Shree Shyam Manohar Goushala, Jodhpur V. ITO Exemption, Jodhpur

ITA 13/JODH/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8239 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-03-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 04-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENA
• Keywords: Depreciation; Rectification of order; Charitable institution; Principle of natural justice; Additional depreciation; Bonafide belief; Reasonable cause; Competent authority; Benefit of exemption; Condonation of delay; Revised return; Revenue expenditure; Set aside
• Section: 147; 12; 144; 11; 139; 142(1); 10AA; 12A; 139(5); 119(2)(b); 10B; 143(1); 80P; 250; 139(1); 44AB; 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 13/Jodh/2024 Assessment Year: 2015-16 Shree Shyam Manohar Gaushala Vill Chopasani, Jodhpur [PAN: AAETS 1083 P] (Appellant) Vs. Income Tax Officer, Exemption, Jodhpur I.T.A. No. 14/Jodh/2024 Assessment Year: 2018-19 Shree Shyam Manohar Gaushala Vill Chopasani, Jodhpur [PAN: AAETS 1083 P] (Appellant) Vs. CPC, Bangalore Appellant by Sh. Amit Kothari, CA Respondent by Sh. Prem Prakash Meena, Sr- DR Date of Hearing 12.03.2024 & 14.03.2024 Date of Pronouncement 15.03.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These two appeals filed by assessee are arising out of the order of the National Faceless Appeal Centre (NFAC), Delhi dated 26/09/2013 & I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 2 Commissioner of Income Tax, Appeal-08, Mumbai dated 29.12.2023 [here in after ‘NFAC& CIT(A)’ ] for assessment year 2015-16 & 2018-19 which in turn arise from the order dated 27.03.2023& 26.09.2019 passed under section 147 r.w.s 144 read with section 144B & 143(1) of the Income Tax Act, by AO. 2. At the outset of hearing, the Bench observed that there is delay of 37 days in filing of the appeal by the assessee in ITA no. 13/Jodh/2024 for which the ld. AR of the assessee filed an affidavit for condonation of delay with following prayers:- “Sub Submission of appeal of Shree Shyam Manohar Gaushala, Jodhpur for A.Y. 2015-16- Application for condonation of delay. We are submitting herewith appeal in the case of above trust for A.Y. 2015-16 and it is submitted that the delay of about 37 days had already occurred in submission of appeal, which may kindly be condoned in the interest of justice and appeal submitted may kindly be entertained. The appellate order was passed by ld. Commissioner of Income NFAC, Delhi in the case of above trsut on 26.9.2023 which was received by the assessee on 30.9.2023. The time limit for submission of appeal therefore expired on 30.11.2023 and thus the delay already occurred is of 37 days. The CIT(A), NFAC, had wrongly treated the quantum appeal as already decided while only the penalty appeal against order u/s 271(1)(b) was decided. The application for rectification was submitted on 3.10.2023 and further reminder application was submitted on 28.12.2023, but however no recalling of the earlier order or any rectification order has been made. The appellant was under a bonafide belief that the CIT(A) was pass rectification order but in the meantime lot of time had already lapsed, and in these circumstances without awaiting any further for the same the appellant had filed the present appeal, and the delay so occurred may kindly be condoned. I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 3 A affidavit of the partner confirming the above facts is also enclosed, to confirm the above facts. We hope the delay so occurred would be condoned and appeal would be admitted.” 2.1 During the course of hearing, the ld. DR fairly not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice. 2.2 We have heard both the parties and perused the materials available on record. The Bench Noted that the assessee for condonation of delay of 37 days has merit and we concur with the submission of the assessee and see that there were reasonable cause for the delay and thus, the delay of 37 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. First we take up the appeal in ITA No. 13/Jodh/2024 for A.Y 2015-16 3. In this appeal, the assessee has raised following grounds: - “1. 1. The Id. CIT(A) has erred in dismissing the appeal of the appellant as already decided while the quantum appeal was pending and only penalty appeal was decided. 2. The order so passed is contrary to the principles of natural justice and is also bad in law and bad on facts. I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 4 3. The proceedings initiated u / s 148 is bad in law and bad on facts. 4.The Id. CIT(A) has erred in upholding the action of Id. AO in computing total income at Rs. 28,88,572/-. The Id. CIT(A) has erred in upholding the action of ld. AO in making addition of 30% of the gross receipts. 2 The appellant craves leave to add, alter, amend or vary from the above the above grounds of appeal at or before the time of hearing.” 4. Succinctly, the fact as culled out from the records is that in this case, the assessee has not filed its return of income for Assessment Year (A.Y.) - 2015 – 16as per provisions of section139 of the Income Tax Act, 1961 (hereinafter referred as 'the Act').Ongoing through the information available with Tax-profile as accessible from the ITBA and other departmental portal, it has been noticed that during financial year 2014-15, the assessee has deposited huge cash amounting to Rs. 55,82,000/- in his bank accounts maintained with Union Bank of India and return of income has not filed for the year under consideration. As the source of cash deposits remains unexplained, the assessee's case was reopened by invoking the provisions of section 147 of the Act for A.Y. 2015-16after following due procedure u/s 148A of the Act by taking prior approval of the competent authority. Accordingly, notice u/s 148 of the Act was issued to the assessee on 29.03.2022 by the Office of the Income Tax Officer(Exemptions), Jodhpur was duly served upon the I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 5 assessee’s email ID registered with e-filing portal and requested to furnish the return of income which 30 days of receipt of the notice. 4.1 Subsequently, vide dated 18.01.2023 show cause notice was issued to the assesse for ex-parte assessment u/s 144 of the Act. In response the assessee has submitted reply on 04.02.2023 and furnished the audit report in form 10B along with financial statements, self-declaration affidavit and registration certificate with Rajasthan State Gaushala Federation. 4.2 On perusal of reply, it is seen that assessee has shown total receipts and expenses of Rs. 96,28,573/- and Rs. 81,87,058/- respectively and claimed Rs.14,41,515/- as exemption u/s 11 & 12 of the Act which is less than 15% of total receipts. 4.3 On verifying the details of the assessee on internet which is available in public domain, it has been noticed that the assessee is engaged in charitable work by serving Gaushala. Prima facie, the assessee's activity seems to be genuine. However, during scrutiny proceeding, the assessee was repeatedly requested to furnish the documentary evidences of the expenses incurred to verify your claim of I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 6 charitable activity. However, the assessee has not furnished documentary evidences of expenses. In want of documentary evidences, expenses remained unverified and therefore, the ld AO completed the assessment proceeding as barred by limitation. 5. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “5.1. I have carefully considered the penalty order and the submission filed by the appellant. In the instant case, penalty of Rs.40,000/- was levied by the AO (Rs. 10,000/- for each default) u / s * 0.27 (1)(b)of the Income-tax Act for failure to comply with the notices u/s 142(1) * c the income-tax Act, 1961. 5.2. Vide Ground of appeal and second submission, the appellant has submitted and discussed the matter about quantum additions which was made by the AO during the assessment proceedings. Whereas, the appellant has filed this appeal against penalty order u/s. 271(1)(b) of the Act. In this context it is submitted that the both proceedings (assessment and penalty) are separate proceedings and the appellant must file appeal against assessment proceedings and penalty proceedings separately. 5.3. It is pertinent to mention here that the appellant has already filed an appeal on 02.09.2023, against the said penalty order U / S 271(1)(b) of the I.T. Act. Accordingly, Order u/s 250 of Income Tax Act, 1961 has been passed by the CIT(A) on 22.09.2023 vide DIN & Order No: ITBA/NFAC/S/250/2023- 24/1056404780(1) wherein the appeal of the appellant has been partly allowed as the penalty u/s.271(1)(b) levied by the AO has been confirmed to the extent of Rs.20,000/-. 5.4. In view of the facts of the case, it is submitted that the CIT(A) has already disposed off the appeal of the appellant, the appeal entered in ITBA becomes infructuous. 6. In the result, infructuous entry of appeal is disposed and same is 'dismissed' for statistical purposes.” I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 7 6. The ld. AR of the assessee vehemently argued that though the appeal decision talks about the levy of penalty but the grounds mentioned are on merits of the case of the assessee and in fact the appeal of the assessee is on merits which has not been decided but the decision has been rendered as if the issue of levy of penalty u/s. 271(1)(b) of the Act. Thus, the ld. CIT(A) has not decided the issue raised before him and therefore, the order is required to be quashed. 7. Per contra, the ld. DR heard who fairly admitted that it may a human error and the order be set aside to the file of the ld. CIT(A) to decide a fresh. 8. We have heard the rival contentions and perused the material placed on record. The bench noted that in this case while deciding the appeal of the assessee for the year under consideration i.e. A.Y 2015- 16. The ld. CIT(A) though the grounds of appeal has reproduced in para 3 is dealing of the appeal of the assessee on merits but while rendering the decision he has read the fact considering that the appeal is related to the levy of penalty u/s 271(1)(b) of the Act and there is no finding of the ld. CIT(A) on the grounds which are raised on the merits of the case. Therefore, considering that aspect of the matter, we set aside the appeal I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 8 of the assessee to the file of ld. CIT(A) without commenting upon the merits of the case and the assessee is directed to participate in the remand proceeding before the ld. CIT(A) and should not ask adjournment of the flimsy grounds. In terms of these observations the appeal of the assessee in in ITA no. 13/Jodh/2023 is allowed for statistical purposes. ITA No. 14/Jodh/2023 for A.Y 2018-19 9. Now we take up the appeal of the assessee in ITA no. 14/Jdoh/2024 for A. Y. 2018-19wherein the assessee has taken the following grounds of appeal. “1. a. The Id. CIT(A) has erred in treating the appeal as not filed in due time and alternatively had also erred in not condoning the delay in submission of appeal. The order so passed is contrary to the principles of natural justice and is also bad in law and bad on facts. The appellant had filed appeal within due time of intimation of the order coming to his knowledge. b.The Id. CIT(A), has erred in upholding the Id. AO's denial of benefit under section 11/12 * A of the act which is bad in law and bad on facts. b.The ld. CIT(A) has erred in upholding the action of Id. AO in computing total income at gross receipts at Rs. 1,35,18,419/-, and thereby not allowing deduction for application of income which was incurred at Rs. 1,30,09,091/- 2. The appellant craves leave to add, alter, amend or vary from the above the above grounds of appeal at or before the time of hearing.” I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 9 10. Succinctly, the fact as culled out from the records is that the assessee has filed its return of income on 17/09/2018 declaring total income at Rs. 5,09,328/-. This return of income was processed u/s 143(1) on 26.09.2019 determining total income at Rs. 1,35,18,419/- against the returned income of Rs. 5,09,328/-. In the said intimation order u/s 143(1), the CPC Bengaluru disallowed the exemption claimed u/s 11 and 12 of the Income Tax Act as the assessee had not e-filed the Audit Report in Form 10B along with the return of income filed under sub section (1) of section 139 of the Act. 11. Aggrieved from the order / intimation of AO CPC, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 4. Decision I have considered the facts of the case, grounds of appeal and submissions made by the appellant. Accordingly, the grounds of appeal raised in this appeal are adjudicated as under: 4.1 Ground No. 1 (a) On perusal of the Form 35 of the appellant it is seen that the appellant mentioned the date of intimation order u/s 143(1) at Sr. No. 2(b) as 17/08/2023 while the date of service of order/notice of demand at Sr. No.2(c) has been mentioned as 17/08/2023. The appellant has mentioned at Sr. No. 14 of Form no. 35 that there is no delay in filing of appeal. However on perusal of intimation order u/s 143(1) it is seen that the intimation order u/s 143(1) has been passed on 26/09/2019 which was sent by emailon the same day and the appellant has filed the appeal after a delay of 1065 days. Since the appellant had not submitted any explanation for condonation of delay in filing appeal a notice u/s 250 dated 4/12 / 2023 was issued to the appellant requesting to submit the explanation as under: I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 10 "On perusal of the appeal filed by you in Form no. 35 dated 26/08/2023 for A.Y. 2018-19 it is seen that at Sr. No. 2(b) you have mentioned the date of order u/s 143(1) as 17/8 / 2023 date of service of order as 17/8 / 2023 You have mentioned at Sr. No. 14 that there was no delay in filing of appeal and the grounds of condonation of delay has been kept blank. However, on perusal of the order u/s 143(1) it is seen that the order is dated 26/9 / 2019 which was sent at the email id. [e-mail]. You are therefore, requested to submit your clarification in the matter". The appellant has submitted its written submission dated 6/12 / 2023 which is reproduced below: "The appellant respectfully begs to submit following facts and details for your honor's kind consideration In reference to your notice dated 4.12.2023, it is submitted that the date of order in Column 2(b) is inadvertently mentioned as 17.8.2023, while the correct date of order is 26.9.2019 which is rightly observed by your honour in the aforesaid notice. It is submitted that the intimation of the said order was received by the appellant on 17.8.2023, and therefore the date of receipt of the order was inadvertently mentioned in the column of date of order. It is submitted that the submission of appeal from the date of intimation of the order is within due time, and it is therefore submitted that there was no delay in submission of appeal and therefore condonation of delay was kept blank. It is submitted that in case your honour considers the same as being filed belatedly, we pray that the delay may kindly be condoned, as the same was on account of bonafide and genuine reasons. There was no intimation of the said order to the appellant. The email address does not relates to the appellant and it appears to be the email address of one consultant was looking after the audit of the appellant earlier. Even now he is not the consultant of the appellant. Recently the mobile details and email details of the present trustees have been updated and now the notices are being received on the new email address, and all compliances of the notices is being regularly made. In view of above facts it is submitted that the appeal may kindly been entertained. The submissions made on merits of the case are also enclosed herewith with a prayer that the same may kindly be considered". (b) It is clearly seen from the Form 35 filed by the appellant for the assessment year under consideration that the appellant has mentioned the date of intimation order u/s 143(1) as 17/8 / 2023 and the date of service of order/notice of demand also as17/08/2023 which is not correct. From the intimation order u/s 143(1) it is seen that the order is dated 26/9 / 2019 which was sent by email on the same date to the appellant at email id [e-mail] on the same day. Thus the appellant has filed the appeal after delay of 1065 days. The appellant has admitted that the column no. 2(b) in Form no. 35 the date of intimation order u/s 143(1) has been inadvertently mentioned as 17/8 / 2023 while the correct date of order is 26/09/2019. However, the appellant has reiterated that the intimation order u/s 143(1) dated 26/09/2019 was received by it on 17/8 / 2023 after a period of I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 11 almost four years. The appellant has not given any explanation about the mode by which it had received the intimation order dated 26/9 / 2019 on 17/8 / 2023 after a period of almost four years. In this regard on perusal of the CPC portal it is seen that the communication was sent to the email id [e-mail] on the date of the intimation order. The appellant has taken an alternate plea that the email address given does not belong to the appellant but was that of the consultant and it had recently changed it and therefore the delay in filing appeal should be condoned. This statement of the appellant itself shows that the appellant had not taken due care to update its email in its income tax records since A.Y. 2018-19 till 2023 and the onus of this lapse is solely on the applicant. The submission of the appellant also shows that the appellant had not kept any tract of the communication sent to it from the Department via e-mail since A.Y.2018-19. In view of the foregoing facts it is seen that the appellant has not given any convincing reason for delay in filing appeal by 1065 days. (c). There are various judicial pronouncements which laid down the principle for condonation of delay. The basic essence of all the judgment says that delay should not be malafide and there should not be any negligence on the part of the appellant. Some of the decisions are relied upon are as under: 1. If the appellant has acted diligently then normally the delay gets condoned. However if the delay is caused due to negligence on the part of the appellant, it become difficult to get the delay condoned. Shakti Clearing Agency (P) Ltd. vs. ITO (2003) 127TaxMAN 2. In Shakuntala Devi Jain vs. Kuntal Kumari AIR 1969 SC 575, the Hon'ble Supreme Court held that unless want of bona fides of such inaction or negligence as would deprive a party of the protection of section 5 is proved, the application must not be thrown out or any delay cannot be refused to be condoned. 3. In Brij Inder Singh vs. Kanshi Ram AIR 1917 PC 156, it was observed that the true guide for a Court to exercise the discretion under section 5 is whether the appellant acted with reasonable diligence in prosecuting the appeal. 4. The Privy Council in Inder Singh vs. Kanshi Ram AIR 1917 PC 156 took the view that the proper guide for the Court to exercise discretion under section 5 is whether the appellant had acted with reasonable diligence in prosecuting his appeal as otherwise the Court may not exercise the discretion in his favour. 5. In Scheduled Caste Co-op. Land Owning Society vs. Union of India & Ors AIR 1991 SC 730 the delay of three years was refused to be condoned on the ground that the parties had approached the Court after decision on merits was given in other cases. I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 12 6. Where the party comes forward with a false plea before the Court to get over the bar of limitation, the delay would be not liable to be condoned as held in Binod Bihari Singh vs. Union of India AIR 1993 SC 1245. 7. As has been observed by the Madras High Court in Krishna v. Chathappan ILR 13 Mad 269. It is however, necessary to emphasize that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done, the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally Introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration 8. In the case of Union of India v. Tata Yodogawa Ltd., [1988 (38) Excise Law Times 739 (SC)], this Court while granting some latitude to the Government in relation to condonation of delay, still held that there must be some way or attempt to explain the cause for such delay and as there was no whisper to explain what legal problems occurred in filing the Special Leave Petition, the application for condonation of delay was dismissed. 9. Similarly, in the case of Collector of Central Excise, Madras v. A.MD. Bilal & amp;Co., [1999 (108) Excise Law Times 331 (SC)], the Supreme Court declined to condone the delay of 502 days in filing the appeal because there was no satisfactory or reasonable explanation rendered for condonation of delay. 10. In the case of Joint Commissioner of Income-tax*, Special Range L Chennai v. Tractors & Farm Equipments Ltd. [2007] 104 ITD 149 (CHENNAI) (TM) IN THE ITAT CHENNAI BENCH 'B' (THIRD MEMBER) on AUGUST 11, 2006 held that "8. In the present case I find that the assessee justified the delay only with referenceto the affidavit of Shri M.L.S. Rao, Director of the company. In the said affidavit M_{r} Rao stated that the Commissioner (Appeals)'s order was misplaced and forgotten. It was found while sorting out the unwanted papers. Thereafter steps were taken for the preparation of the appeal. Consequently the delay was caused. This clearly shows that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. In my opinion there exists no sufficient and good reason for the delay of 310 days. I, therefore, concur with the reasonings adduced by the learned Accountant Member" 11. The Gujarat High Court laid down principle for condonation of delay in the case of Baroda Rayon Corporation Ltd. v. Commissioner of Sales Tax, I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 13 Gujarat, Ahmedabad 1991 (3) TMI 355-GUJARAT HC [1992] 87 STC 266 (Guj) Dt: 15-3- 1991 as under- "In our opinion, the Tribunal was, therefore, right in holding that the assessee had failed to make out sufficient cause for not preferring an appeal to the Tribunal within the prescribed time. For the reasons stated above, the question referred to us is answered in the affirmative, that is, against the assessee and in favour of the department. There shall be no order as to costs in this reference. Reference answered in the affirmative.". 12. University of Delhi Vs Union of India & Ors, in Civil Appeal No. 9488 2019 vide Order dated 17/12 / 2019 the Hon'ble Supreme Court condone delay by holding that, MENT of has refused to condone delay by holding that "The entire explanation as noted above depicts the casual approach unmindful of the law of limitation despite being aware of the position of law. That apart when there is such a long delay and there is no proper explanation, laches would also come into play while noticing as to the manner in which a party has proceeded before filing an appeal. In the matter of condonation of delay and laches, the well accepted position is also that the accrued right of the opposite party cannot be lightly dealt with." 13. State Of Uttar Pradesh & Ors. Versus M/S Satish Chand Shivhare and Brothers SLP (Civil) No. 5301 of 2022; April 04, 2022: "If delay is not condoned, no adjudication on merits is warranted." In view of the above judicial pronouncements, the basic principle emerges that the delay should be bonafide and there should not be any negligence on the part of the appellant. Since the appellant has not given any justification for late filing of the appeal therefore the delay is not condoned and the appeal is dismissed. 1. Without prejudice to the above, the issue in this case is also adjudicated on the merits of the case as under. a. The only ground of appeal relates to disallowance of exemption claimed under the provisions of section 11 and 12 of the Income Tax Act. The appellant in its written submission has claimed that the original Return of Income Tax was filed on 15/10/2018 and the revised Return of Income was filed on 31/10/2018. However, on perusal of the ITBA system it is seen that the original Return of Income was filed on 17/09/2018 which was processed vide intimation order 143(1) dated 26/09/2019 The appellant in its entire reply has not clarified whether the Audit Report in Form 10B was filed on the se filing portal and the date of filing it. The copy of Audit Report in Form 10B attached by the appellant along with the written submission shows the date as -08/2018 and does not have the Income Tax Department Logo in the background which indicates that it is not a copy of the uploaded report. On perusal of the ITBA I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 14 System no Form 10B is available for AY 2018-19 which indicates that Form 108 was not uploaded by the appellant on the portal either with the Return of Income or thereafter. The brief facts as narrated earlier is that the appellant is a registered trust and also got the registration under the Income-tax Act and has claimed that it was eligible for the exemption U/s. 11 and 12 for the assessment year under consideration. The appellant has filed the return of income, showing the total income at Rs. 5,09,328/-. The gross receipts of the appellant were Rs. 1,35,18,419/- out of which the appellant has claimed the expenditure on the day to day working and projects of the trust at Rs. 1,30,09,091/- and the excess of income over the expenditure was Rs. 5,09,328/- The return of income of the appellant was processed by the CPC, Bangaluru vide processing order dated 26/06/2019. In the processing order the CPC has considered the total receipt of the appellant Trust but have rejected the claim of the exemption for the reason that appellate trust or institution has not e-filed the Audit report in Form 10B along with the return u/s 139(1). The relevant provisions of section 12A are reproduced below: "12A. [Conditions for applicability of section 11 and 12] The provisions of section 11 and section 12 shall not apply in relation to theincome of any trust or institution unless the following conditions are fulfilled,namely:- 1..... (b) Where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section 12 exceeds maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of 288 before the specified date referred to in section 44AB and the person in receipt of the income furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed." The above provisions provide that the if the audit report is not filed by the institution by the specified date then the provisions of section 11 & 12 shall not apply to such trust or institution. b. The specified date referred in the above mentioned section is defined in theExplanation (ii) to section 44AB which is reproduced below: Section 44AB Explanation (ii) "specified date" in relation to the accounts of the assessee of the previous year relevant to an assessment year means the due date for furnishing of return of income under sub section (1) of section 139. I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 15 In the relevant assessment year ie A.Y 2018-19, the due date for filing of return was 30/09/2018. The appellant has not filed Form 10B within the specified date along with the return of income and therefore the CPC, Bengaluru had disallowed exemption us 11 & 12 under the Act. In fact the appellant has not given any details as to whether the Form no. 10B was filed electronically and if so on what date. At this stage it will be appropriate to mention that appellant has not made any application u/s 119(2)(b) before the Competent Authority i.e. Pr.CIT for condonation of delay. Such provisions of condonation of delay are found in section 119(2)(b) which enables an assessee to approach the Board for seeking relief in such case. The provisions of section 119(2)(b) are reproduced below: Section 119: "Instructions to subordinate authorities. (b) The Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class, by general or special order, authorize (any income tax authority, not being [*] Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after expiry of period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law On perusal of the above section it is seen that the first appellate authority has been specifically excluded from the power to condone any delay u/s 119(2)(b) C. From the above, it is clear that the first appellate authorities have not been entrusted with powers of condoning delay in such cases. The intention of legislative with respective to such cases is very clear that the remedy in such situation lies in the section 119 of the Act. It may be further mentioned here that as per section 12A (1)(b), the provisions of section 11 & 12 shall not apply in relation to income of any trust or institution unless Form 10B is filed before the specified date. In the instant case it is an admitted fact that Form 10B was not filed within the specified date and hence, on this account the appellant is not eligible for any exemption under section 11 & 12 of the Act. ME TAX DEPAR d. The Hon'ble Income Tax Appellate Tribunal (Ahmedabad)in the case of Association of Indian Panel board Manufacturer [2022] 143 taxmann.com 418 (Ahmedabad-ITATO[22-07-2022] has held as under: 'Section 119 of the Income-tax Act, 1961- Central Board of Direct Taxes- Instructions to subordinate authorities (Condonation of delay in filing Form No. 10B)- I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 16 Assessment year 2018-19-Assessee, a charitable institution registered under section 12AA, claimed exemption under section 11- On filing original return of income, assessee was communicated by Assessing Officer that assessee had not filed Audit Report- Immediately thereafter, assessee filed Audit Report in Form 10B byuploading same in electronic mode- Central Processing Centre denied exemption under section 11 for want of submission of Form 10B. On appeal, Commissioner (Appeals) held that Form B shall be submitted electronically with effect from 1-4-2016 applicable for assessment year 2016- 17 and as per CBDT Circular No. 273 dated 3-6- 1970, CBDT had authorized jurisdictional Commissioner/Director of Income-tax to condone delay in filing Form 10B, and Commissioner (Appeals) did not have any power under section 119(2)(b) to condone delay in filing FormB. Thus, Commissioner (Appeals) dismissed assessee's appeal holding that assessee had remedy before jurisdictional Commissioner/ Pr. Commissioner/Pr. Commissioner/Director of Incometax for condoning delay in filing Form B and claiming benefit of section 11. It was noted that assessee was well aware that there was a delay in filing Form 108, however assessee seemed to have not made any application for condonation of delay in filing Form 10B before concerned Pr. Commissioner/Commissioner/Director of Income-tax as provided under section 119(2)(b). Whether there was no infirmity in order passed by Commissioner (Appeals)-Held, Yes (paras 6.2 and 6.3) [In favour of revenue]" e. Further it is seen that as per the provisions of section 143(1)(a)(ii) adjustment can be made for any incorrect claim, if such incorrect claim is apparent from any information in the return. The appellant has not filed the form 10B within the specified date and therefore the appellant is not eligible for exemption under section 11 & 12 of the Act. f. At this point of time, it is pertinent to discuss the decision of the Hon'ble Apex Court in the case of CC v. Dilip Kumar & Company [2018] 95 taxmann.com 327/69 GST 239, wherein the Hon'ble Court has laid down following principles: (i) Exemption notification/provisions should be interpreted strictly, the burden of proving applicability would be on the assessee to show that his case comes within the parameters of exemption clause or exemption notification. (ii) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (g) Further, the Hon'ble Apex court in the case of Principal Commissioner of Income Tax-III, Bangalore and another Vs. M/s Wipro Limited (Judgment dated 11.07.2022 in the Civil Appeal No. 1449 OF 2022) has applied strict construction to reverse the findings of the Hon'ble High Court ("HC") of Karnataka which had earlier allowed carry forward of such losses. The Hon'ble SC held that the requirement of filing a declaration within a timeline is "mandatory" in nature as per the language of the provision. It reiterated the I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 17 age-old principle that a taxing statute should be read as it is and held that the exemption/ deduction provisions should be "strictly" and "literally" complied with and, therefore, a strict interpretation should be adopted. h. Support is also taken from the decision in Arya Kshatriya Samaj V/s ITO in ITA No 175/PUN/2023 dated 23.03.2023 upheld the disallowance of exemption u/s 11 and 12 if return is filed late. The relevant para of the said decision is reproduced here below- *7. I have heard the Id. Sr. DR and perused the material on record. The CPC had denied the exemption of income u/s 11 solely on the ground that the return of income was not filed within the due date prescribed u/s 139(4A) of the Act as provided under the provisions of section 12A(ba) of the Act. There is no dispute that the return of income for the year under consideration was filed by the appellant society beyond the due date for filing the return of income u/s 139(4A) of the Act ie, on 31.10.2019. The provisions of Income Tax Act, 1961 had not conferred any discretion on the assessing authority or the appellant authority to condone the delay in filing the return of income. The provisions of section 12A(ba) provides that the exemption u/s 11 can be availed only if the return of income was filed in the manner prescribed under the provisions of section 139(4A) of the Act which in turn requires that an assessee claiming exemption of income u/s 11 to file the return of income within the due date prescribed u/s 139(1) of the Act. In the absence of any discretionary power neither the assessing authority nor the appellate authority can relax the provisions of the Statute. Therefore, this is a clearly inadmissible claim as defined under sub-clause (ii) of clause (a) of section 143(1), the CPC was justified in denying the claim for exemption u/s 11, while processing the return of income u/s 143(1) of the Act. Therefore, we do not find any merits in the appeal filed by the assessee. i. It is evident that the appellant had not filed Form 10B within the specified date in violation of Rule 12A(1)(b) of Income Tax Rules, 1962. It is a trite law that if a thing is said to be done in a particular manner, it shall be done in that manner and its performance in any other mode or fashion shall be of no consequence. The appellant cannot get benefit by claiming that default has been committed by the auditor. Therefore, in application of the above decisions of the apex court and also themandated provisions of the statute, the Assessing Officer has rightly disallowed the exemption claimed and made addition of the same to the total income of the appellant as per the provisions of section 143(1)(a)(ii) Accordingly, I am not inclined to interfere with the decision of the Assessing Officer. These grounds of appeal are hereby dismissed. 5.1 The appellant has also relied upon a number of decisions in support of the proposition that the filing of Form 10B is only directory and not mandatory. However in view of the decision of the Hon'ble Supreme Court in the case of CC v. Dilip Kumar & Company [2018] 95 taxmann.com 327/69 GST 239, and of Principal Commissioner of Income Tax-III, Bangalore and another Vs. M/s I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 18 Wipro Limited (Judgment dated 11.07.2022 in the Civil Appeal No. 1449 OF 2022) the decisions quoted by the appellant are not acceptable. 5.2 The appellant has also relied on judicial decisions and claimed for allowance of expenditure of revenue nature. It may be mentioned here that during the course of appellate proceedings, appellant has furnished Income and Expenditure account From the same it is seen that income was on account of voluntary contribution and interest on saving bank account, however the expenses were not incurred for earning of above income and hence not allowable as per the provisions of section 57(iii) of the Act. The onus was on appellant to establish the nexus of expenditure incurred towards earning of such income. The said nexus has not been proved by the appellant. In view of above, the submission of the appellant on this issue is not acceptable. 6. In the result, the appeal of the appellant is Dismissed.” 12. Since, the appeal of the assessee was dismissed on account of delay as well as on merits, feeling dissatisfied the assessee filed the present appeal on the grounds as stated herein above. Apropos to the ground of delay the ld. AR of the assessee submitted that appeal of the assessee is filed in time the relevant submission made before the ld. CIT(A) is reproduced herein below : "The appellant respectfully begs to submit following facts and details for your honor's kind consideration In reference to your notice dated 4.12.2023, it is submitted that the date of order in Column 2(b) is inadvertently mentioned as 17.8.2023, while the correct date of order is 26.9.2019 which is rightly observed by your honour in the aforesaid notice. It is submitted that the intimation of the said order was received by the appellant on 17.8.2023, and therefore the date of receipt of the order was inadvertently mentioned in the column of date of order. It is submitted that the submission of appeal from the date of intimation of the order is within due time, and it is therefore submitted that there was no delay in submission of appeal and therefore condonation of delay was kept blank. It is submitted that in case your honour considers the same as being filed belatedly, we pray that the delay may kindly be condoned, as the same was on account of bonafide and genuine reasons. There was no I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 19 intimation of the said order to the appellant. The email address does not relates to the appellant and it appears to be the email address of one consultant was looking after the audit of the appellant earlier. Even now he is not the consultant of the appellant. Recently the mobile details and email details of the present trustees have been updated and now the notices are being received on the new email address, and all compliances of the notices is being regularly made. In view of above facts it is submitted that the appeal may kindly been entertained. The submissions made on merits of the case are also enclosed herewith with a prayer that the same may kindly be considered". The ld. AR of the assessee submitted that the ld. CIT(A) has not considered the alleged delay in filling the appeal of the assessee. But considering that pray the same may please be decided on merits of the case as the ld. CIT(A) dismissed the appeal on merits too and on merits of the case the ld. AR of the assessee has submitted the following written submissions : The appellant respectfully begs to submit following facts and details for your honor’s kind consideration: 1. Re : Ground No 1 : Order u/s 143(1) denying benefit u/s 11/12A of the Act. 1.1. The appellant had filed return of income on 15.10.2018 and subsequent a revised return was also filed on 31.10.2018. The appellant trust is duly registered u/s 12A of the Act, and had also got the accounts audited u/s 12A of the Act. 1.2. The CPC while processing the said return took the gross receipts and did not allowed the deduction of expenses incurred. The total receipts were Rs. 1,35,88,245/- against which the total expenses were Rs. 1,30,09,091/-, and net income was Rs. 5,79,153/- before depreciation. 1.3. The copy of the return of income submitted by the appellant is submitted herewith in which the details of audit report obtained by the appellant on 5.9.2018 is duly mentioned. Therefore from the return of income itself the fact of audit of the accounts is verifiable and the CPC was not justified in denying such benefit. In any case the gross receipts taken as I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 20 income was not justified, and such order made by CPC u/s 143(1) is absolutely not justified and the income so determined may be deleted. 1.4. The appellant submits herewith copy of the return of income submitted for the year under consideration, the audited financial statements and the registration granted u/s 12A of the Act, and request that the benefit of registration may be granted to the appellant and the gross receipts taken as income may kindly be deleted. 1.5. It is submitted that in the processing of such returns, no such variation can be made. The ld. AO at the most could have issued the notice of defect, but such claim could not have been denied for want of the audit report. The fact of the audit was duly mentioned in the return of income, and in the summary assessment such denial of exemption was not permissible. It would be useful to draw your kind attention towards the following decisions.  Sanatan Dharam Mandir Sabha vs. ITO (2022) 36 NYPTTJ 431 (Del) Assessment—Adjustment under s. 143(1)—Disallowance of expenditure— Assessee is a registered society that runs tample with object of charitable nature—AO while processing the return under s. 143(1) disallowed entire expenditure subjecting to tax at maximum marginal rate without giving effect to any thresold limit—AO held assessee as AOP (trust)— CIT(A) confirmed the action of the AO—Assessee has neither applied nor granted registration under s. 12A—It filed income under the head 'income from other sources' other deducting application of income from goes receipt—Assessee contended that action of lower authorities is company to s. 143(1)—It is also his contention that in case of charitable society, even if benefit under ss. 11 and 12 is denied and its income was brought to tax as "income from other sources", all relevant expenditures are also to be allowed under s. 57(iii)—As per provisions of s. 43(1) the adjustment made by the CPC, does not fall under any of the limb prescribed under s. 143(1)—Further, the submission that no such adjustment was made in earlier assessment years and there is no change in the facts during the year under consideration, also could not be controverted by the Department—Even otherwise in case of a charitable society even if benefit under ss. 11 and 12 is denied and its income was brought to tax as income from other sources, all relevant expenditures were also to be allowed—In view of this the adjustment made by the CPC and confirmed by the CIT(A) is not warranted being contrary to provisions of s. 143(1)—Accordingly, the order ofthe CIT(A) is set-aside and the AO is directed to allow the claim of expenditure of Rs. 4,85,564 from the gross receipt  Krushi Vibhag Karamchari Vrund Sahakari Pat Sanstha vs. ITO (2022) 219 DTR (Nag) (Trib) 161. “10. Now I advert to the requirements of section 80A(5), which stipulates that no deduction under other sections including 80P shall be allowed if the assessee fails to make such a claim in the return of income. Thus, there are twin conditions, viz., first, I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 21 claiming deduction u/s 80P and