BCDA MEMBERS BENEVOLENT TRUST,KOLKATA vs. ITO, WARD-1(2), EXEMPTION, KOLKATA

PDF · subscribers
ITA 787/KOL/2024Status: DisposedITAT Kolkata24 July 2024AY 2020-21Bench: Dr. Manish Borad (Accountant Member), Shri Sonjoy Sarma (Judicial Member)5 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that it does not have the power to condone the delay in filing returns, directing the assessee to seek condonation from the Board under Section 119(2). However, it allowed the deduction of expenditure incurred by the assessee, even if the exemption under Section 11 was denied due to late filing.

What were the facts?

The assessee, a charitable trust, filed its income tax return for AY 2020-21 with a delay of approximately 4 hours and 15 minutes due to technical difficulties and COVID-19 circumstances. The CIT(A) dismissed the appeal solely on the ground of this delay.

What were the issues?

Whether a minor delay in filing the return of income can lead to the denial of exemption/deduction for a charitable trust, and whether expenditure incurred can be allowed even if exemption is denied.

Which sections of the Income-tax Act were involved?

Section 11,Section 119(2),Section 250,Section 154,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: Dr. Manish Borad & Shri Sonjoy Sarma

order

: 24.07.2024 ORDER

Per Dr. Manish Borad, Accountant Member:

1.

This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2020-21 is directed against the order passed u/s 250 of the Income Tax Act, 1961 in short the “Act”) by ld. Commissioner of Income-tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi [in short ld. “CIT(A)”] dated 07.03.2024 arising out of the rectification order passed u/s 154 of the Act by AO, CPC dated 26.04.2022.

2.

Grounds of appeal raised by the assessee read as under:

BCDA Members Benevolent Trust “1. That the Order in Appeal passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is unlawful, unwarranted and against natural justice.

2. That your appellant submits that the Ld. CIT (A) has dismissed your appellant's Appeal Petition on the ground that your appellant is a late filer of return by 4 hours 15 minutes 53 seconds without considering the facts that last date / extended due date was 15.02.2021, despite its extensive efforts could not upload return until 04:15:53 hours on 16.02.2021, and the situation/circumstances was the COVID 19 crisis was on its full swing throughout the Globe devastating normal human life, and the disallowance thereof is unlawful, unwarranted and against natural justice.

3. Your appellant submits that in the assessment order dated 26.04.2022 passed u/s 154 and assessment order dated 24.12.2021 passed u/s 143(1) the Income Tax Act, 1961, computing total Income at Rs.3,39,03,007.13 instead of Rs. NIL as declared in the return of income filed by your appellant, and finally confirmed by the Ld. CIT (A) is unlawful. Hence, it is prayed that such arbitrary addition to the income of your appellant may please be directed to be deleted. [Relief claimed - deletion of income Rs.3,39,03,007.13] 4. Your appellant submits that when returned income of Rs. NIL was computed then imposition of Interest payable u/s 234A, 234B & 234C and Late Fee u/s 234F, totalling to Rs.39,21,275/- [Rs.1,25,967/- + Rs.31,49,175/- + Rs.6,36,133/- & Rs.10,000/-], and finally confirmed by the Ld. CIT (A) is unlawful and arbitrary and cannot be imposed separately. Hence, it is prayed that this arbitrary wrong demand of Interest and Late Fee be directed to be deleted [Relief claimed - deletion of Interest & Late Fee of Rs.39,20,275/-.

5. Your appellant submits that while processing the return of income u/s. 143(1) and u/s 154, the Learned Assessing Authority has adjusted your appellant's just and genuine claim of refund of excess amount of tax paid thorough TDS amounting Rs.3,81,712/- with unprecedented demand of tax and interest, and finally confirmed by the Ld. CIT (A) is unwarranted, unlawful and against natural justice. Hence, it is prayed that this arbitrary and wrong adjustment of TDS be directed to be deleted. [Relief claimed - issue of refund of Rs.3,81,712/-].

6. That your appellant craves leave to urge, to add, to alter, to amend or to adduce further grounds of appeal on or before the date of appeal hearing.”

3.

Though the assessee has raised as many as six grounds of appeal but only two grievances have been raised firstly, to condone the delay of 4 hours 15 minutes and 53 seconds in filing the return after the due date and secondly, even if the benefit of exemption u/s. 10(23C) of the Act is denied on account of late filing of return but the assessee is still entitled to deduction of the expenditure incurred during the year.

BCDA Members Benevolent Trust 4. On the other hand, Ld. DR supported the order of the lower authorities.

5.

We have heard the rival contentions and perused the material available on record. We observe that the assessee is a charitable trust duly registered u/s. 12A of the Act vide order dated 01.02.2001. The assessee runs educational institution. Extended due date of filing the ITR 7 for AY 2020-21 was on 15.02.2021 but the assessee has furnished return on 16.02.2021. It is claimed that there was a dely of hardly few hours in furnishing the return and the same should be condoned and deduction/exemption u/s. 11 claimed in the return should be allowed. We, however, fail to find any merit in this contention because this Tribunal does not have the power to extend the due date of filing the return of income. The remedy available with the assessee is in section 119(2) of the Act under which the assessee can file application to the Board through the jurisdictional Commissioner of Income Tax for condoning the delay and the Board may take and decision accordingly. We, however, considering the fact that the assessee has filed an application and the assessee had a reasonable cause of delay in filing the return on account of technical difficulty and also on account of Covid restriction, therefore, the concerned authority having power to condone such delay may take a lenient view and decide the fate of the assessee’s application filed u/s. 119(2) of the Act. Accordingly, the first grievance of the assessee is dismissed.

6.

As far as the second plea of the assessee that even if assessee is denied benefit of section 11 but still assessee deserves to get the deduction of expenditure incurred during the year. We find force in this plea of the assessee and it has been consistently held that even if the assessee is considered as normal assessee not eligible for exemption u/s. 11 then also any incidental expenditure incurred Page 3 of 5

More judgments on Section 11

All 7,190 judgments and leading authorities on Section 11 →

Recent GST High Court judgments

Search GST case law →