INTEGRATED DEVELOPMENT SOCIETY,BHUBANESWAR V. DEPUTY DIRECTOR OF INCOME TAX, CPC, BENGALURU

ITA 363/CTK/2024

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The case involves the Integrated Development Society, which appealed against the order of the CIT(A) that upheld the intimation from the Deputy Director of Income Tax, CPC, Bengaluru. The intimation had disallowed all expenditures claimed by the society in its return for the assessment year 2014-15, due to the non-filing of the audit report in Form 10B along with the return. The society argued that the complete disallowance of expenditures was not justified even if the audit report was not filed timely, as this was not a mistake apparent from the record. The Tribunal agreed with the society, noting that the intimation was erroneous as it did not make permissible adjustments under section 143(1).

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25962 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-10-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 04-09-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.C.MOHANTY
• Assessee Lawyers: CHITRASEN PARIDA
• Keywords: Set aside
• Section: 12; 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL Integrated Development Society, Plot No.175/2720, Padmabati Vihgar, Chandrasekharpur, Sailashree Vihar, Bhubaneswar PAN/GIR No. (Appellant Per Bench This is an appeal filed by the assessee against the ord JCIT(A)-2, Mumbai 3/10180/2018-19 2. Shri Chitrasen Parida, S.C.Mohanty, Sr. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.363/CTK/2024 Assessment Year : 2014-15 Integrated Development Society, Plot No.175/2720, Padmabati Vihgar, Chandrasekharpur, Sailashree Vihar, Vs. Deputy Director of Income Tax , CPC, Bengaluru No.AAATI 1569 C (Appellant) .. ( Respondent Assessee by : Shri Chitrasen Parida, Adv Revenue by : Shri S.C.Mohanty, Sr DR Date of Hearing : 17/10/20 Date of Pronouncement : 17/10/20 O R D E R This is an appeal filed by the assessee against the ord 2, Mumbai dated 30.7.2024 in Appeal No.CIT(A), Bhubaneswar 19 for the assessment year 2014-15. Chitrasen Parida, ld AR appeared for the assessee and Shri S.C.Mohanty, Sr. DR appeared for the revenue. P a g e 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, MEMBER , ACCOUNTANT MEMBER Deputy Director of Income Tax , CPC, Bengaluru Respondent) Chitrasen Parida, Adv DR 2024 024 This is an appeal filed by the assessee against the order of the ld 30.7.2024 in Appeal No.CIT(A), Bhubaneswar- the assessee and Shri ITA No.363/CTK/2024 Assessment Year : 2014-15 P a g e 2 | 4 3. It was submitted by ld AR that the assessee is a society, which is doing the activities of general public utility of assisting in child adoption and providing education to under privileged children and orphan children. It was the submission that the assessee receives grant-in-aid from the Government for its activities. It was the submission that for the assessment year under appeal, the assessee had filed its return of income on 1.12.2014 but did not attach the audit reports in Form 10B though the same was obtained on 28.4.2014. It was the submission that the audit report was subsequently filed on 25.6.2018 when the appeal was pending before the ld JCIT(A). It was the submission that the intimation came to be issued in respect of the return of income filed by the assessee denying the assessee the benefit of expenditure claimed in its entirety on the ground that the audit report had not been filed along with the return of income. It was the submission that the ld JCIT(A) had dismissed the appeal of the assessee holding that the filing of the audit report was a statutory requirement and non-filing of the same would disentitle the assessee to the benefit of section 11 & 12 of the Act. Consequently, ld CIT(A) upheld the intimation. It was the submission that non-filing of audit report alongwith return of income might admittedly lead to denial of exemption u/s.11 & 12 of the Act but under no circumstances can lead to disallowance of 100% of the expenditures that too in an intimation u/s.143(1) of the Act. It was the ITA No.363/CTK/2024 Assessment Year : 2014-15 P a g e 3 | 4 submission that the intimation disallowing the entire expenditure is liable to be set aside as it was not a mistake apparent from record. 4. In reply, ld Sr DR vehemently supported the intimation issued u/s.143(1) of the Act and the order of ld CIT(A). 5. We have considered the rival submissions. A perusal of the facts of the present case clearly shows that the assessee has filed its return of income claiming exemption u/s.11 & 12 of the Act. Admittedly, the audit report has not been filed within the due date. However, non-filing of the audit report within the due date cannot lead to entire disallowance of the expenditures claimed in the income and expenditure account. This is not a mistake apparent from record. The best action that could have been made u/s.143(1) was bringing to tax the surplus of income over expenditure. However, this has not been done in the intimation issued. This being so, as the intimation is found to be erroneous and is not making adjustment, which are permissible under the provisions of section 143(1), the intimation as issued for the impugned assessment year in the case of the assessee stands set aside. 6.. In the result, appeal of the assessee stands allowed. Order dictated and pronounced in the open court on 17/10/2024. Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA No.363/CTK/2024 Assessment Year : 2014-15 P a g e 4 | 4 Cuttack; Dated 17/10/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.Secretary ITAT, CUTTACK 1. The Appellant : Integrated Development Society, Plot No.175/2720, Padmabati Vihgar, Chandrasekharpur, Sailashree Vihar, Bhubaneswar 2. The Respondent: Deputy Director of Income Tax , CPC, Bengaluru 3. The Ld JCIT(A)-2, Mumbai 4. Pr.CIT, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy// "