KOKAN KALA & SHIKSHAN VIKAAS SANSTHA,NETARDE vs. ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CPC

ORDER PER G. D. PADMAHSHALI, AM; The order of first appellate authority [for short “FAA / NFAC”] passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”] confirming the denial of exemption claimed u/s 11 & 12 by the Deputy Commissioner of Income Tax, CPC, Bengaluru [for short “AO”] vide its order dt. 12/07/2019 passed u/s 143(1) of the Act, is challenged by the present appeal on the following grounds; ITAT-Pune Page 1 of 7

Ground no 2: Section 143(1) On the facts and circumstances prevailing in the case and as per the provisions of the Act, the disallowance of exemption u/s 11 of the Act on account of delay in furnishing the audit report electronically, is not permissible and notwithstanding that no additions on account of disallowances are to be made, even is such additions are to be made, it cannot be by way of intimation under section 143(1)(a) of the Act, as it is on account of debatable issue. The addition so made may kindly be deleted.

Ground no 3: Residuary Ground The appellant prays to be allowed to add, amend, modify, rectify, delete and raise any ground of appeal at the time of hearing.

ITAT-Pune Page 2 of 7

Kokan Kala Shikshan Vikaas Sanstha PAN: AACTK0913A 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 ITAT-Pune Page 3 of 7

Kokan Kala Shikshan Vikaas Sanstha PAN: AACTK0913A 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.

Kokan Kala Shikshan Vikaas Sanstha PAN: AACTK0913A 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 Form10B 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.

Kokan Kala Shikshan Vikaas Sanstha PAN: AACTK0913A 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.

Kokan Kala Shikshan Vikaas Sanstha PAN: AACTK0913A 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.