INCOME TAX OFFICER (EXEMPTIONS) WARD-3, BANGALORE vs. SRI RAMAIAH REDDY EDUCATIONAL TRUST, BENGALURU

Per George George K, Vice President:

1. The Order of Ld.CIT(A) is opposed to facts and circumstances of the case; 2. The Ld. CIT(A) has erred in not appreciating the fact that the assessee had not filed form 10B within the stipulated time as per the provisions of sec.12A(1)(b) and hence not eligible for exemption u/ s.11 & 12 of the Income Tax Act for the relevant assessment year;

3. The Ld.CIT(A) has erred in allowing the appeal of assessee on an entirely different ground which was not the reason for disallowance of exemption under sections 11 & 12 claimed by the assessee; 4. The Ld.CIT(A) has erred in allowing the appeal of assessee on the ground that the assessee had an existing registration under section 12AA of the Act which continued to remain valid for the year under consideration while the reason for disallowance of the claim of exemption by the CPC was clearly stated in the order under section 154 as the assessee had not filed audit report in Form 10B at least one month prior to the clue date for furnishing Return under section 139(1) and hence the exemption claimed under section is not allowable in accordance with the provisions of section 12A(1)(b) of the Income Tax Act. 5. The Ld.CIT(A) has erred in not discussing the reason for disallowance as proposed and mentioned in the Intimation under section 143(1) Act as well as in the Order under section 154 of the Income Tax Act, 1961; 6. The appellant craves leave to add, alter or amend all or any of the Grounds of Appeal

before or at the time of the hearing of the appeal.

7. The Order of the Ld.CIT(A), NFAC may be set-aside and the Order of the AO may be confirmed.

Assessee is a Trust running educational institution. It is registered under section 12A of the Act. For the Assessment Year 2021-22, the return of income was filed on 11.02.2022 declaring total income of Rs.Nil after claiming exemption under section 11 of the Act. The return of income for Assessment Year 2021-22 was due on 15.03.2022 (extended due date). The return was processed under section 143(1) of the Act, on 12.08.2022. Subsequently, the AO passed a rectification order under section 154 of the Act on 13.02.2023. In the said rectification order, total income was determined at Rs.4,18,46,403/- by denying the claim of exemption claimed in the return of income. In the Order passed under section 154 of the Act, the claim of exemption under section 11 was denied for the reason that assessee did not file audit report in Form 10B within the due date prescribed and hence the exemption claimed is not allowable in accordance with the provisions of section 12A(1)(b) of the Act. The relevant observation of the AO in passing the Order under section 154 of the Act reads as follows:

“The Trust or Institution registered u/s 12A/12AA/12AB has not E-filed the Audit Report in Form 10B atleast one month prior to the due date-for furnishing return u/s 139(1). Hence the exemption claimed in Sr.no. 2 [exemption claimed u/s 11(1)(d)] and Sr.no. 4i to4viii of Part B-TI is not allowable in accordance with the provisions of Section-12A(1)(b) of the income tax Act.”