UMMEED FOUNDATION ,VADODARA vs. THE ITO, WARD 3(1)(2), VADODARA

The Ld. Addl/JCIT(A), Raipur has erred in law and in facts in not appreciating the fact that the adjustment made by Ld. A.O., CPC, Bengaluru does not fall within the permissible scope of section 143(1)(a), which allows adjustments only for apparent arithmetical errors, incorrect claims, or clear mismatches with information in Form 26AS/AIS/TIS.

The Ld. Addl/JCIT(A), Raipur has erred in law and in facts in confirming the action of the Ld. A.O., CPC, Bengaluru in assessing the income of the appellant at Rs. 9,59,903/- as against the returned income of Rs. 7,000/- by denying the effect of Sections 11 & 12 of the LT. Act in the computation of income on the alleged ground that the appellant has not filed the return of income u/s. 139(1) in the prescribed time limit, without appreciating the fact that there is no such requirement mandated by Sec. 12A(ba) The impugned addition of Rs. 9,59,903/- being bad in law and in facts is prayed to be deleted.

The Ld. Addl./JCIT(A), Raipur has further erred in law and in facts in not following the binding Circular No. 2/2018 (F. No. 370142/15/2017-TPL) dated 15.02.2018 and No. F. No. 173/193/2019-ITA-1 dated 23.04.2019 issued in this regard.

Your appellant craves liberty to add, alter, amend substitute or withdraw any of the grounds of appeal hereinabove contained.

Shri. Hemant Suthar, the Ld. AR of the assessee admitted that the Form No. 10B was filed belatedly on 15.02.2022 as against the due date of 15.02.2021. He submitted that the assessee had filed its return of income on 31.03.2021 which was within the time limit allowed u/s. 139 of the Act. He submitted that only requirement to claim the benefit of provision of section 11 of the Act was that the return of income should be filed within the time limit u/s. 139 of the Act, which was duly complied in the present case. As regarding the filing of Form No. 10B, the Ld. A.R submitted that this was only a procedural requirement and the failure to furnish the same along with return of income cannot be treated as mandatory requirement for claiming exemption u/s. 11 of the Act. In this regard he placed reliance on the following decisions.

Per contra, Shri Suresh Chand Meena, the Ld. SR-DR, submitted that the due date of filing of return for this year was 31.12.2021 only. Since the assessee had not filed the return within the due date, the CPC had rightly disallowed the claim for deduction u/s. 11 of the Act. He, therefore, strongly supported the order of the Ld. CIT(A).

We have considered the rival submissions. The assessee had filed its return of income for A.Y. 2020-21 on 31.03.2021 as against extended due date of 15.02.2021 for this year. Considering the fact that the return was filed during pandemic period, the delay, if any, in filing of return has to be leniently considered. Further, the CBDT vide Circular F.No.173/193/2019-ITA-I had clarified that the entities registered under section 12AA of the Act were required to file return of income within the time allowed u/s 139 of the Act, which includes the time for filing of belated return. Therefore, the deduction claimed by the assessee couldn’t have been denied on the ground of delay in filing of return as the same was filed within the time limit u/s 139 of the Act. As regarding delay in filing of Form No. 10B, the Hon’ble Jurisdictional High Court has held in the case of Parul Mahila Pragati Mandal (supra) that this was only a procedural requirement for claiming exemption u/s. 11 of the Act and even if such Form is filed at the later stage, the assessee will be entitled to claim exemption u/s. 11 of the Act. The observation of the Hon’ble High Court in that case is as under:

It was submitted that the delay was neither deliberate nor attributable to any mala fide intention on the part of the assessee. Therefore, the delay in furnishing Form No. 10B deserves to be condoned in the interest of substantial justice. Following the decision of the Hon’ble Jurisdictional High Court, we set aside the impugned order of the Ld. Addl. CIT(A) and direct the Jurisdictional AO to condone the delay in filing Form No. 10B and thereafter grant the exemption u/s. 11 of the Act, subject to verification of the other statutory conditions which was required to be satisfied.

In the result, the appeal of the assessee is allowed for statistical purpose.