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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI MANOJ KUMAR AGGARWAL
अपीलाथ� क� ओर से/ Appellant by : Mr. S. Sridhar, Adv. (Erode) ��यथ� क� ओर से /Respondent by : Ms. R. Anita, Addl.CIT सुनवाईक�तारीख/Date of Hearing : 30.07.2024 घोषणाक�तारीख /Date of Pronouncement : 18.09.2024 आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee Trust against the order of the Learned Commissioner of Income Tax (Appeal), Addl./JCIT (A)-3, Delhi, (hereinafter in short "the Ld.CIT(A)”), dated 29.02.2024 for the Assessment Year (hereinafter in short "AY”) 2022-23.
The grounds of appeal raised by the assessee are as under:
1) The Impugned Order is illegal, null and void. 2) The Learned Commissioner (Appeals) erred in not considering that filing of Form No 10B within the prescribed time is only directory and not mandatory, when the Appellant is otherwise eligible for the Exemption provided u/s.11 and 12 of the Act.
3) Without prejudice, the disallowance of the claim of exemption towards Rs.99,00,000/- is unjustified and unfair, given that the Condonation Application filed by the Appellant under Sec. 119(2)(b) is pending before the Chief Commissioner of Income Tax, Coimbatore.
And, for other reasons that may be adduced later, the Appellant humbly prays that the present appeal be admitted, considered and justice rendered.
The brief facts are that the assessee is a Trust which was enjoying provisional registration u/s.12A of the Income Tax Act, 1961 (hereinafter in short "the Act”) and filed its ITR for AY 2022-23 on 08.10.2022 [within the time prescribed u/s.139(1) of the Act]. However, since the Audit Report in Form 10 AB was filed on 22.10.2023, and it had to be filed one month before the time allowed for filing of ITR u/s.139(1) of the Act, the claim for deduction u/s.11 of the Act was disallowed and consequently, the total receipt of the Trust to the tune of Rs.1,29,72,526/- was added against returned income of Rs.1,52,135/- by the CPC by an intimation u/s.143(1) of the Act dated 04.04.2023.
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)
who allowed expenditure claimed to the tune of Rs.29,20,391/-.
However, sustained the addition of Rs.99,00,000/- made by the CPC u/s.143(1) of the Act by holding as under:
The section 12A(1)(b) as reproduced earlier made it clear that where total income of trust or institution without giving effect to provision of section 11 & 12 exceed maximum amount which is not chargeable to tax, the accounts are required to be audited before due date. Therefore, the appellant cannot be allowed the benefit of section 11 which includes section 11(5). Therefore, the receipt through corpus donation is chargeable to tax as per the provision of section 2(24)(iia) and benefit of section 11 is not allowable. The case laws relied upon by appellant are in respect of revenue receipt and expenditure. The investment made as per section 11(5) is not an expenditure but a specified mode as per section 11.
In view of above, the addition of Rs. 99,00,000/- made by CPC u/s 143(1) is confirmed and this ground of appeal is rejected. 5. Aggrieved, the assessee is in appeal before this Tribunal.
We have heard both the parties and perused the material available on record. We note that the assessee Trust had filed its return of income for AY 2022-23 on 08.10.2022 u/s.139(1) of the Act. However, it failed to file Audit Report within the time prescribed and filed the same (Form 10AB) belatedly on 22.10.2023. Therefore, the CPC has added the entire receipt of the Trust as its income u/s.143(1) of the Act. On appeal, the Ld.CIT(A) has granted partial relief by allowing the expenditure claimed to the tune of Rs.29,20,391/-, but sustained the addition of Rs.99,00,000/-.
Against belated filing of Audit Report, it has been brought to our notice that assessee has duly filed an application for condonation of delay u/s.119(2)(b) of the Act on 01.07.2024 before the Ld. Chief Commissioner of Income Tax, Delhi. It is noted that the assessee filed its return of income on 08.10.2020 i.e. within the due date [the date extended for filing of the return was up to 07.11.2022 while that of filing Form 10AB as per clause (ii) of sec.44AB of the Act, was one month prior to the due date u/s.139(1) of the Act, which in this case was 07.10.2022], copy of the ibid application for condonation of delay in filing of Form 10AB has been placed on record. In such a scenario, the Ld.AR pleaded that the appeal may be restored back to the file of the Ld.CIT(A)/JAO and direct the First Appellate Authority to keep the appeal/assessment in abeyance till the disposal of the condonation application by the Chief Commissioner of Income Tax who has been delegated powers by the CBDT to condone the delay in filing of Form 10AB. We note that the Ld.CIT(A) has sustained addition which was the corpus-donation received by the assessee to the tune of Rs.99 lakhs, since the assessee didn’t file the Audit Report within the due date. Since the assessee has filed the condonation application before the competent authority, for the ends of justice and fair play, we set aside the impugned order of the Ld.CIT(A) and restore the appeal back to his file with a direction to await the decision of the competent authority/Ld.CCIT on the condonation application filed by the assessee (supra) [viz to condone the delay in filing of Audit Report], and till such time this appeal may be kept in abeyance and once he receive the order of the Ld. CCIT on the condonation application filed by the assessee, the Ld CIT(A) to pass the order on merits on the grounds of appeal in accordance to law after hearing the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 18th day of September, 2024, in Chennai.
Sd/- Sd/- (मनोज कुमार अ�वाल) (एबी टी. वक�) (MANOJ KUMAR AGGARWAL) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER