DCIT(EXAM),CIR-1(1), KOLKATA V. G.D. CHARITABLE SOCIETY , MURSHIDABAD

ITA 291/KOL/2023

AI Insights

The case involves the DCIT(Exemption), Circle-1(1), Kolkata as the appellant and G D Charitable Society as the respondent. The dispute arose from the disallowance of Rs. 11,06,61,401/- by the DCIT under section 143(1) of the Income Tax Act, 1961, due to the non-filing of Form 9A by the due date, which led to the denial of exemption under section 11(1). The Ld. CIT(A) allowed relief to the assessee based on Circular No. 30/2019, which the Revenue contested, arguing that the CIT(A) lacked the jurisdiction to condone the delay in filing Form 9A. The ITAT examined the powers conferred by the circulars and the relevant sections of the Income Tax Act, ultimately deciding that the CIT(A) overstepped his jurisdiction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33198 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Other Referred Cases: Loyola High School Vs. ITO (Exemption), Kolkata
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Reasonable cause; Charitable institution
• Section: 250; 143(1); 11; 139(1); 119(2)(b)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH KOLKATA SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 291/Kol/2023 Assessment Year: 2017-18 DCIT(Exemption), Circle-1(1), Kolkata, 5th Floor, 10B, Middletown Row, Kolkata - 700071 .....................…...…………….... Appellant vs. G D Charitable Society, PO- Aurangabad, Murshidabad - 742201 [PAN: AAATG6148B] ...............…..….................... Respondent Appearances by: Assessee represented by : Ashim Kumar Panda, Advocate : Somnath Ghosh, Advocate Department represented by : P.N. Barnwal, CIT-DR Date of concluding the hearing : 02.01.2025 Date of pronouncing the order : 08.01.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This appeal filed by the Revenue is against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18, dated 31.03.2023. 1.1 The impugned order deals with an order u/s 143(1) of the Act through which a disallowance of Rs. 11,06,61,401/- was made on account of the assessee not filing form 9A before the due date. Because of the non-filing of the said Form the exemption u/s 11(1) of the Act was denied. The Ld. CIT(A) was persuaded by the terms of Circular No. 30/2019 (F. No. 2 ITA No. 291/Kol/2023 G D Charitable Society AY: 2017-18 197/55/2018-ITA-1] dated 17.12.2019 to understand that he had the powers to condone the said delay in filing of Form No. 9A and on that assumption he has proceeded to allow relief to the assessee. 2. Aggrieved with this action, the Revenue has come in deal with the following grounds: “1. Whether on the facts and circumstances of the case, the CIT(A) has erred by allowing the assessee's appeal deleting the adjustment made u/s 143(1) on account of deemed application of income of Rs. 11,06,61,401/- as per clause (2) of Explanation to section 11(1) despite the facts that statutorily requirement of filling the form no- 9A before the expiry of time allowed u/s 139(1) of the Act had not fulfilled by the assessee trust. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A)has erred in facts by allowing exemption claimed in ITR filed for the A. Y. 2017-18 by the assessee despite the fact that there is no order u/s 119(2)(b) of the Act condoning the delay infilling Form No. 9A by the CIT(E). 3. Whether on the facts and circumstances of the case, the Ld. CIT(A)has erred by allowing the assessee's appeal without appreciating the fact that there are complete mismatch in facts and figures of application/deemed application of income amongst ITR, Audit Report and Form 9A. 4. Whether on the facts and circumstances of the case, the Ld. CIT(A)has erred by allowing the assessee's appeal without going into the complete facts of the case and relying on the CBDT Circular No.7 of 2018, dated 20th December, 2018 and CIRCULAR NO. 30/2019 despite that the CBDT has only authorized the Commissioner of Income Tax to admit the condonation application for delay in filling form no- 9A and dispose it on merits. 5. Whether on the facts and circumstances of the case, the Ld. CIT(A)has erred by dismissing the adjustment made u/s 143(1) of the Act. 6. That further ground or grounds of appeal may be submitted on or before the date of hearing.” 2.1 This matter was argued over the span of two dates. The Ld. AR vehemently argued that the Circular No. 7/2018 dated 20.12.2018 and the subsequent Circular No. 6/2020 dated 19.02.2020 allows the Commissioner of Income Tax to condone the delay and the Ld. CIT(A) has done exactly that. The Ld. AR also relied on a Co-ordinate Bench decision in the case of Loyola High School Vs. ITO (Exemption), Kolkata, ITA No. 472/Kol/2022 dated 20.03.2024, in which the Circular No. 6/2020 (supra) 3 ITA No. 291/Kol/2023 G D Charitable Society AY: 2017-18 has been relied on to grant relief by condoning the delay in filing Form 9A/10 as under: “16. On due consideration of the above facts and circumstances, we are of the view that the claim of the assessee falls within the ambit of Circular issued by the CBDT and it is to be construed that the delay in filing the return is to be condoned and if the delay in filing the return is condoned, then, the assessee would fulfil all ingredients of section 11(2) for claiming accumulation. In other words, it has filed form 10 within due date of filing return u/s 139(1). This is the first condition. The second condition is that return should be filed within due date u/s 139(1). This delay stands condoned by the above Circular. Therefore, it is to be treated in time. This exhibits that both conditions are fulfilled. Therefore, accumulation is to be allowed. In view of the above, appeal of the assessee is allowed. The Id. Assessing Officer is directed to give benefit under section 11(2) of the Act to the assessee of accumulated funds submitted in Form No. 10.” 