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Facts
The assessee, an educational institution, appealed against the CIT(A)'s order for AY 2021-22, which confirmed a disallowance of Rs. 37,04,505 related to funds set aside under Section 11(2) and dismissed the appeal. The CIT(A) declined to condone the delay in filing Form No. 10, stating that the power to do so rested with the Ld. CIT(Exemption) and not the CIT(A).
Held
The Income Tax Appellate Tribunal noted that the Ld. CIT(Exemption) had subsequently condoned the delay in filing Form No. 10/10B via an order dated 06.05.2024 under Section 119(2)(b). Consequently, the ITAT set aside the CIT(A)'s impugned order and directed the CIT(A) to decide the assessee's appeal on its merits afresh.
Key Issues
Whether the CIT(A) had the authority to condone the delay in filing Form No. 10 for claiming deduction under Section 11(2), and if, after such condonation by the competent authority, the matter should be remanded for fresh adjudication on merits.
Sections Cited
Section 11(2), Section 12A, Section 119(2)(b)
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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
1. The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A)/ADDL/JCIT(A), Madurai dated 30.12.2023 for the assessment year 2021-22.
The assessee has raised following grounds of appeal:-
“The appellate orders are not justified and are against the natural law of justice.
2. The learned CIT(Appeal) was not justified in confirming the disallowance of Rs.37,04,505/- related to set-apart U/s 11(2) of Income Tax Act, 1961. 3. The appellant is a regular claimer of such deduction from the last sufficient years by having the registration U/s 12A of Income Tax Act, 1961, thus is quite eligible for such deduction.
4. That since the appellant is neither intentional or willful therefore, the humble appellant running an educational institution should not be deprived from their regular claim of deduction.
5. That being a regular claimer the clerical or oversight omission deserves to be over ruled to give justice to the humble appellant. 6. That the appellant craves their right to amend, delete or add any grounds of appeal
at or before the time of hearing.”
3. At the outset, Ld. Counsel for the assessee submitted that the appeal of the assessee was dismissed by Ld.CIT(A) and declined to condone the delay in respect of furnishing the Form No.10 as per the extent, law on the ground that he does not have such power. It was held that such power vests with Ld.CIT(Exemption) who is empowered for condoning such delay. He contended that the Competent Authority has now condoned the delay in filing the Form No.10. Therefore, he prayed that the appeal may be restored to the file of Ld.CIT(A) for adjudication on merit.
On the other hand, Ld. Sr. DR, Shri Om Parkash, fairly conceded that Ld.CIT(Exemption), Delhi has condoned the delay vide order dated 06.05.2024 u/s 119(2)(b) of the Income Tax Act, 1961 (“the Act”).
I have heard Ld. Authorized Representatives of the parties and perused the material available on record. The Ld. CIT(A) had dismissed the appeal of the assessee vide impugned order by observing as under:-
“The above factual matrix and the decision rendered by the H'ble Tribunal in the case of Association of Indian Panelboard Manufacturer v. Deputy Commissioner of Income-tax [2022] 143 taxmann.com 418 (Ahmedabad - ITAT) [22-07-2022] perfectly fits into the instant case of our appellant except that in Page | 2 the case relied it is delay in filing Form 10B whereas in the instant case it is delay in filing Form 10, but both pertain to section 11 exemption only and both are governed by CBDT Circular No. 273 only. As per CBDT Circular No. 273, dated 3-6-1980, CBDT had authorized only the jurisdictional Commissioner/Director of Income-tax to condone delay in filing Form 10, and Commissioner (Appeals) did not have any power under section 119(2)(b) to condone delay in filing Form 10. Accordingly, the power of condonation of delay in filing Form 10 rests with CIT (Exemption) only and not with the CIT(Appeals) or Addl. CIT(Appeals). Reliance is placed on the judgement of the H'ble Ahmedabad Tribunal in the case of Association of Indian Panelboard Manufacturer v. Deputy Commissioner of Income-tax [2022] 143 taxmann.com 418 (Ahmedabad ITAT) [22-07-2022]. Therefore, this appeal is not maintainable before the Addl. CIT (Appeals). Hence, the appeal of the appellant is dismissed as not maintainable.”
Now, it is brought to my notice that the delay has been condoned by Ld.CIT(Exemption). The Revenue has not disputed that vide order dated 06.05.2024, the Ld.CIT(Exemption) has condoned the delay in filing the Form No.10B. Under these facts, the prayer of the assessee for setting aside the impugned order and restoring the appeal to the file of Ld.CIT(A) for deciding it afresh, deserves to be allowed. The impugned order is hereby, set aside and Ld.CIT(A) is directed to decide the appeal on merit afresh. Grounds raised by the assessee are accordingly, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.