INCOME TAX OFFICER, EXEMPTIONS WARD, AURANGABAD, AURANGABAD vs. SAVITRIBAIPHULE SHIKSHAN PRASARAK MANDAL, BEED

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ITA 2384/PUN/2024Status: DisposedITAT Pune17 January 2025AY 2019-20Bench: DR.MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)1 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee had submitted an Audit Report in Form 10B, which was certified by a Chartered Accountant. Considering the assessee's registration u/s.12AA and fulfillment of criteria for exemption u/s.11 and 12, denial of exemption was not justified.

What were the facts?

The assessee, a trust running educational institutions, filed a Nil income return for AY 2019-20, which was revised. The CPC rejected the exemption claim u/s.10(23C) for want of a Form 10BB audit report. The assessee's rectification petition was also rejected.

What were the issues?

Whether the AO was justified in rejecting the assessee's claim for exemption u/s. 10(23C) for not furnishing Form 10BB, despite having submitted Form 10B and fulfilling conditions for exemption u/s. 11 and 12.

Which sections of the Income-tax Act were involved?

Section 10(23C),Section 139(5),Section 143(1),Section 154,Section 10B,Section 16CC,Section 11,Section 12,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Respondent: Shri Arvind Desai
Hearing: 08.01.2025Pronounced: 17.01.2025

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

This appeal filed by the Revenue pertaining to the Assessment Year 2019-20 is directed against the order dated 03.10.2024 passed by the National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax act, 1961 (in short ‘the Act’) which inturn is arising out of the Rectification order u/s.154 of the Act.

2.

Tersely, facts of the case are that the assessee is a trust running the educational institutions which furnished Nil income in the return of income filed for the A.Y. 2019-10. The said return was subsequently revised u/s.139(5) of the Act on 30.08.2019. The CPC vide its order u/s.143(1) processed the return rejecting the claim made by the assessee u/s.10(23C) of the Act at Rs.4,85,92,788/-. Being aggrieved by the intimation order denying the said claim, the assessee filed the rectification application u/s.154 of the Act but the assessee failed to succeed on the ground that the assessee has not furnished the Audit report in Form No.10BB within the stipulated time in Rule 16CC of the Income Tax Rules, 1962.

3.

Dissatisfied assessee carried the matter before the ld.CIT(A) and the ld.CIT(A) allowed the exemption claimed by the assessee u/s.11 and 12 of the Act by observing as under :

“5. Observation and Decision: In Ground Nos. 1 and 2, the Appellant has contested the order u/s 154 of the IT act, 1961 dated 30-03-2023 for the A.Y. 2019-20 of the AO of rejecting the claim of exemption u/s 11 and 12 of the Act. Both these grounds are taken up together for the sake of convenience. I have carefully considered the submissions made by the Appellant. It is observed that the Appellant filed ROI for the A.Y. under consideration on 27-08-2019. The Appellant filed Revised Return on 30-08-2019. Vide order u/s 143(1), the claim of exemption of the Appellant to the extent of Rs 4,85,92,788/- was rejected by the AO. The Appellant filed rectification petition u/s 154 but the petition was rejected by the AO vide order u/s 154 dated 30-03-2023. The AO rejected the claim by holding that the Appellant has given the details of registration u/s 10(23c)(vi) details of registration u/s 10(23c) (vi) and therefore the Appellant was required to submit the Audit Report in Form 10BB. It is observed that the Appellant had submitted Audit Report in Form 10B duty certified by a Chartered Accountant. It is also further observed that the Appellant is also registered u/s.12AA vide registration No. PN/CIT/(Exempt)/TECH/12AA /A'bad/RG1153 /313/2016-17/1007 dated 25-04-2016. It is further observed that receipts and expenditures made for charitable purpose indicates that the expenditure is more than 85% of the total receipts on the aims and objectives of the trust and the amount set apart for charitable purpose does not exceed 15% of the total receipts. Therefore, it can be concluded that by virtue of registration u/s.12AA also, the Appellant is entitled to a claim of exemption u/s. 11 and 12 as all the criteria have been satisfactorily fulfilled by Appellant trust. Denial of exemption would be unfair and against the principles of natural Justice and equity. In view of the above, the AO was not justified in denying the claim of exemption and the AO is hereby directed to allow the claim of exemption u/s.11 & 12 of the Act. These grounds are allowed.

4.

Now the Revenue is in appeal before the Tribunal contending that filing of Audit Report in Form 10BB as per 10th proviso to section 10(23C) of the Act is mandatory and the ld. CIT(A) erred in granting exemption u/s.11 of the Act by accepting the Form No.10B.

5.

When the appeal was called for, none appeared on behalf of the respondent assessee despite due service of notice of hearing. We therefore dispose of the appeal with the able assistance from the ld. Departmental Representative exparte the respondent assessee.

6.

We have heard the ld. Departmental Representative and perused the record placed before us. The sole issue in controversy is that the assessee furnished the Audit Report in Form 10B certified by the Chartered Accountant instead of Form 10BB. We find the CPC rejected the claim made by the assessee u/s.10(23C) of the Act only on technical issue, which is uncalled for. The ld.CIT(A) has rightly considered all the aspects viz, registration u/s.12A and application of income for the charitable purposes while granting exemption u/s.11 of the Act. We therefore find that the order passed by the ld.CIT(A) is in conformity with the principles of natural justice. We therefore uphold the same and dismiss the grounds raised by the Revenue.

7.

In the result, the appeal of the Revenue is dismissed. Order pronounced on this 17th day of January, 2025.

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