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Facts
The assessee, a registered trust, accumulated Rs. 6,06,240/- to purchase a vehicle and filed Form 9A under Section 11(1) of the Income Tax Act. However, due to a typographical error, its Income Tax Return reflected this accumulation under Section 11(2), leading the CPC to tax the amount for non-filing of Form 10 (required for Section 11(2)). The JCIT(A) upheld this assessment.
Held
The Tribunal found that the assessee's intention was to avail benefits under Section 11(1) as evidenced by the timely filing of Form 9A and the actual application of funds. It held that the entry under Section 11(2) in the ITR was a bonafide typographical error and condoned it, concluding that Form 10 was not required for accumulation under Section 11(1).
Key Issues
Whether a typographical error in an Income Tax Return, incorrectly mentioning income accumulation under Section 11(2) instead of Section 11(1), can be condoned, thereby exempting the assessee from filing Form 10 when Form 9A was duly filed.
Sections Cited
Section 12A, Section 80G, Section 11(1), Section 11(2), Section 143(1), Rule 17(1) of the Income Tax Rules
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “H”: NEW DELHI
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2022-23, arise out of the order of the Commissioner of Income Tax (Appeals)- Addl. / JCIT (A) - 12, Mumbai [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. NFAC/2021-22/10230997 dated 03.11.2023 against the order of assessment passed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2023 by the CPC.
We have heard the rival submissions and perused the material available on record. The assessee is a trust, propagating education of Yoga. The Trust is duly registered under section 12A of the Act and approval under section 80G of the Act is also granted to the assessee trust. During the year under consideration, the assessee exercised option under Clause 2 of Explanation to Section 11(1) of the Act for application of Rs.6,06,240/- in support of which, the assessee furnished Form No.9A on 05.09.2022 before the learned AO before the date of filing of return of income. The said form No.9A is enclosed in pages 58-59 of the paper book clearly stating that the sum of Rs.6,06,240/- was accumulated to purchase vehicle and which was purchased in June 2022 by the assessee. After the filing of Form No.9A, the assessee furnished its income tax return before the learned AO. The aforesaid option under section 11(1) was exercised by assessee in accordance with section 11(1) of the Act read with Rule 17(1) of the Income Tax Rules. It is pertinent to note that assessee in the Income Tax Return form reflected the sum of Rs.6,06,240/- under amount set apart for specified purpose and accordingly, accumulated as per Section 11(2) of the Act in Part B-TI.6(vi) of the ITR. This was a genuine typographical error committed by the assessee in the ITR. But the said return was duly processed by CPC-Bengaluru wherein it held that assessee having decided to accumulate income of Rs.6,06,240/- as per Section 11(2) of the Act, ought to have furnished Form No.10 along with return of income. Since, the Form No.10 was not filed by the assessee, this unapplied income of Rs.6,06,240/- was sought to be brought to tax by CPC, Bengaluru. This account of the learned CPC was upheld by the learned JCIT (Appeal)-12, Mumbai.
Given the facts narrated above, it is clear that assessee merely committed typographical error by mentioning the unapplied figure of Rs.6,06,240/- in wrong column. It is clear that assessee had actually applied the said deficit figure of Rs.6,06,240/- in June, 2022 for the purpose of objects of the trust. Assessee in the instant case was pursuing the statutorily available alternative route of availing the benefit under section 11(1) of the Act read with Rule 17(1) of the Rules for which it had also filed Form No.9A before the date of filing of ITR itself. This clearly indicates the bonafide intention of the assessee to avail the benefit only under section 11(1) of the Act and not 11(2) of the Act. Hence, the assessee is not obliged to file Form 10 for accumulation of income in the facts and circumstances of the instant case. Accordingly, the typographical error committed by the assessee in the ITR deserves to be condoned. Accordingly, grounds raised by the assessee are allowed.
In the result, appeal of the assessee is allowed. Order was pronounced in the open court on 18/10/2024.