GUJARAT TECHNOLOGICAL UNIVERSITY,AHMEDABAD, GUJARAT V. COMMISSIONER OF INCOME TAX, EXEMPTION, AHMEDABAD, GUJARAT

ITA 935/AHD/2024

AI Insights

The case involves Gujarat Technological University (Appellant) appealing against the order of the Commissioner of Income Tax (Exemption), Ahmedabad (Respondent), which revised the assessment for the Assessment Year 2017-18 under Section 263 of the Income Tax Act, 1961. The primary issue was the denial of exemption under Section 11 due to the late filing of Form 10B, which was filed after the assessment order was passed. The Tribunal examined whether the procedural lapse of late filing of Form 10B, without any substantive prejudice to the Revenue, justified the denial of exemption under Section 11.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126838 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Brahmchari Wadi Trust vs. Commissioner of Income-tax (Exemption), Shri Parshwanath Bhakti Vihar Jain Trust vs. Commissioner of Income-tax (Exemption), Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), Vardhman Stanakvasi Jain Shravak Trust vs. Income-tax Officer, Shiksha Foundation vs. Income Tax Officer (Exemption), Shree Jain Swetamber Murtipujak Tapagachha Sangh v. CIT (Exemptions), Social Security Scheme of GICEA v. CIT (Exemptions), Jt. CIT (OSD) v. Gujarat Energy Development Agency
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. NANDAKUMAR
• Assessee Lawyers: AMRIN PATHAN
• Keywords: Reassessment proceedings; Charitable institution; Revision of order; Benefit of exemption; Procedural lapse; Grounds of appeal; Non-filing of Form 10B; HRA; Commissioner; Auditor's report; Commissioner of Income Tax; AMP; Section 143(1) of the Act; Exempt; Gujarat High Court; Due date of filing; Explanation; Allowability; Delay in filing Form No. 10B; Commissioner of Income Tax (Exemptions); Bona fide; No prejudice
• Section: 147; 148; 144; 201; 154; 143(1); 263; 11; 12AA; 12; 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.935/Ahd/2024 (Assessment Year: 2017-18) Gujarat Technological University, 2nd Floor, Jacpc Building, LD Engineering Campus Gulbaitekra, Ahmedabad-380015 Vs. Commissioner of Income Tax (Exemption), Ahmedabad [PAN No.AAALG1109L] (Appellant) .. (Respondent) Appellant by : Ms. Amrin Pathan, A.R. Respondent by: Shri V. Nandakumar, CIT DR Date of Hearing 09.04.2025 Date of Pronouncement 22.04.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemptions), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 06.03.2024 passed for A.Y. 2017-18. 2. The Assessee has taken the following grounds of appeal:- “Invalid Revision Proceedings u/s 263: 1. The learned CIT(Exemption), Ahmedabad (\"the CIT(E)\") erred in fact and in law in revising the assessment by invoking powers u/s 263 of the Income Tax Act, 1961 (\"the Act\") without satisfying the conditions stipulated for invoking such extraordinary jurisdiction u/s 263 of the Act. 2. The learned CIT(E) erred in fact and in law in initiating revision proceedings u/s 263 of the Act for AY 2017-18 despite the fact that assessment order u/s 147 rws 144 of the Act is neither erroneous nor prejudicial to the interest of the revenue. 3. The learned CIT(E) erred in fact and in law in initiating proceeding u/s 263 of the Act on the issue of allowance of exemption u/s11 of the Act despite that fact that said issue was not subject matter of reassessment proceedings u/s 147 of the Act. 4. The learned CIT(E) erred in fact and in law in invoking revision power u/s 263 of the Act on an issue of allowability of exemption u/s 11 of the Act despite the fact that proceeding u/s 263 cannot be initiated on debatable issue. ITA No. 935/Ahd/2024 Gujarat Technological University vs. CIT(E) Asst. Year –2017-18 - 2– 5. The learned CIT(E) erred in fact and in law in initiating proceeding u/s 263 of the Act despite the fact that assessment order u/s 147 rws 144 rws 144B of the Act has been passed by the learned AO in accordance with the decision of jurisdictional High Court. 6. The learned CIT(E) erred in fact and in law in initiating proceeding u/s 263 of the Act despite that fact that revisionary proceedings cannot be initiated in case the assessment order is subject matter of an appeal in view of provision of clause (c) of Explanation 1 to section 263 of the Act. Exemption u/s 11 of the Act 7. The learned CIT(E) erred in fact and in law in holding that the Appellant is not eligible to claim exemption u/s 11 of the Act despite the fact that the Appellant being registered u/s 12AA is eligible for exemption u/s 11 of the Act. 8. The learned CIT(E) erred in fact and in law in holding that the Appellant is not eligible to claim exemption u/s 11 of the Act without appreciating the fact that the Appellant has filed valid return of income u/s 148 of the Act and filed Form 10B and Form 10 with condonation request before appropriate authority. 9. The learned CIT(E) erred in fact and in law in holding that that exemption u/s 11 of the Act is not allowable to the Appellant despite the fact that the Appellant has satisfied the conditions for claim of exemption u/s 11 of the Act. 10. Your Appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the grounds of appeal.” 