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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 12.09.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”], which in turn arises out of rectification-order dated 27.06.2022 passed by learned ITO, Exemption, Bhopal [“AO”] u/s 154 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on the grounds as mentioned in Appeal-Memo (Form No. 36).
Ld. AR for assessee explained the factual background leading to this appeal at length with the support of documents submitted at the time of Sugam Informatics Society Samiti, Bhopal AY 2015-16 filing of present appeal and further submitted in Paper-Book. We would like to mention the crux of relevant facts. The assessee is a society claimed to be entitled for exemption u/s 10(23C)(iiiad). For the relevant AY 2015-16, its gross-receipts, expenses and net surplus were Rs. 5,00,475/-, Rs. 4,19,203/- and Rs. 81,272/- respectively. The assessee e-filed its return of income u/s 139(4) on 08.02.2016 vide Acknowledgement No. 947641310080216 declaring a total income of Rs. 81,272/- [This return shall hereafter be referred as “1st Return”]. The Acknowledgement is titled and called as “ITR-V” by Income-tax Department. In terms of para 9 of CBDT Circular No. 03/2009 dated 21.05.2009, after e-filing of return, the assessee was required to submit a print-out of ITR-V to CPC, Bangalore within 30 days. The CBDT Circular makes it clear in the very same para 9 that “In case, Form ITR-V is furnished after the above mentioned period, it will be deemed that the return in respect of which the Form ITR-V has been filed, was never furnished and it shall be incumbent on the assessee to electronically re-transmit the data and follow it up by submitting the new Form ITR-V within 30 days.” The time-limit of 30 days was, however, extended to 120 days vide CBDT Press Release dated 27.01.2010. Thus, the assessee was required to submit ITR-V by 07.06.2016 (08.02.2016 + 120 days). But the assessee filed ITR-V on 08.06.2016 which was beyond the last date of 07.06.2016 by 1 day. Thus, non-filing of ITR-V within 120 days made the assessee’s return as ‘invalid’ being deemed to have been never filed. Therefore, as required by Para 9 of CBDT Circular aforesaid, the Sugam Informatics Society Samiti, Bhopal AY 2015-16 assessee e-filed a new return on 04.03.2017 vide Acknowledgement No. 644490700040317 declaring a total income of Rs. Nil after claiming exemption u/s 10(23C)(iiiad) [This new return shall hereafter be referred as “2nd Return”]. However, the CPC, Bangalore processed 1st return u/s 143(1) vide intimation dated 27.03.2017 assessing the gross-receipts of Rs. 5,00,475/- itself as total income. Aggrieved, the assessee filed rectification- application u/s 154 on 05.03.2022. But, however, the AO rejected assessee’s application vide order dated 29.04.2022. Aggrieved by such order of AO rejecting assessee’s application u/s 154, the assessee approached CIT(A) by way of first-appeal and made submission. But the CIT(A) also dismissed assessee’s appeal and did not grant any relief. Now, the assessee has come before us in next appeal.
Having submitted thus, Ld. AR explained that the 1st return filed by assessee on 08.02.2016 was clearly invalid since the ITR-V was not filed within 120 days. Therefore, the assessee was required to file return afresh which assessee filed on 04.03.2017. Thus, the 1st return had become non- est and it is the 2nd return which was a valid return in the eyes of law.
Despite this, the CPC picked 1st return, processed same and issued intimation u/s 143(1) dated 27.03.2017. Ld. AR submitted that when the 1st return was invalid, the CPC had no authority to process the same u/s 143(1). Therefore, the intimation u/s 143(1) issued by CPC was invalid. This proposition is also fortified by the decision of ITAT, Cuttack in Rajdhani
Sugam Informatics Society Samiti, Bhopal AY 2015-16 Institute of Information Technology Vs. CIT(A), NFAC, order dated 14.12.2022 where it was held thus:
5. We have considered the rival submissions. A perusal of the communication dated 21.08.2015 issued to the assessee clearly shows that the CPC has issued the notice u/s 139(9) of the Act intimating defects in the return. In the notice, it has been categorically mentioned that if the defects were not removed, the return filed by the assessee would be treated as invalid return. Admittedly, the assessee has not rectified the defects. Consequently, the return filed by the assessee is liable to be treated as invalid return. Once the return filed by the assessee is treated as invalid return, intimation u/s 143(1) of the Act issued on the said return on 14.03.2016, admittedly, is invalid and consequently the same stands quashed.
