records placed before me. I observe that the assessee is a charitable Assessment Year 2019-20 on 24.09.2019. The assessee is required to get accounts audited and filed audit report in Form 10B. However, the audit report in Form 10B was uploaded on 30.01.2023 which is delayed. Gross receipts of the assessee trust are Rs.25,11,539/- and expenditure incurred during the year are Rs.20,21,027/-. However, the CPC while processing the return on 11.05.2020 denied the benefit of exemption u/s 11 of the Act on account of non-filing of audit report in Form 10B and treated the gross receipts of Rs.25,11,539/- as income. Before me, the assessee through its grounds and paper book has made two fold contentions. Firstly, even though audit report was filing belatedly, UDIN Number was generated on 24.09.2019 itself but due to some technical glitches audit report could not upload at that point of time. It was also stated that when the matter was pending before Ld. CIT(A), audit report was uploaded and Ld. CIT(A) ought to have taken cognizance of the same and allowed the exemption u/s 11 of the Act. Reference has been made to the plethora of decisions where it has been consistently held that filing of audit report is directory in nature and even if when the audit report was available before the appellate authority, he ought to have taken note of the same and allowed the 11 of the Act. The second fold of contentions, without prejudice to the above contention, is that only the net income should have been subjected to tax and not the gross receipts.
6. I have gone through the paper book at page no.29 and find that the assessee has generated the UDIN Number of the audit report in filing of Form 10B which provides the detail of the auditor, namely, Bipin Manikchand Vora, Membership No.046221. It shows that the audit procedure has been completed and audit report was ready for being uploaded. Thereafter, as claimed that due to technical difficulties, auditor could not upload the Form 10B but the return has been filed within stipulated time limit and the details mentioned in the income tax return are the same as appearing in the audit report in Form 10B. It is also observed that the finally audit report in Form 10B uploaded on 30.01.2023 and it contains the description of same Chartered Accountant being Membership No.046221 and it was very much available on the income tax portal during the course of first appellate proceedings and copy of audit report was made available to Ld. CIT(A). Under these given facts and circumstances, I find that there are plethora of decisions favouring the assessee on this issue. I however like to reproduce the findings of this Tribunal in the case of Kokan Kala Shikshan Vikaas Sanstha Vs. DCIT, CPC, Bengaluru vide dated 30.12.2022 where dealing with the same issue stands held as under :- “2. Concisely stated facts borne out of the case records are; 2.1 The appellant assessee is a Trust engaged in charitable activities in the field of education, cultural, social, medical relief and woman empowerment etc., and registered u/s 12AA of the Act, had for assessment year 2018-19 [for short “AY”] filed its return of income [for short “ITR”] u/s 139(4D) on 13/07/2018 declaring total income at ₹3,30,680/- after a claim of exemption for ₹36,21,75/- from the voluntary contribution received ₹39,43,555/-. 2.2 The Ld. AO, after putting assessee to notice u/s 143(1)(a), the ITR was processed u/s 143(1) of the Act denying the claim of exemption for non-submission of audit report in Form 10B alongwith or before filing the ITR and determined the total income at ₹39,52,385/- . 2.3 Aggrieved by the denial of exemption, the assessee on one hand filed an appeal before Ld. FAA on 18/12/2020 and on the other hand filed rectification application u/s 154 of the Act on 27/08/2021 accompanying proof of filing of audit report in Form No 10B on 29/02/2020, however of no success, the appellate brought up the matter before the Tribunal for reversal of order of assessment on the grounds laid at para 1 hereinbefore.
During the course of hearing, the learned counsel for the assessee [for short “AR”] submitted that, the appellant failed to attend the notice 143(1)(a) on account of IT-website technical glitches, which could not allow the appellant to download the notice / communication and vouch the contents therefore and for the reasons it remained non- complied. In support of aforestated claim, the appellant adduced the copy of screenshot placed at “Annexure-7” which remained uncontroverted by the learned departmental representative [for short “DR”]. It is further argued that, the ultimate compliance of submission of audit report was brought to notice of Ld. FAA, who in-spite having co-terminus power with that of Ld. AO, has rejected to entertain the claim of exemption, which caused injustice to the appellant. Per contra the Ld. DR supported the order passed by both the tax authorities below [for short “TAB”] and contended that when the assessee failed to file Form 10B along with return of income, the assessee is not eligible for exemption u/s 11 of the Act as per the amendment in Finance Act, 2015 w.e.f. 01/04/2016.
We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of “ITAT Rules”, perused the material placed on record, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to either parties.
We note that, the ITR for the impugned AY was filed on 13/07/2018 and notice calling the audit report u/s 143(1)(a) was served on 28/02/2019 according thereby 30 days to remove deficiency by filing audit report in Form No 10B, however in the absence of any such compliance from the appellant, ITR was finally processed on 26/06/2019 denying the exemption, which the Ld. FAA upheld quoting equi-reasons. We also note that, the assessee could not attend the communication due to IT-Website technical glitches, however has eventually filed the audit report in Form No 10B on 29/02/2020 and complied with the condition laid in section 12A(1)(b) so as to entitle for a claim of exemption envisaged u/s 11 & 12 of the Act.
In the evince of details filed at clause M2 of ITR filed (Internal Page 4 of ITR) on 13/07/2018, it undisputedly establishes that the appellant got its books audited u/s 12A(1)(b) of the Act from M/s S. D. Pednekar & Co which issued & furnished the said audit report on 05/07/2017 i.e. prior to filing of ITR for the impugned AY, however the copy thereof remained to be filed alongwith ITR as well in response to communication u/s 143(1)(a) of the Act on account of technical glitches beyond the control of the assessee and the deficiency came to light only upon service of demand u/s 156 of the Act. Thus, the non-compliance with communication u/s 143(1)(a) of the Act due to IT Website technical glitches was unintentional and beyond the control of the appellant is sufficient to form a reasonable cause for non-compliance and since the procedural compliance has been duly made good by fling the audit report on record, we see no reason to deny the exemption in the present facts and circumstance, ergo we set-aside the order of both the tax authorities below and direct the Ld. AO to grant the claim of exemption in the evince of Form No 10B.”
On going through above findings of this Tribunal (supra), I find that the same is squarely applicable to the case of the assessee. Respectfully following the same, I hold that since the assessee has furnished income tax return in time and subsequently the audit report in Form 10B was filed, the UDIN Number of which was generated at the time of filing of return itself, therefore, I am