3. The brief facts of the case are that on verification of the case records, the CIT(E) observed that the assessee had claimed exemption amounting to Rs. 96,71,15,100/- under Section 11 of the Act, in the return of income filed in response to notice issued under Section 148 of the Act. The CIT(E) observed that the Assessing Officer had allowed exemption amounting to Rs. 96,71,15,100/- despite the fact that the Audit Report in Form 10B was filed by the assessee on 20.07.2023, whereas the assessment order in the case of the assessee was passed 15.03.2022. Accordingly, Ld. CIT(E) was of the view that the Assessing Officer should not have allowed the benefit of Section 11 of the Act, in absence of Form 10B, having not been filed before the conclusion of assessment. During the course of 263 proceedings, the assessee submitted that non-filing of Form 10B within the due date was only a procedural lapse and no prejudice was caused to the Revenue on account of delay in filing of Form 10B. The assessee had duly filed Form on 20.07.2023 ITA No. 935/Ahd/2024 Gujarat Technological University vs. CIT(E) Asst. Year –2017-18 - 3– and therefore, on account of a procedural lapse on part of the assessee, benefit of Section 11 of the Act could not be denied to the assessee, since all other conditions / requirements for availing the benefit of Section 11 of the Act had been met by the assessee. 4. However, Ld. CIT(E) did not concur with the contention of the assessee and set-aside the assessment order as being erroneous in so far as prejudicial to the interest of the Revenue. 5. Before us the Counsel for the assesses submitted that in the instant case, the Tax Authorities / CIT(E) has not challenged the eligibility of the assessee to claim the benefit of Section 11 of the Act. The only reason why the benefit of Section 11 of the Act was sought to be denied to the assessee was on account of delay in filing of Form 10B, which was filed on 20.07.2023. The Counsel for the assessee placed reliance on several judicial precedents which have held that delay in filing of Form 10B being only a procedural lapse should not disentitle the benefit of availing benefit of Section 11 of the Act to the assessee, in case all other conditions / requirements for availing the benefit of Section 11 of the Act have been met by the assessee. 6. In response, Ld. D.R. placed reliance the observations made by Ld. CIT(E) in the 263 order. 7. We have heard the rival contentions and perused the material on record. 8. We note that in the case of Brahmchari Wadi Trust vs. Commissioner of Income-tax (Exemption) [2025] 173 taxmann.com 54 (Gujarat) [17-03-2025], the Gujarat High Court held that where delay in filing Form No. 10 by assessee-trust had occurred due to internal ITA No. 935/Ahd/2024 Gujarat Technological University vs. CIT(E) Asst. Year –2017-18 - 4– administrative problems of assessee-trust, since assessee-trust for past many years had substantially satisfied conditions for claiming exemption under Section 11, exemption under section 11 could not be denied for non-filing of Form No. 10 in time. In the case of Shri Parshwanath Bhakti Vihar Jain Trust vs. Commissioner of Income-tax (Exemption) [2024] 166 taxmann.com 732 (Gujarat)[13-08-2024], the Gujarat High Court held that where assessee-trust for past many years had substantially satisfied conditions for claiming exemption under section 11 and had also explained reason for delay in filing Form No. 10B due to illness of Accountant who was on leave for long time, matter was to be remanded to respondent to condone delay in filing Form 10B. In the case of Sarvodaya Charitable Trust vs. Income Tax Officer. (Exemption) [2021] 125 taxmann.com 75 (Gujarat)/[2021] 278 Taxman 148 (Gujarat)[09-12-2020], the Gujarat High Court held that where assessee, a public charitable trust registered under section 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form no. 10B. In the case of Vardhman Stanakvasi Jain Shravak Trust vs. Income-tax Officer [2025] 172 taxmann.com 165 (Ahmedabad-Trib.) [14-02-2025], the ITAT held that delay in submission of Form No. 10B is a procedural defect, hence, where assessee had filed Form No. 10B before Commissioner (Appeals) before conclusion of appellate proceedings, exemption under sections 11 and 12 could not be denied to assessee only on account of late filing of Form No. 10B. 9. In the case of Shiksha Foundation vs. Income Tax Officer (Exemption) [2024] 164 taxmann.com 757 (Ahmedabad - Trib.) [14-06- 2024] the ITAT made the following observations in this regard: “We have heard the rival contentions and perused the material on record. In this case, on going through the facts of the case, what transpires from the records is that the ITA No. 935/Ahd/2024 Gujarat Technological University vs. CIT(E) Asst. Year –2017-18 - 5– audit report for assessment year 2018-19 was duly signed by the auditor on 21-09- 2018, though the same was omitted to be filed on the income tax portal. The due date of filing of income tax return for assessment year 2018-19 was 26-09-2018. Notice under section 143 (1) (a) was issued on 19-12-2019. The audit report of the assessee trust was filed on the income tax portal by the auditors of the assessee trust on 20-01- 2020. Intimation under section 143 (1) denying the claim of the application of income was issued by CPC, Bengaluru on 8-02-2020. Therefore, what can be seen is that as on the date on which the intimation/order under section 143(1) of the Act was passed by CPC, Bengaluru, the auditor of the assessee trust had already filed the audit report in form 10B, before such order/intimation under section 143 (1) of the Act was issued. From the facts placed on record before us, we see no deliberate/mala fide intention on the part of the assessee or it's auditor to file the audit report in form 10 B belatedly. 