INCOME TAX OFFICER, WARD EXEMPTION DEHRADUN, DEHRADUN, UTTARAKHAND V. SIX SIGMA INSTITUTE OF TECHNOLOGY AND SCIENCE, NAINITAL ROAD, U.S NAGAR

ITA 63/DDN/2023

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The case revolves around the Revenue's appeal against the CIT(A)-NFAC's decision, which allowed the assessee's rectification application under section 154 of the Income-tax Act, 1961. The primary issue was the denial of section 11 exemption to the assessee due to the late filing of the tax audit report in Form 10B. The assessee argued that the report was filed before the extended due date, albeit with a technical glitch causing a one-day delay. The Tribunal, referencing various judicial precedents, concluded that the compliance with the procedural requirement was substantial and thus the exemption should not be denied.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26069 (ITAT-DEHRADUN)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-11-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 11-08-2023
• Other Referred Cases: Sarvodaya Charitable Trust vs. ITO, Shree Bhairav Seva Samiti vs. Income-tax Officer (Exemption), CIT vs. Xavier Kalavani Mandal (P.) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMAR PAL SINGH
• Keywords: Charitable institution; Benefit of exemption
• Section: 154; 143(1); 11; 12A; 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DEHRADUN BENCH: ‘DB’ DEHRADUN BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.63/DDN/2023 Assessment Year: 2018-19 Income Tax Officer, Ward-Exemption, Dehradun Vs. Six Sigma Institute of Technology and Science, Ground Floor, PSA Plaza, Nainital Road, Udham Singh Nagar, Uttarakhand PAN: AAFAS8985G (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre [in short, the “CIT(A)-NFAC”] Delhi’s DIN and order No. ITBA/NFAC/S/250/2023-24/1054438415(1), dated 19.07.2023, involving proceedings under section 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by None Department by Sh. Amar Pal Singh, Sr. DR Date of hearing 19.11.2024 Date of pronouncement 27.11.2024 ITA No.63/DDN/2023 AY: 2018-19 2 | P a g e 2. Learned Departmental Representative next invited our attention to the CIT(A)-NFAC detailed discussion accepting assessee’s section 154 rectification thereby holding that CPC had wrongly disallowed the assessee’s section 11 exemption claim on account of belated filing of its tax audit report in Form 10B, as not sustainable in law as under: “5. I have considered the facts and circumstances of the case and material available on record on the above matter. The only issue involved in present case is denial of exemption claimed by appellant on the basis that the audit report in Form 10B was not filed by assessee on or before filing the return of income. Appellant is AOP registered under section 12A of Income Tax Act 1961 w.e.f 01.04.2010. Appellant has filed its return of income for AY 2019-19 on 15.10.2018 declaring total income at Rs. Nil. CPC Bangalore processed the return of income u/s 143(1) of the I.T. Act and denied the exemption claimed under section of the I.T. Act and raised demand of Rs. 1,34,66,193/-. Thereafter appellant file rectification application on 29.09.2021 under section 154 of the Act. However, the AO vide order dated 16.12.2012 rejected the claim of the appellant stating that appellant has failed to file audit report in Form 10B along with or before filing the return of income. The due date of filing of return for the appellant was 30.09.2018. which was extended up to 15.10.2018 vide CBDT ORDER [F.NO.225/358/2018/ITA.II], DATED 24-9-2018. The same was further extended upto 31.10.2018 vide CBDT ORDER [F.NO.225/358/2018/ITA-II], DATED 8-10-2018. Appellant has filed its return of income on 15.10.2018. However, due to some technical glitch form 10B was filed on 16.10.2018. Hence both return of income and Form 10B were filed before the due date of filing the return of income. Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust 125 taxmann.com 75 has 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\". Further in the case of Shree Bhairav Seva Samiti vs. Income-tax Officer (Exemption) [2023] 149 taxmann.com 478 (Mumbai - Trib.) where on receipt of intimation under section 143(1) of the Act the assessee uploaded in Form 10B and filed application for rectification ITA No.63/DDN/2023 AY: 2018-19 3 | P a g e under section 154 of the Act. The application of the assessee was rejected on the ground that report in Form 10B was not furnished before due date of return of income. The Id. CIT(A) dismissed the appeal of the assessee by taking view the audit report in Form 10B was not uploaded before due date of Teturn of income. Mumbai Tribunal respectfully following the decisions of Hon'ble jurisdictional High Court in case of CIT v. Xavier Kalavani Mandal (P.) Ltd. (supra) and in Sarvodaya charitable Trust v. ITO (Exemption) (supra), held find that the assessee has complied the procedural requirement, therefore, the Assessing Officer/ CPC is directed to verify the claim of the assessee and grant necessary deduction under section 11 of IT Act. In the present case also, the appellant has complied with the procedural requirement of obtaining and filing Form 10B. The appellant filed Rol on 15.10.2018 and due to technical glitch the form 10B was uploaded on 16.10.2018 even before the due date of filing return extended till 31.10.2018. Accordingly, AO is directed to decide the claim of the appellant on merit, after accepting Form 10B filed by the appellant. 6. In result, the appeal allowed.” 3. It is in this factual backdrop that the Revenue vehemently contends that it was indeed incumbent for the assessee to file its Form 10B tax report within the due date of filing section 193(1) return and therefore it is not entitled for section 11 exemption as disallowed in the CPC’s proceedings. 4. We have given our thoughtful consideration to the Revenue’s sole substantive grievance and find no merit therein. We make it clear first of all that not only the assessee had filed its Form 10B tax audit report on 16.10.2018 which also was within the extended date of filing return up to 31st December, 2018 but also various judicial precedents discussed in the impugned lower appellate ITA No.63/DDN/2023 AY: 2018-19 4 | P a g e findings have settled the issue against the department that such a compliance is only directory and then mandatory in nature. We thus see no merit in the Revenue’s substantive grounds in the instant appeal. Rejected accordingly. 5. This Revenue’s appeal is dismissed in above terms. Order pronounced in the open court on 27th November, 2024 Sd/- Sd/- (PRADIP KUMAR KEDIA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27th November, 2024. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "