INDIAN MEDICAL ASSOCIATION PUNE BRANCH,SHUKRAWAR PETH V. DCIT EXEMPTION CIRCLE, PUNE, SWARGATE

ITA 764/PUN/2025

AI Insights

The case involves the Indian Medical Association Pune Branch, a charitable trust, which appealed against the order of the Commissioner of Income Tax (Appeals) that dismissed their appeal due to a significant delay in filing. The primary issue was the denial of exemption under section 11 of the Income Tax Act, 1961, by the Assessing Officer, which was based on the late filing of the income tax return and the audit report, as well as the non-submission of the registration certificate under section 12AA. The ITAT had previously allowed similar appeals for other assessment years, recognizing the trust's eligibility for exemption under section 11 despite procedural delays.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781647 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 22-03-2025
• Other Referred Cases: Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: NIKHIL S. PATHAK
• Keywords: Set aside; Reasonable cause; Bonafide belief; Charitable institution; Benefit of exemption
• Section: 143(3); 11; 12AA; 12; 10B

Judgement Text

" आयकर अपीलीय अधिकरण ”ए” न्यायपीठ पुणेमें। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A” :: PUNE BEFORE MS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No.764/PUN/2025 निर्धारण वषा / Assessment Year: 2018-19 Indian Medical Association Pune Branch, 992, Dr.Nitu Mandke, IMA House, Tilak Road, Pune – 411002. V s DCIT, Exemption Circle, Pune. PAN: AAATI2653M Appellant/ Assessee Respondent / Revenue Assessee by Shri Nikhil S. Pathak Revenue by Shri Ramnath P Murkunde-Addl.CIT Date of hearing 16/09/2025 Date of pronouncement 30/09/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], under section 250 of the Income Tax Act, 1961 dated 28.02.2025 emanating from the Assessment Order passed under section 143(3) of the Act, dated 22.05.2021 for A.Y.2018-19. The Assessee has raised the following grounds of appeal : Printed from counselvise.com ITA No.764/PUN/2025 [A] 2 “1] The learned CIT(A) erred in not condoning the delay of 567 days in filing the appeal and thereby erred in dismissing the appeal of the assessee. 2] The learned CIT(A) erred in holding that the assessee was unable to prove that he was prevented from reasonable cause in not filing the appeal within the stipulated time limit and hence, the delay in filing the appeal could not be condoned. 3] The learned CIT(A) failed to appreciate that the appellant was prevented from sufficient cause in not filing the appeal within the prescribed time limit and hence, the delay of 567 days in filing the appeal should have been condoned. 4] The learned CIT(A) erred in not appreciating the reasons submitted by the assessee for delay in filing the appeal and accordingly, it is submitted that considering the said reasons, the delay in filing the appeal may kindly be condoned and the learned CIT(A) may be directed to decide the appeal on merits. 5] The assessee submits that it is duly registered u/s 12AA of the Act and therefore, it is entitled to claim exemption u/s 11 and the learned A.Ο. was not justified in disallowing the exemption claimed u/s 11 on the ground that the assessee had failed to furnish the copy of the registration certificate u/s 12AA of the Act. 6] Without prejudice, the assessee submits that in case exemption u/s 11 is not allowable to the assessee trust, in that case, the learned A.O. erred in taxking the gross receipts of the assessee without appreciating that only the net income could be taxed as an income of the assessee. 7] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” Submission of ld.AR : 2. Shri Nikhil S Pathak -ld.Authorised Representative(ld.AR) for the Assessee filed a paper book. Ld.AR submitted that Assessee is a Printed from counselvise.com ITA No.764/PUN/2025 [A] 3 Charitable Trust duly registered u/s.12A of the Act, issued by Commissioner of Income Tax-Pune. As per the said order of Commissioner of Income Tax-Pune, Assessee was granted registration no.4248. Ld.AR placed copy of the same. Ld.AR submitted that Indian Medical Association Pune Branch is a Trust consisting of all Doctors. The Trustees are Specialist Doctors in various fields. 