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Facts
The assessee, St. Anthonys High School, claimed exemption under section 10(23C)(vi) of the Income Tax Act for AY 2017-18. The Assessing Officer denied the exemption because Form 10BB was not filed within the due date, despite the CIT(E) having granted approval.
Held
The Assessing Officer denied the exemption based on the non-filing of Form 10BB. However, the CIT(E) later granted the approval, and subsequently, the AO passed a rectification order allowing the exemption after the CBDT condoned the late filing of Form 10BB. The Revenue's appeal was rendered infructuous.
Key Issues
Whether the exemption under section 10(23C)(vi) can be denied solely on the ground of late filing of Form 10BB, especially when such delays are condoned and subsequent rectification orders are passed.
Sections Cited
10(23C)(vi), 250, 143(3), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI OMKARESHWAR CHIDARA
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 08.02.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2017-18.
The Assessee had initially filed an application for approval of exemption u/s 10(23C)(vi) of the Act before the Ld. CIT(E), Mumbai, which was rejected by the Ld. CIT(E), Mumbai vide order dated 30.09.2016, against which the Assessee preferred an appeal before the Hon’ble Tribunal, who vide order dated 26.02.2018 passed in ITA
St. Anthonys High School Bombay No.6887/M/2016 directed the Ld. CIT(E), Mumbai to grant the aforesaid approval.
Therefore giving effect to the Tribunal’s order (supra) the Ld. CIT(E), Mumbai vide certificate/order dated 11.07.2019 has granted the approval u/s 10(23C)(vi) of the Act .
The Assessee’s return filed on 07.11.2017 for the AY under consideration, by which it has declared income at ‘Rs. Nil’, was selected for scrutiny under CASS for the reasons “Form 10B/10BB not filed/Approval obtained u/s 80G and large increase in the total voluntary contributions”. Consequently the statutory notices were issued to the Assessee, in response to which the Assessee filed various details. The Assessing Officer (AO) by perusing the details observed that though the Assessee is a trust registered with the Director of Income Tax (Exemption), Mumbai, however, has not filed audit report in form No.10BB along with its return of income within the due date of filing of the return of income but claimed exemption u/s 10(23C)(vi) of the Act and therefore as per 10th proviso to section 10(23C)(vi) of the Act, the claim of the exemption is not allowable and consequently vide order dated 03.12.2019 u/s 143(3) of the Act, denied the exemption of Rs.6,68,14,320/- as claimed by the Assessee u/s 10(23C)(vi) of the Act, simply on the ground that since form No.10BB was not filed within due date for filing the return of income and the manual audit report filed during the assessment proceedings, has no validity, as the same is not in accordance with the Act and IT Rules.
The Assessee, being aggrieved with the said order dated 03.12.2019 filed first appeal before the Ld. Commissioner. Before the Ld. Commissioner it was submitted by the assessee that the Ld. CIT(E), Mumbai has granted the approval u/s 10(23C)(vi) of the Act with a condition i.e. approval would be subject to the decision of the Hon’ble Bombay High Court in the appeal filed by the Department
St. Anthonys High School Bombay against the order dated 26.12.2018 of the Hon’ble ITAT, whereby the Hon’ble Tribunal directed to grant approval u/s 10(23C)(vi) of the Act.
The Ld. Commissioner by considering the peculiar facts and circumstances of the case and observing “that the AO denied the exemption but held that audit report in form 10BB was mandatorily filed along with the return of income and the Hon’ble ITAT already directed the Ld. CIT(E), Mumbai to grant the approval and the Ld. CIT(E), Mumbai has already passed the order giving effect to the Tribunal’s order dated 30.09.2016, by passing an order dated 11.07.2019”, allowed the appeal of the Assessee .
The Revenue Department, being aggrieved, is in appeal before us.
At the outset, the Assessee has submitted that vide impugned assessment order u/s 143(3) by the AO, a disallowance of Rs.6,68,14,320/- on account of claim of exemption u/s 10(23C)(vi) of the Act, was made, mainly on the reasons that form 10BB was not filed by the assessee within the due date specified and therefore as per 10th proviso to section 10(23C)(vi) of the Act the claim of exemption is not allowable. However, the CBDT vide circular dated 16.03.2021 condoned the filing/uploading of the form 10BB dated 03.12.2019 on e-filing portal by the assessee. Consequently, by taking cognizance of the said Circular passed by the CBDT, Ld. CIT(E), Mumbai vide order dated 16.03.2021 has allowed the appeal of the Assessee and consequently the AO vide rectification order dated 14.07.2021 u/s. 154 of the Act, has allowed the aforesaid exemption claimed and assessed the income of the assessee to the tune of Rs.14,868/-. Consequently, the appeal filed by the Revenue Department has become infructuous and therefore the same may be dismissed. The Ld. DR did not refute the aforesaid facts. Thus the appeal filed by the Revenue Department deserves dismissal being infructuous.
St. Anthonys High School Bombay
In the result, the appeal filed by the Revenue Department stands dismissed being infructuous.
Order pronounced in the open court on 31.07.2024.