CHANDI KARAKHANDAR ASSOCIATION,KOLHAPUR vs. INCOME TAX OFFICER, EXEMPTION, KOLHAPUR, KOLHAPUR

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ITA 295/PUN/2024Status: DisposedITAT Pune16 May 2024AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)5 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the lower authorities did not properly consider the mitigating circumstances for the delay in filing Form 10B and added entire receipts without computing income on a net basis. It noted that the condition of filing Form 10B is not always mandatory for claiming exemption under Section 11.

What were the facts?

The assessee, a trust, appealed against the disallowance of expenses and addition of entire receipts. This was based on the delay in filing Form 10B for the assessment year 2017-18.

What were the issues?

Whether the delay in filing Form 10B should lead to the disallowance of expenses and addition of entire receipts, and if the condition of filing Form 10B is mandatory for Section 11 exemption.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(1)

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Income Tax Appellate Tribunal, PUNE “SMC” BENCH : PUNE

Before: SHRI SATBEER SINGH GODARA

Hearing: 22.03.2024Pronounced: 16.05.2024

Date of Hearing : 22.03.2024 Date of Pronouncement : 16.05.2024 ORDER

This assessee’s appeal for assessment year 2017-18, arises against the Addl./JCIT(A)-4, Delhi, Delhi’s Din and Order No.ITBA/APL/S/250/2023-24/1058853900(1), dated 18.12.2023, in proceedings u/s.143(1) of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties. Case file perused.

2.

The assessee pleads the following substantive grounds in the instant appeal :

1) “The learned CIT(A) erred in confirming the addition of Rs.10,39,011/- disallowing the entire amount of expenses

2 ITA.No.295/PUN./2024 incurred for the purpose of the activities to be carried out

2) The learned CIT(A) erred has confirmed the addition on the basis that, Form 10B of the Trust for the year under consideration was not filled within time as laid down in the Act.

3) The learned CIT(A) has completely ignored several case laws where in multiple High Courts have allowed Form

10B to be filed up to the completion of the assessment or during any proceedings.

4) The appellant request your honour to kindly delete the addition made by the learned CIT(A) on account of non- filling of audit report in form 10B and allow the benefit of deduction u/s 11 of the Act and oblige.

5) The appellant craves leave to add, alter, amend, or delete any of the above grounds of appeal.”

3.

Both the learned representatives next invited my attention to the impugned lower appellate discussion declining the assessee’s appeal reads as under :

3 ITA.No.295/PUN./2024

4.

Learned counsel vehemently argued during the course of hearing that the lower appellate authority herein has erred in law and on facts not only in refusing to condone delay in submission of form 10B/audit report and also, it’s entire receipts have been added without giving credit of the corresponding expenditure incurred therein.

5.

The Revenue on the other hand vehemently submitted that this is an instance of sec.143(1)intimation

4 ITA.No.295/PUN./2024 wherein the learned lower appellate authority has even questioned the corresponding lower appellate order dated 09th March, 2019 vis-à-vis the one dated 23.11.2021 (supra).

6.

I have given my thoughtful consideration to the foregoing vehement rival submissions and find no reason to accept either parties stand in entirety at this stage. This is for the precise reason that the learned lower authorities have not given due consideration to the relevant mitigating circumstances resulting in delay in submission of form 10B and they have also assessed it’s entire receipts without computing the income, without prejudice to the foregoing first issue, on netting basis. Case law M/s. Social Security Scheme of GICEA vs. CIT(E) [2023] 147 taxmann.com 283 (Guj.) has already held the above form 10B conditions as not mandatory in nature for the purpose of claiming sec.11 exemption. Faced with this situation, I hereby restore the assessee’s instant appeal back to learned Assessing Officer for his afresh appropriate adjudication within three effective opportunities of hearing in consequential proceedings at assessee’s risk and responsibility. Ordered accordingly.

7.

This assessee’s appeal is allowed for statistical purposes in above terms.

5 ITA.No.295/PUN./2024 Order pronounced in the open Court on 16.05.2024.

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