OM CHARITABLE CHIKITSA SAMITI,GWALIOR vs. CIT APPEALS, DELHI
Facts
The assessee, an educational institution, claimed exemption under Section 10(23C)(iiiad) for AY 2017-18. The Assessing Officer denied this exemption, stating that the gross receipts exceeded Rs. 1 crore as per Rule 2BC and Form 10B was not filed correctly. The CIT(A) upheld the AO's order.
Held
The Tribunal held that the assessee had a clerical error in claiming exemption under the wrong sub-section (iiiad instead of vi). Form 10B was filed physically before the due date and accepted by the AO. The procedural technicalities should not defeat the substantial rights of the assessee. The denial of the claim was based on a hyper-technical approach.
Key Issues
Whether the assessee is entitled to claim exemption under Section 10(23C) despite a clerical error in the return and issues with the filing of Form 10B, when the AO accepted the physical submission.
Sections Cited
10(23C)(iiiad), 11, 10(23C)(vi), 143(2), 142(1), 2BC, 12A(b), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.06/Agr/2025 Assessment Year: 2017-18
Om Charitable Chikitsa Samiti, Vs. Assessing Officer, Guda Gudi Ka Naka, Lashkar, Exemption Circle, Bhopal. Gwalior (MP). PAN : AAATO1825F (Appellant) (Respondent) Assessee by None Department by Sh. Anil Kumar, Sr. DR Date of hearing 15.07.2025 Date of pronouncement
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER: This appeal has been preferred by assessee against the impugned order dated 18.11.2024 passed in Appeal No. CIT (A), Bhopal- 2/10333/2019-20 by the Ld. Commissioner of Income-tax (A), NFAC, Delhi
u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2017-18, wherein the ld. CIT(Appeals) has confirmed the assessment order dated 10.12.2019, wherein it has been held that the
assessee is neither entitled to claim deduction u/s. 10(23)C(iiiad) nor u/s. 11 of the Act.
ITA No.06/Agr/2025
Brief facts, state that appellant/assessee-trust, is an educational
institution registered u/s. 12AA by the ld. CIT, Gwalior, vide, registration No.
12AA/77/54/09-10/1153 dated 14.07.2010 and u/s. 10(23C)(vi) vide order
dated 21.06.2013 passed by Ld. CCIT, Bhopal. The assessee claimed
exemption u/s. 10(23C)(iiiad) of the Act in the return of income filed
electronically on 06.11.2017. The case was selected for scrutiny through
CASS. Statutory notices u/s. 143(2) and 142(1) of the Act were issued to the
assessee, who responded to the notices and submitted its replies before the
Assessing Officer. Learned Assessing Officer, after perusal of assessee’s
response, observed that the assessee has shown gross receipts of
Rs.5,64,00,245/- and claimed the same as exempt u/s. 10(23C)(iiiad) of the
Act. Learned Assessing Officer, after referring Rule 2BC of the Income-tax
Rules, 1962, observed that the assessee is neither entitled to claim
exemption u/s. 10(23C)(iiiad), as it can be given only upto the annual
receipts of Rs.1 crore in view of Rule 2BC nor u/s. 11 of the Act, despite
being registered u/s. 12AA and u/s. 10(23C)(vi) of the Act, and further due
to non-submission of form 10B along with the return, which was required to
be filed online in accordance with section 12A(b) of the Act. Learned
Assessing Officer also made a running reference in the assessment order
that Form-10B dated 15.09.2017 signed by a Chartered Accountant was
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submitted in the physical form but did not accept the same due to not having
been submitted along with the return filed electronically.
Aggrieved, the assessee preferred an appeal before the ld.
CIT(Appeals) who approved the assessment order and dismissed
assessee’s first appeal.
The assessee has filed this appeal on the following grounds :
“1. On the facts and circumstance of the case the learned CIT(A) earned (erred) in Confirming the order of assessing officer, assessing the taxable income of Rs. 88,03,004/- on the Society income in Except Under Section 12AA & Section 10(23)(C) of the Act, is illegal unjustified and bad in Law. 2. On the Facts of the case The learned CIT(A erred in not considering the audit report on Form 10B Submitted during the assessment proceedings in compliance with the provision of Income Tax Act 1961 is illegal Unjustified and bad in Law. 3. On the facts of the case Learned CIT(A) erred in not accepting the face that the audited accounts and audit report was available in prescribed time how ever could not be submitted along with the return is a bone fide Mistake and can be cured that has not been considered is illegal unjustified and bad in Law.”
