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Facts
The assessee, a religious institution with Section 12A approval, deposited Rs. 7,85,500 during the demonetization period. Its Income Tax Return for AY 2017-18 was filed belatedly, leading the AO to disallow Section 12A benefits and tax the deposit at Maximum Marginal Rate, a decision upheld by the CIT(A).
Held
The Tribunal remitted the case back to the CIT(A) for fresh consideration. The CIT(A) is directed to specifically examine the applicability of Section 12A(ba), which was not previously discussed, and to consider the Supreme Court judgment in Wipro, providing the assessee a meaningful opportunity.
Key Issues
Whether the assessee is entitled to benefits under Sections 11 and 12 of the Act despite filing a belated return, and the correct applicability of clause (ba) of Section 12A of the Income Tax Act, 1961.
Sections Cited
12A, 11, 12, 139
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Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI PRAKASH CHAND YADAV
Date of Hearing : 29.05.2025 Date of Pronouncement : 23.06.2025 O R D E R PERPRAKASH CHAND YADAV, JUDICIAL MEMBER:
Present appeal of the assessee is arising from the order of ld. CIT(A) dated 22.2.2025 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1073595898(1) and relates to the AY 2017-18.
Brief facts of the case as coming out from the orders of authorities below are that the assessee is a religious institution and has been granted approval u/s 12A of the Income Tax Act, 1961 (in short “The Act”) from the office of Commissioner of Income Tax (Exemption), Trivandrum. During the impugned year, the assessee has deposited an amount of Rs.7,85,500/- during the period of demonetization. By observing this, the case of the assessee has been picked up for scrutiny. During the course of assessment proceedings, the AO observed that the assessee has not filed any Bethsaida Women Development Societey, Trivandrum Page 2 of 3 return of income for the impugned assessment yar. The AO further observed that the return of income filed by the assessee on 27.4.2018 is a belated return and assessee cannot claim the benefits of section 12A of the Act. Thereafter, the AO taxed the entire deposits by applying Maximum Marginal Rate under the head “income from other sources”.
Aggrieved with the order of AO, assessee filed appeal before the ld. CIT(A) and argued that for the impugned year, it was not mandatory to file the income tax return for claiming benefits u/s 11 & 12 of the Act. The ld. CIT(A) relying upon the judgement of Nileshwar reported in 459 ITR 730 (Kerala) dismissed the appeal of the assessee.
Counsel for the assessee appearing on behalf of the assessee argued that amendment made in section 12A of the Act in clause (ba) is prospective in nature and could not be applied to the present case.
Ld. D.R. relied upon the orders of the authorities below.\
After considering the rival submissions and perusing the materials available on record, it is observed that time limit to file a valid return in terms of the provisions of section 139 of the Act has been increased by the CBDT( Circular Number-3 of 2017 dated 20.01.2017) upto 31.3.2018. However, the assessee in this case before us, has filed the return of income on 27.4.2018, which is beyond the time limit as extended by the CBDT. Perusal of the order of ld. CIT(A) would show that the ld. CIT(A) has not at all discussed about the applicability of clause (ba) of section 12A of the Act. Therefore, we remit this matter back to the file of ld. CIT(A) for deciding afresh in accordance with law. The ld. CIT(A) will also Bethsaida Women Development Societey, Trivandrum Page 3 of 3 consider the judgement of Wipro rendered by Hon’ble Supreme Court reported in 446 ITR 1. With these observations, we remit this matter to the file of ld. CIT(A).
Needless to say, that ld. CIT(A) will grant meaningful opportunity to the assessee before passing any order.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 23rd June, 2025