K L D A V COLLEGE,ROORKEE, HARIDWAR vs. ITO WARD 1(3)(4), ROORKEE, HARIDWAR

(ASSESSMENT YEAR 2021-22) Income Tax Officer, K L DAV College Ward-1(3)(4), Railway Road, Vs. Roorkee. Roorkee, Uttarakhand-247667 PAN-AAAAK5649L (Appellant) (Respondent) Assessee by Shri Rajiv Sahni, CA Department by Shri Aman Pal Singh, JCIT-DR Date of Hearing 07/08/2025 Date of Pronouncement 14/08/2025 O R D E R

PER MANISH AGARWAL, AM:

2. That ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/- made by assessing officer (AO) at CPC u/s 143(1)(ii) through automated process u/s 143(1) of the Income Tax Act 1961 and in passing the order without considering all the grounds of appeal as per Form KL DAV College vs. ITO 35 and written submissions dated 28.10.2024 and case laws relied upon by the appellant.

3. That ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/- made by assessing officer (AO) at CPC u/s 143(1)(ii) through automated process u/s 143(1) of the Income Tax Act 1961 without appreciating the fact that reasonable opportunity of being heard was not afforded before making adjustment u/s 143(1)(a)(ii of the Income Tax Act 1961.

4. That ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/- made by assessing officer (AO) at CPC u/s 143(1)(ii) through automated process u/s 143(1) of the Income Tax Act 1961 by applying the provisions of section 12A(1)(b) of the Income Tax Act 1961 and disallowing the exemption claimed u/s 11 of the Act without appreciating the fact that appellant has e-filed audit report in Form 10B along with updated return of income u/s 139(8A) of the Act and the same was on records at the time of assessment and furnishing of Audit report is only procedural requirement.

5. That without prejudice to the above the ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/-made by AO at CPC u/s 143(1)(ii) through automated process u/s 143(1) of the Income Tax Act 1961 by applying the provisions of section 12A(1)(b) of the Income Tax Act 1961 and disallowing the exemption claimed u/s 11 of the Act without appreciating the facts that delay in furnishing of Audit Report is condonable on reasonable cause and appellant's application for condonation u/s 119(2)(b) of the Act is yet to be decided by the competent authority.

6. That without prejudice to the above the ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/- made by AO at CPC u/s 143(1)(ii) through automated process u/s 143(1) of the Income Tax Act 1961 by applying the provisions of section 12A(1)(b) of the Income Tax Act 1961 and treating the gross receipts as Income without allowing revenue expenditures and depreciation on capital expenditures.

7. Without prejudice to the above the ADDL/JCIT has erred in law and facts in sustaining the addition for Rs. 1,82,59,837/- and Tax liability including interest and additional Income Tax at Rs. 1,61,64,410/- made by AO at CPC through automated process u/s 143(1) of the Income Tax Act 1961 by applying the provisions of section 140B of the Income Tax Act 1961 on income determined u/s 143(1) of the Income Tax Act 1961 whereas provisions of section 140B regarding additional Income Tax and interest are to be applied on income declared in the return.

KL DAV College vs. ITO 8. The appellant craves permission to elucidate, add, amend, modify, delete any ground or grounds of appeal before the disposal in the interest of substantial justice.

9. It is therefore prayed that the appeal may kindly be accepted as prayed above or any other relief to which the appellant may be found entitled may kindly be granted.”

3. All these grounds of appeal are revolving issue of not allowing the exemptions u/s 12A for the sole reason that the audit report was not filed within the statutory timeline.

4. In this regard, the Ld. AR of the assessee submitted that the assessee was granted provisional registration u/s 12A(1)(ac)(vi) as a charitable society on 02.06.2022 and granted permanent registration u/s 12A(1)(ac)(iii) for Ayrs. 2023-24 to 2027-28 on 13.07.2023. Thereafter, vide intimation dt. 29.12.2023, the CPC has not granted the benefit of section 12A for the sole reason that the audit report in form 10B was filed delayed alongwith the updated return and was available with the CPC at the time of passing of the order u/s 143(1) of the Act. It is submitted by the ld. AR that there is no doubt about the charitable activities carried out by the assessee society. Ld. AR that the exemption u/s 11 was mainly disallowed by the CPC on the basis of belated filing of audit report in Form 10B. It is further submitted by Id. AR that it is true that Form 10B could not be furnished one month prior to the due date for furnishing of return u/s 139 but the same was furnished later and when the return was processed, Form 10B was available with CPC. Therefore, the CPC was not justified in rejecting the claim of the assessee u/s 11 of the IT Act merely on the basis of belated filing of Form 10B. In support of this KL DAV College vs. ITO contention, reliance is placed on the decision of Co-ordinate Bench of Ahmedabad Tribunal in the case of Shiksha Foundation vs. ITO in wherein vice order dated 14.06.2024 the Co- ordinate Bench of the Tribunal has allowed the appeal of the assessee. Relaince is also placed on the decision of the Co-ordinate Mumbai Bench of the Tribunal in case ITO vs. P. K. Krishnan Educational Trust in ITA No.3533/Mum/2023 wherien vide order dated 07.05.2024 the appeal was allowed in favour of the assessee by condoning the delay caused in filing of Form 10B. Accordingly, ld. AR requested to allow the exemption u/s 12A to the assessee.

5. On the other hand, Ld. DR vehemently supported the orders of the lower authorities and requested to confirm the same as the assessee has failed to file the audit report as prescribed under the Act within the stipulated time period. According to the ld. CIT-DR it is the condition precedent to claim exemption u/s 12A and failing which assessee is not entitled for the exemption. He prayed accordingly.