LIONS NAB COMMUNITY EYECARE CENTRE, MIRAJ,SANGLI vs. DEPUTY COMMISSIONER OF INCOME-TAX, CPC, BANGALORE

This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre, Delhi (‘NFAC’) dated 21.03.2022 for the assessment year 2012-13.

Briefly, the facts of the case are that the appellant is a charitable trust incorporated under the provisions of Trust Act. It is claimed that it was registered u/s 12A of the Income Tax Act, 1961 (‘the Act’). The Return of Income for the assessment year 2012-13 Form No.5 declaring total income of Rs.43,01,860/-. Against the said return of income, an intimation was issued u/s 143(1)(a) of the Act on 26.03.2014 assessing the above income to tax and demanded tax of Rs.16,96,480/-. Against the said intimation, a petition u/s 154 was filed stating that the income of the trust is exempt u/s 11 by virtue of registration u/s 12A of the Act. It was further stated that the return of income was filed in wrong form i.e. Form No.5 as against the ITR Form No.7. However, the said petition was rejected by the Assessing Officer by holding that the appellant had failed to file the audit report in Form No.10B as required under Rule 17B of the Income Tax Rules, 1962. 3. Being aggrieved by the order passed u/s 154, an appeal was filed before the NFAC who vide impugned order confirmed the action of the Assessing Officer. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. It is submitted before us that filing of the audit report in Form No.10B is only directory and failure to file of audit report in Form No.10B does not disentitle the assessee to claim for exemption u/s 11 of the Act. Therefore, ld. AR prayed that the order passed u/s 154 be quashed. 6. On the other hand, ld. Sr. DR placed reliance on the orders of the lower authorities. 7. We heard the rival submissions and perused the material on record. We find that the appellant had filed the return of income in Form No.5. However, no documents were filed along with the return of income justifying the claim for exemption u/s 11 of the Act. It is only after receipt of intimation, the appellant took a plea that its income was exempt u/s 11 by virtue of registration u/s 12A of the Act. Even the audit report was admittedly not filed along with the petition u/s 154 or before the NFAC. The CPC while processing the return of income u/s 143(1) can take into consideration only the return of income an accompanied document, when the appellant had filed the return of income in Form No.5, the natural inference to be drawn is that the assessee is a partnership firm. When the return was filed as if it is a firm, it follows that computation of tax liability should be made on the basis that it is a partnership firm. The CPC cannot go beyond the return of income. In the circumstances, we are of the considered opinion that the