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Facts
The assessee, Suresh Shroff Memorial Trust, claimed NIL income but the CPC processed its return under Section 143(1) and computed income at Rs. 98,45,058/-, denying exemption under Section 11. The denial was based on Form 10 not being filed before the due date. The assessee filed a revised return and also applied for condonation of delay for Form 10.
Held
The Tribunal noted that the CIT(Exemption) had condoned the delay in filing Form 10. Therefore, the Tribunal deemed it fit to restore the issues to the Assessing Officer (AO) to decide afresh after considering the orders of the CIT(Exemption) condoning the delay.
Key Issues
Whether the exemption under Section 11 could be denied for a procedural lapse in filing Form 10, and whether the revised return could be considered after the due date for filing Form 10.
Sections Cited
143(1), 11, 139(1), 139(5), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI RAHUL CHAUDHARY, HON’BLE
आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM
This appeal by the assessee is preferred against the order of Addl./JCIT(A)-1, Vadodara dated 23.01.2024 pertaining to Assessment Year 2017-18.
The grievance of the assessee reads as under:-
Suresh Shroff Memorial Trust 2 “1. That CIT(Appeals) erred on facts and in law in confirming the action of the Central Processing Centre (CPC) in passing the intimation dated 26.03.2019 under Section 143(1) of the Income tax Act, 1961 (the Act') for the relevant AY 2017-18 whereby income of the Appellant has been computed at Rs. 98,45,058/- as against NIL income returned by the Appellant.
1.1 That CIT(Appeals) erred on facts and in law in passing the order in undue hurry and in gross violation of principles of natural justice since no proper opportunity of being heard, much less for personal hearing, was provided to the Appellant.
2. That CIT(Appeals) erred on facts and in law in upholding the adjustment made by CPC in denying complete exemption of Rs 98,45,058/- claimed by the Appellant under Section 11 of the Act on the ground that the prescribed Form No. 10 was not furnished before the due date of furnishing return of income under Section 139(1) of the Act.
2.1 That the CIT(Appeals) erred on facts and in law in not appreciating that the Appellant's claim of exemption could not have been denied since such claim was admittedly made in the revised return filed under Section 139(5) of the Act, which substitutes the original return of income under Section 139(1) of the Act.
2.2 Without prejudice, the CIT(Appeals) failed to appreciate that no adjustment was warranted in the present case as the issue of denying exemption under Section 11 of the Act in case of procedural lapse of delay in filing of Form-10 by way of revised return was clearly debatable in nature and hence, beyond the jurisdiction vested with CPC under Section 143(1) of the Act.
Suresh Shroff Memorial Trust 3 2.3 Without prejudice, the CIT(Appeals) further failed consider that there were sufficient bonafide reasons which led to such delay in filing of Form-10, and the Appellant had already filed necessary condonation application with CIT(Exemption), wherein delay is expected to be condoned as similar delay has been condoned in respect of filing of Form-10B for the same AY 2017-18.”
Having heard the rival submissions, we have carefully perused the orders of the authorities below. The reasons for denying the claim of exemption is that Form 10 was not filed on or before the due date of filing of return u/s.139(1) of the Act alongwith audit report.
While filing the appeal before the CIT(A), the assessee also filed application for condonation of delay in filing Form 10B before the CIT(Exemption) as the CIT had powers to condone the delay u/s.119(2)(b) of the Act.
The assessment was confirmed by the CIT(A) and thereafter, the assessee received the orders condoning the delay in filing Form 10 which is placed before us.
We have carefully gone through the orders of the CIT(Exemption) dated 05/03/2021 and 08/08/2024. We find that by the impugned orders the CIT(Exemption) has condoned the delay, therefore, we deem it fit to restore the issues to the files of the AO with a direction to decide the issues afresh after considering the orders of the CIT(Exemption) condoning the delay.
Appeal is allowed for statistical purposes.