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Facts
The appellant, a charitable trust, claimed exemption under Section 11 of the Income Tax Act for AY 2017-18. The Assessing Officer (AO) denied the exemption, holding that the trust had not complied with Section 139(1) by not filing the return on time. The CIT(A) deleted the addition, finding the AO's action hyper-technical. Revenue appealed.
Held
The Tribunal noted that the issue hinges on whether Section 13(9) of the Act is applicable, which requires the return of income to be filed by the due date. The CIT(A)'s order was found to be cryptic. Therefore, the Tribunal restored the matter to the CIT(A) for a fresh disposal.
Key Issues
Whether the charitable trust was eligible for exemption under Section 11 when the return of income was not filed by the due date, in light of Section 13(9) of the Act.
Sections Cited
11, 13, 13(9), 139(1), 12A(1)(b), 21A, 143(3)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM
O R D E R Per: Inturi Rama Rao, AM These are appeals filed by Revenue directed against different orders of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 23.04.2025 for Assessment Years (AY) 2017-18 & 2018-19.
Since identical issues and facts are involved in these appeals, they are heard together and disposed of by this common order.
Brief facts of the case are that the appellant is a public religious trust registered u/s. 21A of the Income Tax Act, 1961 (the Act). The return of income for AY 2017-18 was filed 28.04.2018 disclosing Nil income after claiming exemption u/s. 11 of the Act. Against the said return of income, the assessment was completed by the Income Tax Officer (Exemption), Thiruvananthapuram vide order dated 31.12.2019 passed u/s. 143(3) of the Act at a total income of Rs. 3,98,46,460/-. While doing so, the AO denied exemption u/s. 11 of the Act by holding that the appellant had not complied with the mandatory condition of filing the return of income u/s. 139(1) of the Act placing reliance on section 12A(1)(b) r.w.s. 139(1) of the Act.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order deleted the addition by holding that the stand of the AO is totally hyper technical and procedural.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. The learned counsel for the assessee moved an application for adjournment of & 443/Coch/2025 St. Josephs Province the hearing of the appeal. However, we find that the issue in the appeal can be disposed of even in the absence of the assessee. Therefore, we proceeded to dispose of the same.
The learned CIT-DR submits that the CIT(A) had clearly fell in error in directing the AO to allow exemption u/s. 11 in ignorance of the provisions of sub-section (9) of section 13 f the Act and also by passing a cryptic order. It is submitted that the appellant had not even filed the return of income.
We heard the learned CIT-DR. The issue in the present appeal is whether the appellant was eligible for claiming exemption u/s. 11 of the Act in view of the provisions of sub-section (9) of section 13 of the Act. Admittedly, the appellant had not filed the return of income under the provisions of section 139(1) of the Act. The appellant is a charitable trust duly registered u/s. 12A of the Act. Provisions of sub-section (9) of section 13, which was inserted by Finance Act, 2015 w.e.f. 01.04.2016, reads as under: -
(1) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof— ...………………………….. (9) Nothing contained in sub-section (2) of section 11 shall operate so as to exclude any income from the total income of the previous year of a person in receipt thereof, if— (i) the statement referred to in clause (a) of the said sub- section in respect of such income is not furnished on or & 443/Coch/2025 St. Josephs Province before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year; or (ii) the return of income for the previous year is not furnished by such person on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the said previous year.
From a reading of the order of the CIT(A) it would manifest that the CIT(A) had granted exemption u/s. 11 by holding that provisions of sub-section (9) of section 13 are not applicable to religious charitable trusts. Admittedly, the appellant trust is a charitable trust registered u/s. 12A of the Act and claimed exemption u/s. 11 of the Act. Exemption u/s. 11 is subject to fulfillment of conditions laid down u/s. 13(9) of the Act. Moreover, the order passed by the CIT(A) is very cryptic and not a reasoned order. Therefore, we are of the considered opinion that the interest of justice would be met if the matter is restored to the file of CIT(A) for de novo disposal in accordance with law after affording reasonable opportunity of hearing to the appellant. Appeal partly allowed.
Order pronounced in the open court on 14th August, 2025.