7.1 In the case of Shree Jain Swetamber Murtipujak Tapagachha Sangh v. CIT (Exemptions) [2024] 161 taxmann.com 114 (Bom.), the High Court held that where assessee-trust filed Form No. 10 beyond due date and assessee's auditor admitted to oversight that he did not consider provisions of Rule 17 and was under bona fide impression that since factum of accumulation of receipts was reported in audit report in Form No. 10B a separate statement in Form No. 10 was not required, in view of fact that delay was not intentional, assessee could not be prejudiced on account of an ignorance of rules admitted by professional engaged by assessee and thus, delay was to be condoned. 7.2 In the case of Social Security Scheme of GICEA v. CIT (Exemptions) [2023] 147 taxmann.com 283 (Guj.), the Assessee a Public Charitable Trust had been filing returns of income in time along with audit report under section 12A(1)(B). For relevant assessment year 2016-17, assessee obtained audit report from Chartered Accountant well before time, however, same could not be uploaded along with return of income inadvertently. In absence of any audit report, Central Processing Centre had not granted exemption under section 11 which otherwise was available to it since many years and resultantly demand was raised. The Assessee therefore filed a rectification application under section 154, seeking to place on record audit report to Central Processing Centre but same was rejected on ground that Form No. 10Bauditreport, was not filed in time. The Assessee filed an application before CBDT to condone delay in filing Form No. 10Baudit report, however same was rejected. The High Court held that since assessee was a public charitable trust for past 30 years and substantially satisfied conditions for availing exemption under section 11 it should not be denied exemption merely on bar of limitation especially when legislature had conferred wide discretionary powers to condone such delay. Accordingly, the Gujarat High Court directed that the order of rectification under section 154 be quashed 7.3 In the case of Jt. CIT (OSD) v. Gujarat Energy Development Agency [2023] 154 taxmann.com 348/202 ITD 733 (Ahd. - Trib.), the ITAT held that where assessee, a charitable trust, filed audit report in Form No. 10B during assessment proceedings, Assessing Officer could not have denied exemption under section 11 on ground that audit report was not e-filed along with return. 7.4 In the case of Sarvodaya Charitable Trust v. ITO (Exemptions) [2021] 125 taxmann.com 75/278 Taxman 148 (Guj.), the High Court held that where assessee, a public charitable trust registered under section 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form no. 10B. 7.5 In the case of CIT v. Gujarat Oil & Allied Industries [1993] 201 ITR 325 (Guj.), the High Court held that where an assessee could not file audit report along with ITA No. 935/Ahd/2024 Gujarat Technological University vs. CIT(E) Asst. Year –2017-18 - 6– return but filed it later before completion of assessment by ITO, he was entitled to deduction under section 80J of the Act. 7.6 Accordingly, in light of the above judicial precedents cited above and the assessee's set of facts, we are of the considered view that the claim of application of income cannot be denied to the assessee only on the ground that the assessee/the auditor of the assessee omitted to file form 10B (auditor's report) along with return of income, when the same was submitted to the tax authorities before the order/intimation under section 143 (1) of the Act was issued. 8. In the result, the above ground of appeal of the assessee is allowed. 10. In view of the above judicial precedents cited above, we are of the considered view that delay in filing of Form 10B in the instant case has caused no prejudice to the interest of the Revenue, since such delay is only a procedural lapse. Accordingly, we are of the view that the present 263 order is liable to be set-aside. 11. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 22/04/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 22/04/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 11.04.2025 2. Date on which the typed draft is placed before the Dictating Member 11.04.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 21.04.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement .04.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 22.04.2025 7. Date on which the file goes to the Bench Clerk 22.04.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "