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Facts
The assessee, a charitable trust, filed its return of income on 29.12.2022. Due to technical glitches, Form 10B was filed late on 02.03.2023, despite being obtained on 14.09.2022. The assessee's application for rectification under Section 154 to include Form 10B was rejected, and the subsequent appeal to the CIT(A) was also dismissed.
Held
The Tribunal held that while Form 10B is mandatory, the assessee had taken steps to rectify the delay by invoking Section 154. The audit report was obtained before the return of income. Therefore, the Assessing Officer was directed to take Form 10B on record and rectify the order.
Key Issues
Whether the exemption under Section 11 of the Income Tax Act, 1961, can be denied solely on the ground of procedural delay in filing Form 10B, and if the delay can be condoned.
Sections Cited
11, 11(1)(a), 12A, 154, 234A, 234B, 234C, 234F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE
(Assessment Year: 2022-23) World Youth Heart Federation- Vs. CPC, Bangalore, India, Income Tax Officer 30, Grassfield, Sardar Patel Marg, (Exemption), Baroda Opp. Shashav School, Gotri, Sevasi Road, Sevasi, Vadodara-391101 [PAN No.AACCW6913D] (Appellant) .. (Respondent) Appellant by : Shri Himanshu Gandhi, A.R. Respondent by : Shri C Dharani Nath, Sr. D.R. 01.01.2025 Date of Hearing Date of Pronouncement 03.01.2025 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 27.09.2024 for A.Y. 2022- 23.
The grounds of appeal raised by the assessee are as under: 2.
“1. Ground 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in denied the exemption of Rs. 1584216 under section 11 of Income Tax Act, 1961.
Ground 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in denying the exemption of Rs. 1584216 under section 11 of Income Tax Act, 1961 on mere procedural delay in filling form 10B on 02.03.2023 i.e. after filling of return of income on 29.12.2022, even though the form 10B obtained on 14.09.2022 i.e. before filling the return of income.
Ground 3. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that Ld. CIT(A) has inherited power to condone the delay in filling Form 10B and this mistake is rectifiable under section 154 of Income Tax Act, 1961.
4. Ground 4. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in denying exemption of Rs. 14,08,696 claimed under section 11 of Income Tax Act, 1961 being expenses incurred for object of organization.
World Youth Heart Federation - India vs. ITO(E) Asst.Year–2022-23 - 2 - 5. Ground 5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in denying exemption of Rs. 1,75,520 being 15% of accumulated income under section 11(1)(a) of Income Tax Act, 1961 6. Ground 6. On the facts and circumstances of the case and law and without prejudice to ground no 1-5, the Ld. CIT(A) erred in not allowing the expenses against the receipt when the exemption of section 11 of Income Tax Act, 1961 was not granted 7. Ground 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming charging of Interest and fees under section 234A, 234B, 234C and 234F of Income Tax Act, 1961 8. Ground 8. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”
3. The assessee is a public charitable trust incorporated under Section 8 of Companies Act, 2015 being a non-profit organization. The assessee’s objects are to provide medical relief and duly approved under Section 12A of the Income Tax Act, 1961 and also registered under new provisions vide registration dated 27.05.2021 being trust working for charitable object of medical relief for last four years. The assessee filed its return of income on 29.12.2022 but due to the technical glitches on Income Tax portal could file Form 10B which was validated on 02.03.2023. The Form 10B in Audit Report was obtained on 14.09.2022 as submitted by the assessee. In fact, the assessee has filed application under Section 154 for rectification to place on record Form 10B subsequent to the filing of the return of income. But the same was not allowed vide order dated 25.08.2023.
Being aggrieved by the order dated 25.08.2023 passed under Section 154 of the Income Tax Act the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. A.R. submitted that due to technical glitches the assessee could not file the Audit Report dated 14.09.2022 and assessee tried to submit it on 02.03.2023 after taking cognizance of Section 154 but the same was not World Youth Heart Federation - India vs. ITO(E) Asst.Year–2022-23 - 3 - accepted. The Ld. A.R. requested that the same should be taken on record and the appeal of the assessee be allowed.
The Ld. D.R. submitted that the assessee has not filed Form 10B which is mandatory and therefore, the CIT(A) has rightly dismissed the appeal of the assessee and confirmed the denial of exemption under Section 11 of the Act.
Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee has submitted the Form 10B after invoking Section 154. Once the assessee was aware that due to the technical glitches the assessee could not upload the Form 10B along with return of income which was filed on 29.12.2022. The fact remains that the Audit Report was obtained prior to the submissions of the return of income (Audit Report dated 14.09.2022). Thus, the Assessing Officer is directed to take on record Form 10B and rectify the order accordingly. This direction is the factual centric to the present case and hence should not be taken as precedent.