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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member
ITA No. 187/Ahd/2024 Assessment Year 2020-21 Jan Kalyan Trust The Income Tax 19B, Parul Nagar Officer, Bhuyangdeo Char Rasta Vs Ward-1 (Exemptions), Ghatlodia, Ahmedabad, Ahmedabad Gujarat-380061 PAN: AAATJ3952G (Respondent) (Appellant) Assessee Represented: Shri Chirag Shah, A.R. Revenue Represented: Shri Santosh Kumar, Sr.D.R. Date of hearing : 28-05-2024 Date of pronouncement : 19-06-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 09.01.2024 passed by the Additional Commissioner of Income Tax (Appeals)-2, Jaipur arising out of the Intimation passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) denying benefit of Section 11 of the Act, on the ground of late filing of Form 10B relating to the Assessment Year 2020-21.
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The brief facts of the case is that the assessee is a Trust registered u/s 12AB of the Act. For the Asst. Year 2020-21, assessee filed its Return of Income along with Form 10B on 30.03.2021 which is after the extended due date for filing the return for the Asst. Year 2020-21 namely 15.02.2021. The assessee was denied the benefit of Section 11 of the Act since Form 10B which ought to have been filed on 15.01.2021 but the same was filed on 30.03.2021 thereby disallowing the claim of expenditure amounting to Rs.15,13,867/- as the income of the assessee.
Aggrieved against the same, assesse filed an appeal before Commissioner of Income Tax (Appeals). The appeal was rejected on the ground that Ld. CIT(A) has not been empowered u/s 119(2)(b) of the Act to condone the delay in filing Form 10B beyond the period of limitation.
Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The assessment order passed u/s 143(1) of Income Tax Act by the Assessing Officer and confirmed by the first appellate authority u/s 250 is bad in law and deserved to be uncalled for. 2. The assessing officer as well as first appellate authority has erred in law and on facts in making and confirming respectively the disallowance of expenditure of Rs.15,13,867/-. The same deserved to be deleted. 3. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing 5. We have given our thoughtful consideration and perused the materials available on record. The moot question whether it is permissible to the assessee to produce the audit report after the
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due date is correct in law is been decided by the Jurisdictional High Court in the case of CIT Vs. Gujarat Oil & Allied Industries Ltd. [1993] 201 ITR 325 (Guj.) wherein it is held that the provisions regarding furnishing of audit report along with the return has to be treated as a procedural provision. It is directory in nature and its substantial compliance would suffice. Thus the Hon’ble Court Held that the benefit of exemption should not be denied merely on account of delay in furnishing the same.
5.1 Similarly in the case of Social Security Scheme of GICEA-Vs- CIT(E) (2023) 147 taxmann.com 283 (Guj.) wherein it is held that the assessee trust substantially satisfied conditions for availing exemption u/s. 11, it should not be denied exemption merely on bar of limitation especially when legislature had conferred wide discretionary powers to condone such delay in filing Audit Report in Form No. 10B. The Hon’ble Jurisdictional High Court held as follows: 5. “…..the only question which falls for consideration is whether respondent committed an error in passing the order by not condoning the delay in filing Form No. 10B along with the return filed. In the decision of this Court in Sarvodaya Charitable Trust (supra) this Court has observed that furnishing of audit report along with return filed is to be treated as a procedural requirement. It is though mandatory in nature the substantial compliance is required to be made. In the case of Sarvodaya Charitable Trust (supra) the assessee had produced the audit report after processing the return under section 143(1). This Court in the said order has observed that the approach of the authority in these type of cases should be equitable, balancing and judicious. Technically speaking, respondent No. 2 might be justified in denying the exemption under section 11 of the Act by rejecting such condonation application, but an assessee, which is a public charitable trust for past 30 years which substantially satisfies the conditions for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay. Applying the said principle, the petition is allowed. The impugned order passed by respondent dated 12-3-2021 is quashed and aside. The impugned order of rectification under section 154 of the Act dated 25-1-2019 is also quashed and set aside. The application for condonation of delay filed by the petitioner before the respondent is allowed.
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The respondent is now directed to process the return in accordance with law. It is noticed that no assessment is framed and only an intimation under section 143(1) of the Act was issued. No scrutiny could be carried out by the respondent since the audit report under section 10B was not on record. Learned advocate for the petitioner Mr. B.S. Soparkar fairly submitted that the issue of benefit of exemption may be examined by issuance of notice u/s 143(1)/143(2) and the petitioner shall not object to the said proceedings by taking the ground of limitations.” 6. Respectfully following the above judicial precedent, we hereby condone the delay in filing Form 10B and direct the Jurisdictional Assessing Officer to verify Form 10B and allow the claim of exemption u/s 11 of the Act and compute the total in accordance with the provisions of law.
In the result, the appeal filed by the Assessee is allowed for statistical purpose.
Order pronounced in the open court on 19-06-2024 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 19/06/2024 TRUE COPY आदेश की प्रितिलिप अग्रेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद