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Facts
The assessee, a trust, filed its original return claiming exemption under Section 11, but later filed a revised return claiming exemption under Section 10(23C)(iiiac) within the prescribed time limit. The Assessing Officer (AO) and the CIT(A) denied this claim, stating that the revised return was filed late or beyond the permissible period for rectification. The assessee appealed this decision.
Held
The Tribunal held that the assessee had filed the revised return within the time limit prescribed under Section 139(5) of the Act. The AO should have considered the revised return and amended the intimation accordingly. Relying on precedents, the Tribunal found that a genuine claim should not be denied due to technicalities or procedural lapses.
Key Issues
Whether the assessee's revised return claiming exemption under Section 10(23C)(iiiac) was validly filed within the prescribed time limit, and if so, whether the AO was obligated to consider it for amending the intimation under Section 143(1).
Sections Cited
10(23C)(iiiac), 11, 139(5), 143(1), 154, 234A, 234B, 234C, 234D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short “the ld. CIT(A)/NFAC”], dated 25.07.2023, which in turn arises out of an assessment order passed by the Assessing Officer, Central Processing Centre, Bangalore (in short ‘the AO’) u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), vide order dated 16.11.2024.
The grounds of appeal
raised by the assessee are as follows: “1. That, the Ld. AO has wrongly passed order u/s 154 of the I.T. Act, 1961.
2. The Learned CIT(A) has wrongly confirmed disallowance of deduction amounting to Rs.3,99,140/-.
3. That, the Ld. CIT(A) has wrongly confirmed levy of interest u/s 234A, 234B, 234C and 234D of the I.T. Act, 1961.
ITA.328/RJT/2023/AY.2013-14 Rogi Kalyan Samiti Chital
That, the finding of the Ld. CIT and Ld. AO are not justified in law as well as facts of the case and required to be deleted.
5. The assessee craves to add, alter, amend or delete any of the above grounds of appeal
.”
3. Succinctly, the factual panorama of the case is that assessee before us is a trust and established mainly to implement the Government Policy relating to Medical facility for General Public or Public at large. The main source of Trust is the income by way of grant from Government or Government Agencies. The assessee- trust was set up in the year 2012 and is registered under section 12AA of the Act. It availed exemption under section 10(23C) (iiiac) of the Act. The assessee filed its Return of Income, as on 27th January 2014, after claim of deduction u/s. 11 of the Act declaring total income NIL. The return was duly accompanied with Audit report in Form No 10. The assessee has received an intimation u/s. 143(1) of the Act, from CPC, and as per intimation, the CPC has not given credit of deduction u/s. 11 hence assessee has filed its revised return, as on 31st December 2014 and claimed exemption u/s 10(23C)(iiiac) of the Act. The assessee has not received any fresh intimation from CPC. Later on, the Assessing Officer has issued a notice to the assessee for recovery of outstanding demand on 13-02-2021. The point no. 4 of the said notice contains the following details: “4. If the above demand was wrongly raised by the CPC while processing your ROI then please provide the copy of Rectification Application if any fled by you. Further, if the demand does not exist as per your record, then please submit the fresh Rectification Application along with following documents so that necessary rectification/ verification of demand can be done.”
4. The assessee- trust has fled reply against the notice of A.O. dated 16-02-2021, along with the necessary documents as mentioned in the notice, but the assessee`s reply was rejected by the A.O. on dated 23-02- 2021, with following remarks: Page | 2 ITA.328/RJT/2023/AY.2013-14 Rogi Kalyan Samiti Chital “On Verification your Application it is seen that the Assessee has stated that to pass the order u/s 154, which is made after expiry of beyond the period of four years from the end of the financial year.”
Therefore, assessee`s request to provide him exemption under section 10(23C) (iiiac) of the Act, was denied.
Aggrieved by the order of the assessing officer (CPC-AO), the assessee, carried the matter in appeal before the learned CIT(A), who has dismissed the appeal of the assessee. The ld.CIT(A) noticed that there was no apparent mistake of facts and or law in the impugned intimation coming within the scope and ambit of Section 154 of the Act.
Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us.
Shri Kalpesh Doshi, Learned Counsel for the assessee, pleaded that assessee-trust has filed original return of income on 27/01/2014. However, the assessee trust has mistakenly claimed the exemption u/s 11 of the Income Tax Act, instead of claiming u/s 10(23C)(iiic) of the Act. The ld. Counsel submitted a copy of original return, before the Bench, which is placed in paper book page no.41 to 42. The said return was processed under section 143(1) by the CPC, Bangalore. As per the intimation u/s 143(1) of the Act, the benefit of exemption u/s 11 was not allowed to the assessee-trust. The assessee`s income was computed at Rs.3,49,300/-, by the assessing officer and to prove this fact, the assessee submitted before the Bench, a copy of the intimation u/s 143(1) of the Act, which is placed at paper book page no.43 to 48. Therefore, the assessee trust has filed revised return of income on 31/12/2014, claiming deduction of Rs. 3,46,746/- u/s 10(23C)(iiiac) of the Act. The assessee has furnished a copy of revised return, before the Bench, which is enclosed at page no.51 to 52 of the paper-book. The ld. Counsel argued that assessee trust has duly filed the revised return within time Page | 3 ITA.328/RJT/2023/AY.2013-14 Rogi Kalyan Samiti Chital limit prescribed u/s 139(5) of the Act, therefore, assessee`s claim of deduction under section 10(23C)(iiiac) of the Act, may be allowed.
