JAN SEWA KHADI GRAMODHOG SEWA SANSTHAN,ETAWAH vs. ADIT, CPC, BENGALURU

Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), Bengaluru [CIT(A)] dated 10-05-2024 in the matter of an intimation issued by CPC u/s 143(1) on 31-01-2020. The sole grievance of the assessee is denial of deduction u/s 12AA. It is the submission of Ld. AR that the assessee is a charitable trust and the relevant registration to lay hand on impugned deduction was granted by appropriate authority vide order dated 13-02-2014. Having heard rival submissions and upon perusal of case records, the appeal is disposed- off as under.

The CPC, while processing the return of income, denied impugned deduction, apparently on the ground that the assessee failed to mention number and date of registration u/s 12AA at appropriate places in the return of income. The Ld. CIT(A) concurred with the same but observed that the return of income as well as Audit Form No.10B was filed after due date and therefore, the remedy would be to seek condonation u/s 119(2)(b). Aggrieved, the assessee is in further appeal before us.

We find that this issue is covered in assessee’s favor by the decision of Chennai Tribunal in the case of Susila Educational Trust vs ITO (167 Taxmann.com 326). This decision pertains to AY 2018-19. The bench, taking notice of CBDT Circular No.02/2018 dated 15-12-2018 and clarification vide F.No.173/193/2019-ITA-1, held as under: - 5.1 From the above communication, it is clear that CBDT has taken a conscious decision and finally agreed for the position that trust registered u/s.12AA of the Act, in order to avail the benefit of exemption u/s.11 of the Act shall inter-alia files its return of income within the time allowed u/s.139(1) of the Act. The CBDT has categorically directed the Assessing Officers and this clarification was issued to the Pr.DGIT(Systems), New Delhi that the orders issued u/s.143(1A) of the Act in the case where already disallowance were carried out, those may be rectified. Hence, the CBDT itself accepted the position that even returns filed u/s.139 is to be accepted. It means that it has enlarged its scope of section 139 of the Act, which includes provisions of section 139(4) also. Here provision of section 139(4) w.e.f. 01.04.2017 lays down that any person who has not furnished return of income within the time allowed u/s.139(1) of the Act, may furnish the return for any previous year at any time before the end of the relevant financial year or before the completion of assessment whichever is earlier. Here, in the present case, the assessee has filed return of income for the relevant assessment year 2018-19 on 09.02.2019 and here assessment year ends on 31.03.2019. It means, this return is filed within the provision of section 139(4) of the Act. In term of section 139(4) of the Act, a return filed at a belated stage but upon complying with the requirement of such provision, has to be treated as return of income. In the present case, the CBDT has already clarified vide F.No.173/193/2019-ITA-I dated 23.04.2019, which is reproduced above that the assessee is entitled for exemption u/s.11 of the Act, if such return of income is filed within the time allowed u/s.139 of the Act. It means that it covers all the provisions of section 139 of the Act and it is not limited to section 139(1) of the Act. Hence, we allow the appeal of assessee and direct the AO to allow exemption u/s.11 of the Act in this case of the assessee.

In the result, the appeal filed by the assessee is allowed. In favour of assessee. The Hon’ble CBDT thus clarified vide F.No.173/193/2019-ITA-I dated 23.04.2019 that the assessee is entitled for exemption u/s.11 of the Act, if such return of income is filed within the time allowed u/s.139 of the Act. It means that it covers all the provisions of section 139 of the Act and it is not limited to section 139(1) of the Act. We find that similar facts exist before us. Therefore, we direct Ld. AO to allow impugned deduction to the assessee. 4. The appeal stand allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.