3. Ld.AR for the Assessee submitted that for the A.Y.2018-19, Assessing Officer has rejected Assessee’s claim for exemption u/s.11 of the Act, on the ground that Assessee has not filed copy of registration u/s.12A, Assessee had filed Return of Income u/s.139(4) on 02.02.2019 and Form No.10B was uploaded on 23.04.2021 which was beyond the time allowed under the Act. 4. Ld.AR submitted that on identical grounds, Assessee’s claim for exemption was denied by the order u/s.143(1) of the Act. Assessee filed appeal before the Hon’ble ITAT against the said disallowance. ITAT in ITA Nos.761, 762, 763, 765 & 766//PUN/2025 of Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune vide order dated 31.07.2025 has Printed from counselvise.com ITA No.764/PUN/2025 [A] 4 allowed the appeal of the Assessee. Ld.AR placed copy of the said order. 5. Ld.AR submitted that against the order u/s.143(3), Assessee had filed appeal before the ld.CIT(A) with a delay of 567 days. Ld.AR submitted that before the ld.CIT(A), Assessee had made elaborate submissions regarding condonation of delay. In the petition for condonation of delay, Assessee had specifically submitted that on identical grounds, disallowance had been made u/s.143(1) of the Act, and Assessee has filed appeal against the said order. The Assessee was under Bonafide belief that since order u/s.143(1) is under appeal, there is no necessity to file appeal u/s.143(3) as the disallowance was for the same reasons. Ld.AR also invited our attention that this was Covid-19 period and trustees being Doctors were busy in managing Covid-19 emergency. Ld.AR submitted that ld.CIT(A) should have condoned the delay and decided the appeal on merits. Ld.AR relied on various decisions. Submission of ld.DR : 6. Ld.Departmental Representative for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). However, ld.DR Printed from counselvise.com ITA No.764/PUN/2025 [A] 5 accepted that the issue is covered in favour of assessee by order of the ITAT in Assessee’s own case. Findings & Analysis : 7. We have heard both the parties and perused the records. 7.1 In this case, ld.CIT(A) has not condoned the Delay and dismissed the appeal of the Assessee. We have perused the Affidavit filed by the Assessee regarding condonation and we are convinced that there was sufficient cause for Delay. The Assessee is a Trust of Doctors, the Trustees are also Doctors. Assessment Order was passed in 22nd May 2021, which was the Second Wave of Covid-19 Period. Being Doctors, all of them were providing medical emergency services during the Second Wave of Covid-19 Period. Therefore, ld.CIT(A) should have condoned the Delay. However, here onwards we are discussing the merits of the case. 8. In this case, Assessee is a Charitable Trust duly registered u/s.12A of the Act. Copy of the said order has been filed by the Assessee. The Assessing Officer in an order u/s.143(3) rejected assessee’s claim for exemption u/s.11 of the Act. The relevant Printed from counselvise.com ITA No.764/PUN/2025 [A] 6 paragraph 4.5, 4.6 and 4.7 of the Assessment order are reproduced here as under : “4.5 The assessee trust has not submitted copy of registration certificate u/s 12AA of the IT Act, despite repetitively being asked to furnish. Further the assessee trust had filed a belated ITR u/s 139(4) on 02/02/2019 and also had not uploaded the Audit Report in Form 10 B for the AY 2018-19 within the stipulated time period and the same was also not uploaded with the ITR for AY 2018-19. On perusal of the e filing portal, it is observed that the assessee had uploaded Audit Report in Form 10 B for the AY 2018-19 only on 23.04.2021. 4.6 From the above, it is observed that the assessee has failed to satisfy the basic conditions laid down in 12A(1) (b) & 12A(1)(ba) of the Act for claiming benefit u/s 118 12 of the Act. Accordingly, no benefit u/s 11 of IT Act, 1961 is allaowable to the assessee. 