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Facts
The assessee inadvertently mentioned accumulated income details in the wrong column of Form 10B for AY 2014-15. This led to an intimation under section 143(1) determining taxable income and subsequent rectification applications were rejected due to delay and lack of condonation.
Held
The Tribunal held that the mistake in mentioning accumulated income in the wrong column was an inadvertent error and not a frivolous claim. The delay in filing the revised Form 10B was not condoned, but the Tribunal considered substantial justice.
Key Issues
Whether the assessee's appeal should be allowed despite the delay in filing the revised Form 10B and the initial incorrect reporting of information?
Sections Cited
Section 11, Section 143(1), Section 154
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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI K.M. ROY
This appeal has been preferred by the Assessee against the order dated 15/03/2024 impugned herein passed by the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [in short, “Ld. Commissioner”] u/sec. 250 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year (for short, “AY”) 2014-15.
2 ITA.No.237/NAG/2024 2. Admittedly, the Assessee in column No.3 of Form No. 10B dated 26/02/2015 with regard to the amount of income accumulated or set apart for application to charitable or religious purposes to the extent it does not exceed 15% of the income derived from property held under trust wholly for such purposes, replied „No‟. However, in para 2, which pertains to whether the trust has exercised the option under clause (2) of the Explanation to section 11(1)? If so, the details of the amount of income deemed to have been applied to charitable or religious purposes in India during the previous year, the Assessee has replied „Yes‟ and mentioned the amount of ₹ 1,24,56,743/– being an amount @ 11% of the total income from other sources to the tune of ₹ 12,06,98,465/– while spending more than 85% i.e. 89% i.e. ₹ 10,89,41,721/– and, therefore, complied with the parameters for availing the benefit u/sec. 11 of the Act. 2.1 It is also an admitted fact that in the return of income in the respective columns i.e. Part B–2(i) sub–clause (4) to sub–clause (9)(i) and sub–clause 9(f), the Assessee clearly shown gross income from other sources and the amount applied to charitable purposes in India during the previous year and the amount accumulated or set apart for application for charitable purposes to the extent it does not exceed 15% of the income derived from trust/institution, u/sec. 11 etc. 2.2 The CPC while processing the return of income filed by the Assessee and taking into consideration, the details mentioned by the Assessee qua accumulated income in para 3 instead of para 2, ultimately vide intimation dated 14/05/2018 u/sec. 143(1) of the Act, determined the taxable income of ₹ 1,24,56,744/– and, therefore, the Assessee vide revised Form 10B dated 31/12/2018 revised the statement of particulars and clearly mentioned the 3 ITA.No.237/NAG/2024 amount accumulated in para 2, which is the relevant part and by answering the column No.2(s) „No‟ as the same was not applicable to the Assessee. 2.3 The Assessee after receiving intimation/order u/d 143(1) of the Act, filed a rectification application on dated 31/03/2018, however, of no avail, as the CPC vide rectification order dated 14/05/2018 made no change and ultimately affirmed the income determined by the CPC vide original intimation/order u/sec. 143(1) dated 14/05/2018. 2.4 Subsequently, the Assessee by realising its mistake, filed another rectification application on 11/03/2020, however, the same was also denied by the Assessing Officer, mainly on the reason “that Form 10B for A.Y. 2014–15 on 23/08/2019, is delayed by 04 years and 06 months and the delay has not been condoned by the competent authority. It is also seen that number of rectification application have been filed which are already rejected and disposed of. The Assessee filed its rectification application on 11/03/2020 on similar issue u/sec. 154, as there is no mistake apparent from record”.
The Assessee being aggrieved, challenged the said order before the Ld. Commissioner, who vide impugned order dismissed the appeal of the Assessee by observing and holding as under: “That the Assessee could have filed revised return to rectify the mistake committed while filing original return. It is seen that the Assessee had filed revised Form 10B with a delay of 04 years and 06 months and the condonation was not granted by the competent authority. Hence, the Assessing Officer is right in the recitation order”.
We have given thoughtful consideration to the peculiar facts and circumstances of the case and the orders passed by the CPC and the Ld. Commissioner and the issue involved. Admittedly, this is not a case of mentioning wrong figures in the return of income
4 ITA.No.237/NAG/2024 and/or claim of frivolous or false claim and, therefore, the Assessee was not supposed to file the revised return of income, as opined by the Ld. Commissioner. In fact, there seems to be inadvertent mistake in mentioning the details of the accumulated income in column No.2 instead of column 3 in Form 10B and, therefore, nothing would change and/or it cannot be said that the Assessee has hidden something and /or raised wrong claim. It is also the mandate of Article 265 of the Constitution of India that “Taxes not to be imposed save by authority of law” meaning thereby no tax shall be levied or collected except by authority of law. Thus, considering the aforesaid fact, for substantial justice, we are inclined to allow the appeal of the Assessee and delete the disallowance made by AO as affirmed by Ld. Commissioner. Thus the same is deleted by allowing appeal of the Assessee.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court on 23.06.2025.
Sd/- Sd/- (K.M. ROY) (NARENDER KUMAR CHOUDHRY) Accountant Member Judicial Member vr/-