On the other hand, Learned Sr-DR for the revenue argued that first of all, the assessee filed the rectification application under section 154 of the Act, which was late, therefore ld. CIT(A) has rightly dismissed the same. Moreover, the assessee has failed to claim the deduction in the original return, therefore, no deduction should be allowed to the assessee, based on the revised return. Learned Sr-DR for the revenue also submitted written submission, which we have gone through. This way, ld. Sr-DR for the Revenue, reiterated, the findings of the CPC-AO, and stated that appeal of the assessee may dismissed.
We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, Learned Counsel for the assessee submitted, the chronology of the events occurred, in the assessee`s case, which are reproduced below:
Sr. Particulars Date of Section under Amount of No. filing which deduction deduction claimed return/rece was claimed iving intimation 1 Original ITR 27/01/2014 Section 11 3,46,746/- 2 143(1) 16/11/2024 The benefit of exemption under section Intimation 11 was not allowed since the assessee trust was not registered u/s 12A/12AA of the IT. Act 3 Revised ITR 31/12/2014 Section 3,46,746/- 10(23C)(iiiac)
We note that the assessee -trust has duly filed the revised return within time limit prescribed u/s 139(5) of the Act, the relevant Page | 4
ITA.328/RJT/2023/AY.2013-14 Rogi Kalyan Samiti Chital provisions of section 139(5) of the Act, are reproduced below for better understanding:
“(5) If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.” From the perusal of the above, it can be seen that the assessee-trust was entitled to furnish the revised return at any time before the expiry of one year from the end of assessment year 2013-14. The assessee- trust has filed the revised return on 31/12/2014 which is within the prescribed time limit. Since the revised return has been filed within prescribed time limit, the AO should have considered the revised return filed by the assessee- trust and should have amended the intimation issued under section 143(1)(a) of the Act, on the basis of the revised return. However, the AO has failed to do so.
We note that Co-ordinate Bench of ITAT Chandigarh in the case of Jan Shikshan Sansthan vs. ITO (Exemptions) (2024) 164 taxmann.com 226 (Chandigarh - Trib.), held that where the assessee- society filed original return incorrectly showing income under 'Profit and gains of business or profession' instead of 'Income from other sources', and the CPC-AO denied exemption u/s 11, while processing return u/s 143(1) of the Act. The Assessee filed revised return within prescribed time limit correcting income classification, therefore, since the assessee timely filed revised return correcting inadvertent error in income classification and disclosing all necessary particulars of receipts and utilization, claim of exemption u/s 11 of the Act, was allowed. The Co-ordinate Bench of ITAT Jaipur, in the case of SMS-AAMW Tollways (P.) Ltd, vs. DCIT [20221 145 taxmann.com 143 (Jaipur - Page | 5
ITA.328/RJT/2023/AY.2013-14 Rogi Kalyan Samiti Chital Trib.), observed that assessee filed original return of income on 29-09- 2012, and intimation u/s 143(1) of the Act, was issued on 18-05-2013 - Thereafter, assessee filed revised return by considering amortization of toll modernization expenses and preliminary expenses written off, which were inadvertently omitted to be considered in original return. The AO refused to consider revised return by observing that same was filed after issuance of intimation u/s 143(1) of the Act, however, the Tribunal held that revised return filed by assessee was required to be considered, as the same was filed within statutory time limits provided under Income-tax Act.
On the identical facts, our view is further fortified by the judgement of the Hon`ble jurisdictional High Court of Gujarat in the case of CIT vs. Himgiri Foods Ltd. (Gujarat HC) [2010] 231 CTR 470 (Guj), wherein, it was observed by the Hon`ble court that on a plain reading of section 143(1B), it is apparent that the provision mandates that if after the issuance of intimation, a revised return is furnished by an assessee under sub-section (5) of section 139 of the Act, then it is incumbent upon the Assessing Officer to process the revised return and amend the intimation issued u/s 143(1)(a) on the basis of the revised return. At this stage there is no question of going into the validity of the return filed u/s 139(5) of the Act, if the revised return is filed within the prescribed period of limitation. An intimation u/s 143(1)(a) of the Act, cannot be equated with an assessment framed u/s 143(3) of the Act, and the Assessing Officer cannot refuse to process the revised return and modify the intimation in accordance with section 143(1B) of the Act.
We also note that assessee claimed deduction initially in the original income-tax return (ITR) under the wrong Column and thereafter on 31.12.2014, the assessee filed revised Income Tax Return, and the Page | 6