4.7 Considering the facts stated, absence of registration certificate u/s 12AA of the Act and as the assessee has filed its ITR belatedly and the Audit Report has not been filed within the stipulated time and also not filed with ITR as required u/s 12A(1) of the Act, the deduction on account of revenue application of Rs. 1,45,51,483/- made by the assessee during the relevant F.Y., claim of Rs. 1,00,00,000/- made by the assessee as amount deemed to have been applied as per clause (2) of Explanation to section 11(1) and further claim of deduction Rs. 28,98,134/- u/s 11(1) of the Income-tax Act, 1961 totalling to Rs.2,74,49,617/- in the ITR for the AY 2018-19 is not allowable and accordingly, the assessee's claim of application of fund amounting to Rs.2,74,49,617/- is disallowed.” Printed from counselvise.com ITA No.764/PUN/2025 [A] 7 9. Aggrieved by the Assessment Order, Assessee filed appeal before ld.CIT(A) with a delay of 567 days. Ld.CIT(A) dismissed the appeal of the Assessee on account of delay. 10. In this case, Assessing Officer has denied exemption u/s.11 of the Act, to the Assessee for the following reasons :  Return of Income filed u/s.139(4) of the Act.  Audit Report in Form No.10B filed beyond the time mentioned in the Section. Audit Report in Form No.10B filed on 23.04.2021.  Copy of the registration u/s.12A not filed. 10.1 Thus, for above mentioned three reasons, Assessing Officer denied exemption u/s.11 of the Act. 11. We have already mentioned that Assessee is duly registered u/s.12A of the Act. This fact is also mentioned by ITAT in its order in ITA Nos.761, 762, 763, 765 & 766//PUN/2025 of Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune vide order dated 31.07.2025. 12. The Assessee was denied exemption u/s.11 vide order u/s.143(1) of the Act, for A.Y.2018-19 on identical grounds. The matter travelled before Hon’ble ITAT. Printed from counselvise.com ITA No.764/PUN/2025 [A] 8 13. The ITAT in ITA Nos.761, 762, 763, 765 & 766//PUN/2025 of Indian Medical Association Pune Branch Vs. DCIT(supra) for A.Y.2014-15, 2017-18, 2018-19, 2019-20, 2020-21 has held as under : “17. In view of the above decisions, we hold that the Ld. Addl./JCIT(A) was not justified in rejecting the claim of exemption u/s 11 of the Act on account of delay in filing of the return of income as well as delay in uploading the audit report in Form 108. We, therefore, set aside the order of the Ld. CIT(A)/NFAC and direct the Assessing Officer/CPC to allow the claim of exemption u/s 11 of the IT Act 1961. The grounds raised by the assessee are accordingly allowed. Since the assessee succeeds on the issue of claim of exemption u/s 11, therefore, the alternate claim of the assessee for taxing the net income rather than gross receipt does not require any adjudication being academic in nature. The appeal of the assessee is accordingly allowed. 18. Identical grounds have been raised by the assessee for assessment your 2017-18, 2018-19 and 2019-20 where in all the cases, the returns of income were filed belatedly and the audit reports were also uploaded subsequent to the intimation order passed by the CPC but before the appellate authorities. We have already decided the issue in the preceding paragraphs and allowed the claim of exemption u/s 11 of the Act. Following similar reasonings, we allow the grounds raised by the assessee for the above years also.” 13.1 Thus, the ITAT has categorically held that Assessee is eligible for exemption u/s.11 of the Act, for A.Y.2018-19.Ld.DR has accepted that issue is covered in favour of Assessee. Printed from counselvise.com ITA No.764/PUN/2025 [A] 9 14. Since the issue involved in the present appeal i.e.ITA No.764/PUN/2025 is identical to the issue involved in ITA Nos.761, 762, 763, 765 & 766//PUN/2025 of Indian Medical Association Pune Branch Vs. DCIT(supra), we hold that the Assessee is eligible for exemption u/s.11 of the Act. 15. We find support from the Order of the ITAT Kolkata Bench in the case of ITO Vs. Debendra and Rohini Memorial Trust [2023] 153 taxmann.com 687 (Kolkata - Trib.) IT Appeal No.241/Kol/2023 [Assessment Year 2020-21]wherein, the ITAT held that Assessee was eligible for exemption u/s.11 though the Return of Income was filed belatedly. 15.1 ITAT Ahmedadbad Bench in the case of Health Foundation and Research Centre Vs. Assistant Commissioner of Income-tax ITA 483/Ahmd/2025 held as under : Quote, “16. In view of the foregoing discussion, we set aside the impugned order of the CIT(A) dated 28.09.2023 and condone the delay of 63 days in filing the appeal before the CIT(A). Further, applying the ratio laid down by the Hon'ble Gujarat High Court and co-ordinate benches of the Tribunal, and keeping in view CBDT Circular No. 2/2020, we also condone the delay in filing Form No. 10B and direct the Assessing Officer to grant the benefit of exemption under sections 11 and 12 in accordance with law. ”Unquote. Printed from counselvise.com ITA No.764/PUN/2025 [A] 10 15.2 ITAT Delhi Bench in the case of Trilok Singh Bhandari Charitable Trust v. Income-tax Officer 213 ITD 63 (Delhi - Trib.)[14-05-2025] held as under : Quote,“12. Further ld. AR relied on the decision of the Hon'ble Gujrat High Court in the case of Xavier Kelavani Mandal (P.) Ltd. (supra), wherein it is held as under: \"4. The question whether it is permissible to the assessee to produce the audit report at the appellate stage, has already been answered by this court in CIT v. Gujarat Oil & Allied Industries Ltd. [1993] 201 ITR 325 (Guj.), wherein it is held that the provision 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. In that case, the assessee had not produced the audit report along with the return of income, but produced before completion of the assessment. The Punjab and Haryana High Court in CIT v. Shahzadanand Charity Trust [1997] 228 ITR 292 has reiterated the same principle holding that the benefit of exemption should not be denied merely on account of delay in furnishing the same, and it is permissible for the assessee to produce the audit report at a later stage either before the Income Tax Officer or before the appellate authority by showing a sufficient cause. This decision of Punjab & Haryana High Court has been relied on by the Tribunal. 5. In the above view, the Tribunal is eminently justified both in law and on facts in observing and holding as under.- Printed from counselvise.com ITA No.764/PUN/2025 [A] 11 \"In this case, it is not in dispute that the audit report in prescribed form was obtained prior to filling of the return on 20/12/2006; therefore, there was no reason for the assessee to keep the audit report with it in order to loose the exemption. The assessee in the earlier as well as in the subsequent assessment years filed the audit report and got the exemption. The conduct of the assessee in earlier year and subsequent years would prove that due to the facts stated above there was delay in filing the audit report and the contention of the assessee was supported by the affidavit of Mohmad Iqbal Vohra (PB-4). The learned CIT(A) on proper appreciation of the facts and material on record in the light of the decisions of the Hon'ble Punjab & Haryana High Court and the Hon'ble Calcutta High Court rightly directed the AO to accept the audit report of the assessee and grant exemption u/s. 11 of the IT Act.\" 13. Respectfully following the aforesaid decisions, I am inclined to allow the claim made by the assessee and, accordingly, I direct the Assessing Officer to allow the claim of the assessee u/s.11 and 12 of the Act. 14. In the result, the appeal filed by the assessee being ITA No.3210/Del/2024 for A.Y.2017-18 is allowed. 15. With regard to appeal for AY 2017-18 is concerned, since the facts are exactly similar to AY 2019-20 my above findings in AY 2017- 18 are applicable mutatis mutandis in AY 2016-17. Accordingly, the appeal being ITA No.3211/Del/2024 for AY 2019-20 filed by the assessee is also allowed. 16. To sum up, both the appeals filed by the assessee are allowed.” Unquote. Printed from counselvise.com ITA No.764/PUN/2025 [A] 12 15. According, we direct the Assessing Officer to allow the Exemption u/s.11 of the Act and delete the addition. Accordingly, grounds of appeal raised by the Assessee are allowed. 16. In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 30 September, 2025. Sd/- Sd/- MS.ASTHA CHANDRA Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 30 Sep, 2025/ SGR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1. अपऩलधर्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. Printed from counselvise.com "