None responded on behalf of the assessee. Perused the records and
heard the ld. Departmental Representative.
On the basis of aforesaid grounds, raised in this appeal, the main
point to be determined under appeal is as to whether learned CIT(Appeals)
has erred in confirming the assessment order, whereby the physically
submitted audit report on Form 10B was not considered and the rectification
request of assessee to substitute section 10(23C)(vi) as against wrong 3 | P a g e
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mention of section 10(23C)(iiiad) in the return for the claim of said deduction
was declined despite the undisputed fact that the assessee was duly
registered u/s. 12AA and u/s. 10(23C)(vi) of the Act as well ?
The only party in attendance/the respondent through learned DR has
submitted that the assessee did not file Form 10B online along with the
return in compliance of section 12A(b) of the Act and further that the
assessee is also not entitled for the said claim, as the gross receipts
exceeded the limit of Rs.1 crore as prescribed under rule 2BC of the
Income-tax Rules. Learned DR has supported the impugned order and the
assessment order.
We proceed to decide the issue on merit on the basis of the material
available on record. The appellant assessee has mentioned in the ‘fact of
case’ available on record that due to a clerical omission, deduction was
claimed u/s. 10(23C)(iiiad) instead of correct section 10(23C)(vi) of the Act.
Revenue has not disputed the fact that the assessee society is registered
u/s. 12AA of the Act, vide, registration No. 12AA/77/54/09-10/1153 dated
14.07.2010, granted by CIT, Gwalior, and u/s. 10(23C) of the Act vide order
dated 21.06.2013, passed by CCIT, Bhopal. Such clerical mistake should
have in such a situation been rectified by revenue authorities instead of
rejecting the assessee’s request for rectification of the same. After the
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correction of such mistake, the question of applicability of Rule 2BC as
regards the annual receipts exceeding one crore, would also not arise.
This apart, it is further mentioned by the assessee in the “fact of case”
that the required Form No. 10B could not be submitted in electronic mode
despite best efforts but in physical form by assessee’s Chartered
Accountant and the same was accepted by the Assessing Officer. This fact
is substantiated by the assessment order dated 10.12.2019, wherein
learned Assessing Officer has mentioned that the Form 10B duly signed by
the Chartered Accountant was submitted during the course of assessment
on 15.09.2017. The matter relates to the assessment year 2017-18.
Though, the return of income is said to be filed on 06.11.2017, however,
Form 10B was already submitted in the physical form in the department on
15.09.2017 by the assessee. Ld. Assessing Officer has not raised any
concern in respect of required details existing in Form 10B, filed physically
on 15.09.2017.
It will be relevant to note that the law is nothing but an uncommon
common sense. Any rule of procedure is only a tool for justice and if
necessary, can be moulded to decide the real controversy. Procedural laws
provide for natural way of doing things and do not bar even for adoption of
additional procedure, as and when the situation may demand. There has to
be a human approach in following the procedure prescribed so that it serves 5 | P a g e
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the ends of justice and it should not be applied in such a manner to kill the
right/duty of any party. The sole object of procedural law is to promote
justice. Therefore, we are of the view that the Assessing Officer should not
have denied the rightful claim of the assessee merely on the basis that form
10B was filed in the physical form but not along with the return in electronic
form, more so, when the same was filed before the prescribed date of filing
of return. Ld. CIT(A) has miserably failed to take notice of aforesaid hyper-
technical approach adopted by the Ld. Assessing Officer. The impugned
order, thus, does not stand the test of truth. The aforesaid issue is
accordingly determined in favour of the assessee and against the revenue.
In the result, appeal is allowed for statistical purposes. Impugned
orders dated 18.11.2024 and the assessment order dated 10.12.2019 are
set aside. The matter is restored back to the file of the assessing officer with
the direction to decide the matter afresh in accordance with law, keeping the
aforesaid observations in view. Needless to say that the Assessing Officer
shall ensure the substantial compliance of the principles of natural justice.
Order pronounced in the open court on 27.08.2025.
Sd/- Sd/- (BRAJESH KUMAR SINGH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.08.2025 *aks/-
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