SAMYUKTA HEALTH & ACADEMIC SOCIETY,ANAKAPALLE vs. INCOME TAX OFFICER, EXEMPTION WARD, VISAKHAPATNAM

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2022- 23/10482/12219(1), arising out of the assessment order passed by the Assessing Officer (AO) u/s 143(1) of the Income Tax Act, 1961 (in short “Act”) for the Assessment Year (A.Y.) 2020-21.

Brief facts of the case are that the assessee trust is running educational institutions and is having registration u/s 12A of the Act. During the previous year relevant to A.Y.2020-21, the assessee derived gross receipts of Rs.98,84,543/- and incurred expenditure of Rs.83,54,906/-. The assessee filed return of income for A.Y.2020-21 on 08.02.2021, after claiming exemption of the expenditure of Rs.83,54,906/- u/s 11 and accumulation of 15% of the gross receipts at Rs.14,82,681/- u/s 11(2) of the Act and admitted total income of Rs.46,960/-. The return of income was processed and the intimation u/s 143(1) of the Act was issued on 30.11.2021 by disallowing the exemption u/s 11 of the Act and the gross receipts of Rs.98,84,453/- were treated as total income of the assessee. The tax payable was computed at Rs.39,13,120/- which included interest of Rs.5,00,416/- u/s 234B and Rs.1,57,944/- u/s 234C of the Act. No reason was mentioned in the intimation for disallowing the exemption except that “no forms filed”. After receiving the intimation, the assessee filed a request on 16.12.2021 for rectification of the intimation. The rectification order was passed on 20.04.2022 u/s 154 of the Act, without allowing the exemption and the total income was determined as the same in the intimation at Rs.98,54,543/-.

On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee as the condonation petition filed by the assessee was pending before the Ld.Commissioner of Income Tax (Exemptions), Hyderabad for condoning the delay in filing Form No.10B belatedly, which was an essential prerequisite for allowing exemption u/s 11.

On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.

Ground No.1 and 6 are general in nature which does not require specific adjudication.

Ground Nos. 2 to 4 relate to disallowance of exemption claimed /s 11. The only contention of the assessee is that the assessee being a charitable trust, having registration u/s 12A of the Act is eligible for exemption u/s 11 of the Act. The Ld.AR contended that the assessee is running educational institutions and is eligible for exemption even u/s 10(23C)(iiiad) of the Act as it’s turnover did not exceed the stipulated limit. The assessee filed the return of income within the due date and also uploaded the audit report in Form No.10B along with the return of income on 08.02.2021, which should have been filed within tthe due date i.e. 15.01.2021. The assessee filed petition before the Ld.CIT(Exemptions) for condonation of the delay along with medical certificate. The Ld.AR submitted that the Secretary of the Trust who looks after the affairs of the Trust suffered from severe sciatica pain and was under treatment and bed rest during the period from 02.01.2021 to 05.02.2021. The assessee pleaded the Ld.CIT(E) to condone the delay as it was neither intentional nor deliberate. The Ld.AR, therefore, pleaded the Tribunal to set aside the order passed by the Ld.CIT(A) as the assessee is eligible for exemption u/s 11 or 10(23C)(iiiad) due to the foregoing reasons.

Per contra, the Ld.DR relied on the order of the Ld.CIT(A) and pleaded to uphold the same and dismiss the appeal of the assessee.

We have heard both the parties and perused the material placed on record. It is evident from the record that the assessee filed the return of income and uploaded Form 10B beyond the due date and accordingly filed an application u/s 119(2)(b) of the Act dated 29.11.2022 for condonation of delay for the A.Y.2020-21 before the Ld.CIT(E). It is evident from records that after careful consideration of the submissions made by the assessee, the Ld.CIT(E) vide letter DIN & Order No.ITBA/COM/F/17/2022-23/1050844096(1) dated 16.03.2023 condoned the delay in filing Form 10B for the A.Y.2020-21 as per the CBDT Circular No.16/2022 in F.No.197/89/2022-ITA-1 dated 19.07.2022. Since the delay is condoned by the Ld.CIT(E) and since the assessee is having registration u/s 12A of the Act and it’s turnover did not exceed the stipulated limit, we are inclined to remit the matter back to the file of the AO with a direction to grant exemption u/s 11 of the Act. Hence, the appeal filed by the assessee is allowed.

In the result, appeal filed by the assessee is allowed.