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Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC”, HYDERABAD
Before: SHRI LALIET KUMAR
O R D E R PER LALIET KUMAR, J.M. The appeals of the assessee for A.Ys. 2014-15 and 2015-16 arise from the order of Commissioner of Income Tax (Appeals), Addl/JCIT(A)-4, Kolkata dt.25.07.2024 invoking proceedings under section 143(1) of the Income Tax Act, 1961 (in short, “the Act”).
The grounds raised by the assessee read as under :
“1. The order of the CIT(Appeals) is contrary to the principles of equity and natural justice for the reason that the grounds of disallowance of the deductions claimed by the appellant under section 1 1 , being amount applied for charitable purpose and amount set apart for accumulation, and income claimed to be exempt u/s 10(23C)(iiiad) have not been disclosed to the appellant at appeal stage.
2. The CIT(Appeals) erred in not granting opportunity to the appellant to file and obtain the condonation for delaying in filing Form 10B for assessment year 2015-16 by applying the Circular No. 10/2019 vide F. No. 197/55/2018 & ITAT-I issued by CBDT.
3. The CIT(Appeals) erred in disallowing deductions towards the amounts applied towards charitable purposes being Rs. 1, 19,926.45 which was disallowed without stating any grounds in the original intimation under sec 143(1).
4. The CIT(Appeals) erred in disallowing deduction towards accumulation of income under sec 11 of Rs. 73,635.00 which was disallowed without stating any grounds in the original intimation under sec 143(1 5. The CIT(Appeals) erred in disallowing exemptions of income under sec 10 (23C) (iiiad) of Rs. 42,772.50 which was disallowed without stating any grounds in the original intimation under sec 143(1) without stating under any grounds.
6. The CIT(Appeals) has erred in not considering the original registration granted by CIT(Exemptions) in the year 1980 which was not cancelled and has failed to appreciate that the original registration under sec 12A granted in 1980 was still good for allowing deduction claimed by the appellant u/s 11 & 10(23C)(iiiad) as it was not cancelled.
7. The CIT appeals erred in confirming the assessment of gross income of appellant, in complete disregard of the real income theory which states that the expenditure incurred for earning income has to be allowed as deduction from the gross income earned to arrive at real income, as without incurring expenditure income will not arise.”
The brief facts of the case are that assessee is a society registered under the Society Registration Act, 1951, and has been claiming exemption under section 11 of the Income Tax Act since receiving registration under sections 12A and 80G in 1980. However, the assessee lost the original certificate and, upon advice from the Commissioner of Income Tax (Exemptions), applied for fresh registration under section 12AA in 2016. The CIT (Exemptions) rejected this application, citing incorrect reasons, including that scholarships and membership were limited to Maharashtrian women, which the assessee disputed. Despite this, the assessing officer denied the assessee’s exemption claim for the assessment year 2015-16, treating the rejection of the fresh registration as a basis for taxing the assessee's income and made addition of Rs.2,34,330/- on account of certain disallowances. Accordingly, issued intimation u/s 143(1) of the Act dt.28.08.2014.
3.1. Aggrieved with such intimation, assessee preferred appeal. During the first appellate proceedings, appellant has not filed Form No 10B and as such the claim of exemption was denied by the ld.CIT(A).
Before me, ld.AR submitted that there was delay in filing Form 10A/10AB before the first appellate authority and that the application for condonation of delay for filing Form 10A/10AB has already been filed. In view of the above, ld.AR requested to remand back the matter to the file of ld.CIT(E) to consider the application for condonation of delay in filing Form 10A/10AB while deciding the appeal.
On the other hand, the ld.DR has reported no objection for remanding the matter back to the ld.CIT(E).
I have heard the rival submissions and perused the material on record. In the present case, intimation u/s 143(1) of the Act was issued to the assessee interalia making an addition of Rs.2,36,300/-. Aggrieved with such intimation, assessee filed appeal before the ld.CIT(E), who dismissed the appeal of assessee for want of Form 10A/10AB. On perusal of the record, it came to light that assessee has already filed an application for condonation of delay in filing Form 10A/10AB before the ld.CIT(E) and in view of the same, I deem it appropriate to remand back the issue to the file of ld.CIT(E) with a direction to decide the issue afresh after condoning the delay in filing Form 10A/10AB. In case, the ld.CIT(E) has dismissed the application for condonation of delay in filing Form 10A/10AB, then the ld.CIT(E) shall pass appropriate orders in accordance with law treating that the assessee is not entitled for exemptions as claimed for.
The assessee shall be at liberty to file documents, if any, as required for proving its case and the ld.CIT(E) shall consider the evidence, if any, filed by the assessee. Needless to say the ld.CIT(E) shall examine those documents / evidence and also the other documents available on record. After considering the documents filed by the assessee and the submissions made by the assessee, the ld.CIT(E) shall pass a detailed speaking order dealing with the contentions of the assessee. Needless to say, I have not adjudicated any other ground, all the grounds are required to be adjudicated by the ld.CIT(E) in the remand proceedings. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of assessee in is allowed for statistical purposes.
9. Since the facts and issues raised in other appeal i.e. for A.Y. 2015-16 are identical to the facts and issues in for A.Y. 2014-15, our decision in ITA No.951/Hyd/2024 shall apply mutatis mutandis to . Thus, the appeal of assessee in ITA No.952/Hyd/ 2024 is allowed for statistical purposes.
To sum up, both the appeals of assessee are allowed for statistical purposes.
Order pronounced in the Open Court on 15th October, 2024.