Then, Ld. AR made a further submission that the 2nd return filed by assessee was a valid return and the CPC should have processed this return vide aforesaid intimation u/s 143(1) dated 27.03.2017. Since the CPC has not done so, Ld. AR prayed the Bench to direct the CPC to process the 2nd return filed by assessee.
Ld. AR, however, submitted that the assessee has made two errors while filling details in 2nd return. These errors are as under:
(i) The first error is such that the assessee developed a genuine understanding, though it was a mis-understanding, that the 2nd return must be filed as a “revised return”, therefore the assessee selected “revised return u/s 139(5)” option while filing return.
However, the correct position would be that since the 1st return became invalid, the 2nd return would not be a “revised return”, it would be an original return, of course a belated return u/s 139(4). Ld.
AR carried us to the provision of section 139(4) as applicable to AY
Sugam Informatics Society Samiti, Bhopal AY 2015-16
2015-16 under consideration according to which a belated return u/s 139(4) could be submitted upto 1 year from end of the relevant assessment-year. Therefore, the assessee could very well file a belated return u/s 139(4) upto 31.03.2017 for AY 2015-16. Hence, the 2nd return filed on 04.03.2017 was a belated return u/s 139(4) but not a revised return u/s 139(5). Therefore, the assessee’s bona fide mistake of selecting “revised return” instead of “belated return u/s 139(4)” must be excused.
(ii) The second error is such that the assessee has correctly filled the details of the project run by it eligible for exemption u/s 10(23C)(iiiad) under the space titled “PERSONAL INFORMATION” on Page No. 1 of the return, as under:
Sl. Name of the Nature of Classificatio Approval/Notificat Approving/registe Section under project/institution activity n code ion/Registration ring Authority which exemption No. claimed, if any (see No. instruction para (see (see 11e) instructions instructions para 11d) para 11d)
SUGAM Charitable Education N.A. N.A. Section INFORMATICS 10(23C)(iiiad) SOCIETY
But, thereafter, in the space titled “OTHER DETAILS” on the very same page of return, the assessee has mistakenly mentioned “No” against “B – University/Educational Institution/Hospital/Other
Institution eligible for exemption u/s 10(23C)(iiiad) and 10(23C)(iiiae)”.
Ld. AR submitted that AY 2015-16 was the initial period when e-filing
Sugam Informatics Society Samiti, Bhopal AY 2015-16 of return was made mandatory for assessees claiming exemption u/s 10(23C)(iiia) and therefore this mistake has occurred.
Ld. AR submitted that aforesaid errors have occurred because of genuine/inadvertent mistakes. But the fact is that the assessee has filed original return u/s 139(4) and the assessee is also eligible for exemption u/s 10(23C)(iiiad). Therefore, the benefit of exemption to which the assessee is entitled, should not be denied for these errors and necessary direction be given to the AO in this regard.
Ld. DR for revenue could not point out any deficiency in the factual submissions made by Ld. AR. He was fair enough in leaving the matter for adjudication as per judicious wisdom of Bench.
We have considered submissions of both sides and also perused the documents held on record including the orders of lower-authorities as well as the documents filed in the Paper-Book to which our attention has been drawn. We have already mentioned the undisputed factual aspects and submissions of parties in foregoing paragraphs, hence we would not like to repeat the same for the sake of brevity. We only suffice to mention that the 1st return filed by assessee was an invalid return because of non-filing of ITR-V within prescribed period of 120 days. Therefore, the intimation dated 27.03.2017 issued by CPC on the basis of said return was also invalid.
Since the assessee had already filed 2nd return on 04.03.2017 which was a valid return u/s 139(4) and which was available in the departmental
Sugam Informatics Society Samiti, Bhopal AY 2015-16 database on 27.03.2017 at the time of processing u/s 143(1), the CPC ought to have taken into consideration the 2nd return and subject it to processing. Therefore, we set aside the order passed u/s 154 and 143(1) and remand the matter to the record of the AO to verify and examine the relevant record and then consider the claim of assessee u/s 10(23C)(iiiad) of the Act. Before passing order, the assessee shall be given an appropriate opportunity of hearing.
Resultantly, this appeal is allowed in terms mentioned above.
Order pronounced in open court on 09.02.2024.