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Facts
The assessee's appeal against an intimation under section 143(1) was dismissed by the CIT(A) due to limitation. The assessee had filed Form-10B electronically within the due date, but it was not considered by the department. The delay in filing the appeal was attributed to the medical condition of the society's treasurer.
Held
The Tribunal held that the Income Tax Department erred in not considering Form-10B while processing the assessee's income. The assessee had sufficient cause for the delay in filing the appeal due to medical reasons. Therefore, the matter was set aside to the Assessing Officer.
Key Issues
Whether the CIT(A) erred in dismissing the appeal on grounds of limitation without considering the medical reasons for the delay and whether Form-10B was correctly disregarded by the department.
Sections Cited
143(1), 249(2), 249(3), 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA
2018-19 against impugned appellate order dated 19/07/2024 (DIN & Order No.ITBA/APL/S/250/2024- 25/1066851429(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].
(B) In this case the assessee was issued intimation dated 04/03/2020 u/s 143(1) of the Income Tax Act, 1961 (“the Act” for short). The aforesaid intimation was issued by Income Tax Department, without considering Form-10B filed by the assessee electronically on 23/09/2018. The assessee’s appeal against the aforesaid intimation was dismissed by learned CIT(A) in limine without going into the merits of the case, on grounds of limitation. The learned CIT(A) did not condone the delay in filing of the appeal beyond time limit prescribed u/s 249(2) of the Act. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 19/07/2024 of learned CIT(A). The grounds of appeal are as under:
“1. The Ld Addl/JCIT (Appeal) Patna erred on facts and in law in dismissing the appeal solely due to the reason for not condoning the delay being medical reasons in filing the appeal without appreciating that there was a reasonable cause for delay.
The Ld Addl./JCIT (Appeal) Patna did not appreciate that Treasurer of the Society Sri Madan Mohan Rastogi, aged about %L years who is looking after the taxation matter and keeping e-profile password was suffering from severe Heart Problem and after severe COVID Infection also suffering from arthritics, depression and memory loss problem and is under medical treatment. Due to this reason, he did not open the e-profile and Assessee Society was not aware about the passing of Order send on e-profile.
That Ld. Lower Authorities including DCIT (C.P.C), Bangalore erred on facts and in law in wrongly holding that Tax Audit Report in Form 1 OB has not been e-filed, within due date. The Ld. CPC solely relied on this reason only and disallowed expenditure being utilization of fund as per section 11 of I.T Act and assessed at Income of Rs.33,87,763/- being Aggregate Income shown in the Income Tax Return. The Ld. CPC failed to understand that Audit Report in Form 10B has been duly E-Filed on 23.09.2018 vide acknowledgement No 302776101230918 enclosed as per Annexure A which is verifiable as per e-profile. Thus the disallowance of expenditure u/s 11 of I.T Act and assessing at income of Rs.33,87,763/- is contrary to the provisions of law, solely on wrong facts, against the principal of Natural Justice and is Invalid.
That there is a feeding mistake in the Return of Income at Schedule Part BTI column 4(i) amount applied during the previous year Rs.36,29,341/- has been written instead of correct amount Rs.33,58,500/-. Thus the mistake in feeding incorrect amount was unintentional and only due to oversight. Further in Form 10B Auditors has also stated correct amount Rs.33,58,500/- in column 1 of Report under the heading "Amount of income of previous year applied for Charitable Purpose in India". The correct amount Rs.33,58,500/- may kindly be considered as amount applied during the previous year.
That Ld. CPC due to incorrect amount in Schedule Part BTI column 4(i) amount applied during the previous year Rs.36,29,341/- has been written instead of correct amount Rs.33,58,500/- held that "In Schedule Part BTI the exemption claimed in SI no 4 is more than the amount of income offered in SI no 2 and SI No 5"and treated the expenditure Rs.0/- As per Computation u/s 143(1) of IT Act on the basis of notice stating "Variance on account of Proposed Adjustment" . Thus Assessing the income at Rs.33,87,763/- being Aggregate Income without allowing deduction of expenditure is contrary to the provisions of Law and is Invalid.
That notice for proposed adjustment u/s 143(1)(a) and order u/s 143(1) dated 04.03.2020 assessing income at Rs.33,87,763/- without allowing deduction for expenditure Rs.33,58,500/- sent through e-profile could not be known as the Treasurer of the society Shri Madan Mohan Ji aged about 79 years is handling taxation matter and aware about e-profile was suffering from severe heart problem and high blood pressure and memory loss and is confined to bed. Thus there was a reasonable cause being medical reason.
WITHOUT PREJUDICE TO ABOVE
The addition made are highly excessive, contrary to the facts, law and principal of natural justice and without providing
sufficient time and opportunity to have its say on the reasons relied upon.”
(C) At the time of hearing before us, the learned A.R. for the assessee submitted that the Income Tax Department failed to take Form-10B (which was filed by the assessee electronically on 23/09/2018 at 06:45:02 PM while processing the assessee’s return u/s 143(1) of the Act and issuing intimation dated 04/03/2020 u/s 143(1) of the Act. He further submitted that the assessee was prevented by sufficient cause from filing of appeal within the time limit prescribed u/s 249(2) of the Act and the learned CIT(A) should have exercised discretion in favour of the assessee to condone the delay u/s 249(3) of the Act as the delay was caused due to compelling medical reasons. In view of the foregoing he requested that the issue in dispute in the present appeal should be set aside to the file of the Assessing Officer with the direction to take Form-10B filed by the assessee on 23/09/2018 into consideration and to determine assessee’s income in accordance with law after providing reasonable opportunity to the assessee. The learned Sr. D.R. expressed no objection to this.
(D) Both sides have been heard. Materials on record have been perused. On perusal of records, it is found that the assessee had indeed filed Form- 10B electronically on 23/09/2018 within the time limit prescribed for filing of Form-10B. Therefore, Income Tax Department was in error, in not taking Form-10B into consideration while determining the assessee’s income u/s 143(1) of the Act. Therefore, the aforesaid intimation dated 04/03/2020 u/s 143(1) of the Act, which does not take Forn-10B filed by the assessee into consideration is also erroneous. Moreover, it is found that the assessee, as a result of compelling medical reasons, had sufficient reason for not filing the appeal in the office of the learned CIT(A) within the time limit prescribed u/s 249(2) of the Act. In view of the foregoing, and as representatives of both sides are in agreement on this, all the grounds of appeal are treated as disposed of in accordance with the aforesaid directions.
(E) In the result, the appeal of the assessee is partly allowed for statistical purposes.
(Order pronounced in the open court on 14/02/2025)