INCOME TAX OFFICER WARD-3 EXEMP, NAGPUR vs. PRERNA SAMAJIK SANSKRITIK BAHUDDESHIYA SHIKSHAN SANSTHA, ARMORI, GADCHIROLI
Facts
The Revenue appealed against an order by the CIT(A) who directed the deletion of an addition of Rs. 4,95,83,899/-. The addition was made under section 143(1) by rejecting the assessee trust's claim for exemption under section 11 of the Act.
Held
The CIT(A) held that the denial of exemption was based on the Form 10B not being filed within the prescribed time limit. However, the CIT(Exemption) had already condoned the delay in filing Form 10B. Therefore, the addition made under section 143(1) was not sustainable.
Key Issues
Whether the denial of exemption under section 11 due to delay in filing Form 10B was justified when the delay was condoned by the CIT(Exemption).
Sections Cited
143(1), 11, 12A(1)(ac), 12A(1)(ba), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, NAGPUR
Before: SHRI PAWAN SINGH, JM & SHRI KHETTRA MOHAN ROY, AM
Per: Khettra Mohan Roy, AM
The present appeal by the revenue is directed against the
impugned order dated 17/05/2024, passed by the learned
Commissioner of Income Tax (Appeal)/Addl/JCIT(A)–1, Chandigarh
[for short, “ld. CIT(A)”] for the Assessment Year (A.Y.) 2022–23. The
Revenue has raised the following grounds of appeal:
“A] On the facts and circumstances of the case the Ld. Addl/Jt.CIT(A)-1, Chandigarh erred in directing the Assessing Officer to delete the addition of Rs. 4,95,83,899/-made under section
2 ITA No. 408/Nag./2024 Prerna Samajik Sanskritik Bahuddeshiya Shikshan Sanstha
143(1) of the Act by rejecting the claim of exemption u/s 11 of the Act without appreciating the fact that the CIT(E), Pune has rejected the application of the assessee trust in Form No 10AB and cancelled the provisional registration granted on 04/04/2022 vide order in Form No. 10AD on 23/09/2023 which makes the trust ineligible for claiming exemption u/s 11 of the Act as the assessee trust doesn't have a valid registration for the year under consideration which is a mandatory condition for claiming exemption u/s 11 of the Act as laid down in section 12A(1)(ac) of the Act.
B] On the facts and circumstances of the case the AddI/Jt CIT(A)-1. Chandigarh erred in directing the Assessing Officer to delete the addition of Rs.4,95,83,899/-made under section 143(1) of the Act by rejecting the claim of exemption u/s 11 of the Act without appreciating the fact that the assessee trust has filed its R.O.I. for the year under consideration on 24/12/2022 after the extended due date for filing of R.O.I for AY 2022-23 which makes the trust ineligible for claiming exemption u/s 11 of the Act as the assessee trust doesn't fulfil the condition as laid down in section 12A(1)(ba) of the Act for claiming exemption u/s 11 of the Act.”
The ld. CIT(A) has granted relief by holding as follows:
“Under these grounds, the appellant has challenged the denial of exemption of Rs.4,95,83,899/- claimed under section 11 of the Act. I have considered the submission made by the assessee and also gone through the material available. The CPC has denied the exemption claimed under section 11 of the Act on the ground that the Form No. 10B was not filed within the prescribed time limit and charged the tax on the entire receipts without giving benefit of expenditure towards objects of the trust. As submitted by the appellant, the CIT(Exemption), Pune has already condoned the delay in filing the Form No. 10B vide order dated 26-05-2023 under section 119(2)(b) of the Act. With condonation of delay so granted before processing under section 143(1), there was no basis with the
3 ITA No. 408/Nag./2024 Prerna Samajik Sanskritik Bahuddeshiya Shikshan Sanstha
CPC for rejection of claim of exemption on account of delay in filing the Form 10B and therefore, adjustment made at the time of processing of return is not sustainable and therefore, adjustment made deserves to be deleted.
In view of the above facts, the both the grounds of appeal are allowed and accordingly, addition of Rs.4,95,83,899/- made under section 143(1)(a) of the Act by rejecting the claim of exemption under section 11 of the Act is deleted.”
At this juncture, it is worthwhile to refer to Circular no. 23/2022
dated 03.11.2022.
The ld. Sr. DR failed to bring any evidences to controvert the
cogent findings of ld. CIT(A). Further, Circular no. 23/2022
strengthens the case of assessee, hence there is no merit in revenue’s
appeal.
In the result, the appeal of revenue is accordingly dismissed.
Order pronounced in the open Court on 25/02/2026
Sd/– Sd/–- PAWAN SINGH KHETTRA MOHAN ROY JUDICIAL MEMBER ACCOUNTANT MEMBER Nagpur dated 25/02/2026
Copy of the order forwarded to:
(1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file.
4 ITA No. 408/Nag./2024 Prerna Samajik Sanskritik Bahuddeshiya Shikshan Sanstha
