KAMLA NEHRU PUBLIC SCHOOL SOCIETY,FARIDABAD vs. DCIT CPC, BANGLORE

PDF · subscribers
ITA 1223/DEL/2019Status: DisposedITAT Delhi31 October 2019AY 2016-173 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the denial of exemption was based on a technical error in filing the return form, not on substantive grounds. Since the assessee met the requirements for exemption under Section 10(23C)(iiiad), the exemption should be allowed.

What were the facts?

The assessee, a society running an educational institution, claimed exemption under Section 10(23C)(iiiad) of the Income-tax Act. The Assessing Officer denied this exemption and raised a tax liability, which was upheld by the CIT(A). The dispute arose because the assessee filed its return in the wrong form (Form No. 5 instead of Form No. 7).

What were the issues?

Whether the assessee is entitled to exemption under Section 10(23C)(iiiad) despite filing the return in an incorrect form. Whether a technical error in filing the return form should lead to denial of a substantively valid exemption claim.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 139(4C)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL

Before: SHRI G.S. PANNU

For Appellant: Shri Dinesh Kumar Aggarwal, CA
For Respondent: Ms. Ekta Vishnoi, Senior DR
Hearing: 24.09.2019Pronounced: 31.10.2019

ORDER ORDER ORDER ORDER

This appeal by the assessee is directed against the order of learned CIT(A), Faridabad dated 17th December, 2018 which in turn has arisen from the order of the Assessing Officer passed under Section 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) dated 19th June, 2017 for the assessment year 2016-17.

2.

In this appeal, although assessee has raised multiple grounds of appeal, but, essentially, the grievance emanates from the decision of CIT(A) in upholding action of the Assessing Officer in denying exemption to the assessee under Section 10(23C)(iiiad) of the Act in the intimation passed under Section 143(1) of the Act dated 19th June, 2017.

2 ITA-1223/Del/2019

3.

In order to appreciate the rival stands, the following discussion is relevant. The appellant before me is a Society registered under the Societies Registration Act, 1860 with the main objective of running educational institution. It has been explained that assessee is running an educational institution and it exists solely for educational purposes and not for purposes of profit. It has also been brought out that the aggregate annual receipt of the educational institution is `17,50,582/-, which is within the limit prescribed for the purposes of exemption under Section 10(23C)(iiiad) of the Act. Explaining the background of the dispute, the learned representative of the assessee pointed out that while filing the return of income, assessee had returned nil tax liability on the plea that the surplus on account of educational activities of `2,49,859/- was exempt from tax in view of Section 10(23C)(iiiad) of the Act. The Assessing Officer, while framing the intimation under Section 143(1) of the Act, instead, treated the aforesaid sum as taxable and accordingly, a tax liability of `96,280/- has been raised. The CIT(A) has also affirmed the aforesaid action.

4.

A perusal of the orders of authorities below reveal that the primary reason weighing with the lower authorities was that in the return of income filed, no specific claim for exemption has been made under Section 10(23C)(iiiad) of the Act. In this context, it is noticeable that the return of income was furnished by the assessee in Form No.5 instead of Form No.7, which was the correct Form in which the return of income ought to have been filed. In this context, the stand of the assessee has been that in view of Section 139(4C) of the Act read with Section 10(23C)(iiiad) of the Act and Rule 2BC of the Income-tax Rules, 1962, all the requirements of the exemption under Section 10(23C)(iiiad) stand fulfilled and the prescribed Form for filing the return of income was indeed Form No.7. Before the lower authorities as well as before me, it has been explained by the assessee that the PAN number allotted by the Department was in the status of an AOP

3 ITA-1223/Del/2019 and, as a consequence, the return was filed erroneously in Form No.5 although the correct Form was ITR 7. Since in Form No.5 there was no specific column in order to enumerate the claim of exemption under Section 10(23C)(iiiad), it could not be appropriately filled up. In the aforesaid factual matrix, the CIT(A) proceeded to deny the exemption on the ground that the same was not appropriately filled up in the return of income, which is merely a technical error. Substantively speaking, there is no dispute that the assertions of the assessee for its entitlement for exemption under Section 10(23C)(iiiad) of the Act are justified. Therefore, in my considered opinion, it would be in the fitness of things that the exemption under Section 10(23C)(iiiad) of the Act is allowed to the assessee. I direct accordingly.

5.

In the result, the appeal of the assessee is allowed as above. Decision pronounced in the open Court on 31st October, 2019.

More judgments on Section 139(4C)

All 45 judgments and leading authorities on Section 139(4C) →

Recent GST High Court judgments

Search GST case law →