2.2 Per contra, the Ld. DR argued that the powers given for condoning the delay have been specifically conferred upon the Administrative Commissioners or Commissioner (Exemptions). The Ld. AR read out the relevant portions from Circular No. 7/2018 (supra) and 6/2018 (supra) to emphasise the point that condonation of delay was not within the purview of appellate authorities but was within the exclusive purview of administrative authorities only. 3. We have heard the argument from both the sides and also perused the two departmental circulars (supra) and the ITAT’s order in the case of Loyola High School (supra) to appreciate the mandate conferred on income tax authorities. It would be necessary to extract relevant portions from the said circulars as under: Circular No. 7/2018 A dated 20.12.2018 “4 Representations have been received by the Board/ field authorities stating that the Form No. 9A and Form No.10 could not be filed in the specified time for AY 2016-17, which was the first year of e-filing of these forms. It has been requested that the delay in filing of Form No. 9A and Form No.10 for AY 2016-17 may be condoned under section 119(2) (b) of the Act. 5. Accordingly, in supersession of earlier Circular/Instruction issued in this regard, with a view to expedite the disposal of applications filed by trusts for condoning the delay and in exercise of the powers conferred under section 119(2)(b) of the Act, the Central Board of Direct Taxes hereby authorizes the Commissioners of Income-tax, to admit belated applications in Form No. 9A and Form No.10 in respect of AY 2016-17 4 ITA No. 291/Kol/2023 G D Charitable Society AY: 2017-18 where such Form No. 9A and Form No.10 are filed after the expiry of the time allowed under the relevant provisions of the Act 6. The Commissioners will, while entertaining such belated applications in Form No. 9A and Form No.10, satisfy themselves that the assessee was prevented by reasonable cause from filing of applications in Form No. 9A and Form No.10 within the stipulated time. Further, in respect of Form No. 10 the Commissioners shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in sub-section (5) of section 11 of the Act Circular No. 6/2020 dated 19.02.2020 “2. Accordingly, in continuation of earlier Circulars issued in this regard, with the view to prevent hardship to the assessee and in exercise of powers conferred under section 119(2)(b) of the Act, the CBDT has decided that where the application for condonation of delay in filing Form 9A and Form 10 has been filed, and the Return of Income has been filed on or before 31st March of the respective assessment years i.e. Assessment Years 2016-17, 2017-18 and 2018-19, the Commissioners of Income-tax (Exemptions) are authorised u/s 119(2)(6) of the Act, to admit such belated applications for condonation of delay in filing Return of Income and decide on merit. 3. For all other application for condonation of delay not mentioned above, the power of condonation of delay u/s 119(2)(b) of the Act will continue with the respective authorities as per the extant Rules and Practice.” 3.1 It is clear from a plain reading of the said circulars that to avoid hardship to charitable institutions, the CBDT has conferred the powers on Administrative Commissioners, including Commissioners (Exemptions), to condone the delay in filing Form 10 and Form 9A, after being satisfied about the reasons for the delay. Importantly, this power has not been granted to Appellate Commissioner or any other appellate authorities as part of their quasi-judicial Function. Accordingly, the assumption of powers to grant such relief to an assessee cannot be usurped by quasi- judicial functionaries. Accordingly, respectfully differing from the order given in the Loyola High School case (supra) by the Co-ordinate Bench of ITAT, it deserves to be held that the Ld. CIT(A) fell in error in assuming that he had the power to condone the delay and thereby directed for relief. Even at the expense of over emphasis it needs to be mentioned that something that is not specifically written in the Circulars, or mandated by them, cannot be presumed to exist in as much as the appellate authorities cannot 5 ITA No. 291/Kol/2023 G D Charitable Society AY: 2017-18 be vested with powers which are exclusively meant for the administrative domain. Accordingly, the impugned order is set aside as being without jurisdiction. 4. Before parting with this issue, it needs to be mentioned that the assessee is not without any remedy and he is free to exercise his judgement and consider approaching the Administrative Commissioner concerned for condonation of delay in terms of a conjoint reading of Circulars 7/2018 and 6/2020 (supra). 6. In the result, the appeal filed by the Revenue is allowed. Order pronounced in the court on 08.01.2025 Sd/- Sd/- (Duvvuru RL Reddy) (Sanjay Awasthi) Vice President Accountant Member Dated: 08.01.2025 AK, P.S. Copy of the order forwarded to: 1. G D Charitable Society 2. DCIT(Exemption), Circle-1(1), Kolkata 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "