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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED & T.R. SENTHIL KUMAR
O R D E R
PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER:
These two appeals are filed by the assessee against separate orders of even dated 19.8.2020 passed by the ld.Commissioner of Income(Appeals)-9, Ahmedabad relating to the Asstt.Years 2016-17 and 2017-18. Since issue raised in both the appeals are common, for the sake convenience, we dispose of both the appeals by this common order.
Registry has noted that there is a delay of 438 days in filing appeals by the assessee before the Tribunal. These appeals are filed before the Tribunal on 30.12.2021 whereas the appeals ought to have been filed on or before 20.12.2020. This period falls under COVID-Pandemic situation, thus following Hon’ble Supreme Court & 356/Ahd/2021 2 judgment dated 23.3.2020 in suo moto Writ Petition (Civil) No.3 of 2020, vide Hon’ble Supreme Court has extended time limit for filing appeals w.e.f. 15.3.2020. Thus, there is no delay in filing the above two appeals. Delay accordingly condoned, and take the appeals of the assessee for adjudication on merit. First we take assessee’s appeal for the Asst.Year 2016-17.
Brief facts of the case is that the assessee is a public charitable trust. The assessee filed its return of income for the Asst.Year 2016- 17 on 31.3.2018 declaring total income at Rs.25,72,805/- and deduction under sections 11 and 12 of the Income Tax Act, 1961 ("the Act" for short) was claimed at Rs.19,63,782/-, thus resulting net deduction of Rs.6,09,023/- and tax liability of Rs.65,907/-. The return was processed under section 143(1) of the Act on 25.2.2019 by DCIT, CPC, Bangalore. The CPC has not granted exemption under sections 11 and 12 on the ground that Form No.10B was not filed electronically. Thus, the total income was worked out at Rs.25,72,805/- and demanded a tax of Rs.7,73,720/-. Aggrieved against the same, the assessee filed appeal before the ld.CIT(A). During the course of assessment proceedings, the assessee submitted that the Registration under section 12AA was granted to the assessee-trust on 28.9.2018. The assessee submitted that it has filed return of income on 31.3.2018 and contended that the proceedings were pending on the date, when the registration was granted. The assessee also submitted that the benefit of exemption under section 12AA i.e. benefit of exemption under sections 11 and 12 shall be available to the assessee in respect of income derived from property held under the Trust for earlier assessment year and relied upon the provision of section 12A(2) inserted w.e.f. 1.10.2014 in support of its contention. The assessee further submitted that ITA No.355 & 356/Ahd/2021 3 the trust was established for charitable purpose and provides good public facility to general public without any reservation of caste and creed where community marriages were held and needy girls were provided financial support for marriages. The assessee further submitted that there is no change in either objects or the activities for the Asst.Year 2016-17 as compared to the Asst.Year 2018-19. Thus, the assessee-trust claimed that it was eligible for benefit as granted by the first proviso to section 12A(2) of the Act. However, the ld.CIT(A) dismissed the appeal and held as follows:
“4.6 It will be pertinent to mention that the law now stipulates that Form 10B is necessarily required to be filed electronically. This is necessitated by the departments objective to increase the efficiency of tax administration by leveraging technology for easier verification of the entries in the ITR and to promote a non-intrusive administration and voluntary self-compliance. The ITR is now processed online only. If Form 10B is not filed electronically the benefits of technology in processing the return cannot be taken as any manual form 10B entries cannot be utilized for granting benefit under section 11 and 12 of the Act by way of automatic computerized verification thereof. In the absence of electronic form 10B the AO will not be able to give credit to the application claimed by the appellant under section11(1). Although the appellant is eligible for exemption u/s 11 & 12 by failure to comply with the statutory requirement of filing Audit Report in Form 10B electronically benefit of the deductions claimed by it is not allowed. Only standard deduction u/s 11(1)(a) of 15% is allowable as of now. Subject to this, the action of AO u/s.143(1) is sustained. However, the appellant is free to file the said Form 10B online and/or approach the CIT(Exemption), Ahmedabad after filing Form 10B electronically to condone the delay in accordance with the delegated powers u/s.119(2)(b) of the Act. For statistical purpose, the ground of appeal
1 & 2 are dismissed.”
4. Aggrieved against the same, the assessee is before us raising a solitary ground as under:
Asst.Year : 2016-17 The ld.CIT(A) erred in not granting exemption u/s.11/12 of Rs.1963782 from the gross income. Asst.Year : 2017-18 & 356/Ahd/2021 4 The ld.CIT(A) erred in not granting exemption u/s.11/12 of Rs.1499371 from the gross income.
The ld.AR for the assessee reiterated before us the arguments made before the ld.CIT(A) and in support of its grounds, claimed that the assessee is entitled for exemptions under sections 11 and 12 of the Act. The ld. A.R. further filed additional grounds as follows: Ground-2 "The Learned C.I.T (Appeals) erred in law and on facts in directing to tax income of the appellant trust at Maximum Marginal Rate (MMR) though the trust is registered under Bombay Public Charitable Trust Act, 1951 therefore tax should be charged at normal rate of tax.
Per contra, the ld. D.R. appearing for the Revenue supported the orders passed by the lower authorities. Further, the ld. D.R. submitted that the assessee has misconstrued the entire 143(1) proceedings as well as the appellate order passed by the ld. CIT(A). The case of the department is that the assessee has failed to file Form No. 10B which is mandatorily required to be filed electronically with effect from Assessment Year 2016-17 onwards. As it can be seen from Ld. CIT(A)’s order Para 4.5, that Form No. 10B was filed manually during the appellate proceedings on 03/03/2020. However, no evidence of filing the same electronically has been adduced by the assessee. No reference to this is being made in the written submission filed by the assessee. This is a serious defect and necessitates analysis of the provision of law and procedures as per the Income Tax Act and Income Tax Rules, 1962 for filing the Audit Report in Form 10B alongwith the return of income. In the absence of the same, the ld.CIT(A) not allowed the benefit of deduction claimed by the assessee u/s. 11 and 12 of the Act. However, the ld. CIT(A) held that the assessee is free to file the said Form No. 10B online and/or approach the CIT(Exemption), Ahmedabad after filing & 356/Ahd/2021 5 Form 10B electronically to condone the delay in accordance with the delegated powers u/s. 119(2)(b) of the Act. For this technical reason, the appeal of the assessee has been dismissed. Thus, there is no error in the findings of the Ld. CIT(A), the assessee now before the Tribunal also fails to inform when Form 10B was electronically uploaded and also failed to file condonation petition before the concerned authorities. For this reason also, the ld. CIT(A)’s order does not require any interference and therefore prayed to dismiss the appeal filed by the assessee.
We have given our thoughtful consideration and perused the material available on record. The grounds of appeal
raised by the assessee is very general in nature without substantiating its claim how, the Ld. CIT(A) erred in not granting exemption u/s. 11 & 12 of the Act. The ld. CIT(A) has held that Form No. 10B was filed manually on 03/03/2020 during the appellate proceedings but no evidence of the Form 10B when was uploaded electronically by the assessee which is mandatory as per Section 12A(1)(b) of the Act read with Rule 17B of the Income Tax Rules. However, the ld. CIT(A) has observed that the assessee is free to file the said Form 10B online and/or approach the CIT(Exemption), Ahmedabad after filing Form 10B electronically and to condone the delay in accordance with the delegated powers vested u/s. 119(2)(b) of the Act. Such a power u/s. 119(2)(b) is not vested with ld. CIT(A). Therefore, the ld. CIT(A) dismiss the appeal filed by the assessee. Now before the Tribunal, the assessee has not produced only details of filing Form 10B electronically with condone delay petition. In absence of the same, We do not find any infirmity in the order passed by the ld. CIT(A) and therefore we have no hesitation in confirming the order passed by the ld. CIT(A). & 356/Ahd/2021 6
8. For the above reasons, the grounds raised by the assessee are hereby rejected and the additional grounds raised by the assessee is found not relevant to the facts and circumstances of the case, therefore the same is also rejected.
In the result, appeals filed by the Assessee are hereby dismissed.