second, claiming such deduction in the return of income. There is no dispute on the first condition, which has been satisfied in this case as the assessee did claim the deduction albeit during the course of assessment proceedings. The whole controversy revolves around the second condition, which says that the claim should be made in the return of income. The assessee in the extant case did not file any return of income, but made a claim of the deduction in computation of income filed during the course of the assessment proceedings. The moot question is whether the requirement of making a claim in the return of income is a mandatory or a directory requirement. If it is held as mandatory, then the claim must be made in the return of income, failing which the benefit of deduction would be lost. Au contraire, if it is held as directory, then the claim made either in the return of ITA No.182/NAG/2019 Krushi Vibhag Karmchari Vrund Sah Pat Sanstha Maryadit income or in any manner before the conclusion of assessment proceedings, as is the case under consideration, would validate the entitlement. 11. The Hon'ble Supreme Court in CIT vs. G.M. Knitting Industries (P.) Ltd. (2015) 376 ITR 456 (SC) came across a situation in which the assessee claimed additional depreciation in Form 3AA but the Form was not furnished along with the return of income. Such Form was submitted during the course of assessment proceedings. The AO denied the claim on the ground that the Form 3AA was required to be statutorily filed along with the return of income. The view of the AO was reversed by the Tribunal as well as the Hon'ble High Court by holding that even if the Form was filed during the course of assessment proceedings, it amounted to sufficient compliance. The Hon'ble Supreme Court, taking note of the judgment in CIT Vs. Shivanand Electronics (1994) 209 ITR 63 (Bom), approved the view of the Hon'ble High Court having the effect that the requirement of filing Form 3AA was a necessary ingredient for claiming additional depreciation, but the timing of filing the Form was a directory requirement, which was fulfilled on filing it even during the course of assessment proceedings. The ITA No.182/NAG/2019 Krushi Vibhag Karmchari Vrund Sah Pat Sanstha Maryadit Hon'ble Bombay High Court in Shivanand Electronics (supra) dealt with the requirement of filing audit report for the purpose of claiming deduction u/s 80J, which required that the report should be filed "along with return of income'' under s. 80J(6A). It held that such requirement of filing the audit report along with the return of income was not mandatory, but directory in the sense that if assessee complied with the same before completion of assessment, deduction under s. 80J, on the basis of such report, was allowable.  Opto Circuits (India) Ltd. vs. ACIT (2022) 219 DTR (Bang) (Trib) 177 Exemption under s. 10AA—Allowability—Non-filing of return within the time- limit prescribed and under s. 139(1)—Provisions of sub-ss. (5) and (6) of s. 10A apply to exemption under s. 10AA by virtue of sub-s. (8) of s. 10AA— However, these sub-sections of s. 10A do not prescribe the precondition of filing of return within the specified due date under s. 139(1) to be eligible for the benefit of s. 10AA—It is not the case of the Revenue that the assessee has not fulfilled or violated any of the conditions mentioned in sub-ss. (2) and (4) of s. 10AA—A conditionality of filing a return within the specified due date under s. 139(1) in order to be entitled to a particular deduction/exemption ought to be made in the section itself and cannot be superimposed—It is not for the AO or the CIT(A) to rewrite the law and rule that exemption is not to be allowed since the return of income was not filed within the specified due date under s. 139(1)—Therefore, the denial of exemption on the ground of not filing I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 22 the return within the specified due date under s. 139(1) is not legally correct— Since the AO disallowed the claim of deduction under s. 10AA at the threshold, it needs to be examined whether the assessee has complied with all other conditions mandated under s. 10AA—Matter remanded  Capgemini Technology Services India Ltd. vs. DCIT (2022) 220 TTJ (Pune) 409 Exemption under s. 10AA—Allowability—Claim made in revised return accompanied by Form No. 56F—As per sub-s. (5) of s. 10A, the assessee is required to furnish the audit report in the prescribed form along with the return of income—There is no reference to the filing of such return under s. 139(1) or under s. 139(5)—Finance Act, 2020 has carried out an amendment to sub-s. (5) of s. 10A by providing that the report of the auditor in the prescribed form should be filed before the specified date referred to in s. 44AB, which, in turn, refers to s. 139(1)—Thus, for the period anterior to the amendment of s. 10A(5) carried out by the Finance Act, 2020, the only requirement was to furnish the audit report in the prescribed form along with the return of income—Such return of income may be under s. 139(1) or under s. 139(5)— Since the assessee claimed deduction under s. 10AA by filing the revised return under s. 139(5) and also uploaded the requisite audit report in Form No. 56F along with that, assessee's claim is allowable 1.6. It is also submitted that the gross income cannot be taxed as income, and only the net income can be considered. The expenses which had been incurred 13. To support this contention reliance was placed on the following evidences: S. No. Particulars Page No. 1 Submission before ld. CIT(A), NFAC, Delhi 1-9 2 Audit Report and Financial Statements for AY 2018-19 10-17 3 CBDT Circular No. 225/358/2018 ITA. II for Due date extension 18 14. The ld DR is heard who has relied on the findings of the lower authorities and admitted that since the delay in filling the audit report is I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 23 not under the purview of the ld. CIT(A) he has rightly rejected the appeal of the assessee on that ground that the audit report has not been filed in time. 15. We have heard the rival contentions and perused the material placed on record. The bench noted that the assessee has explained the reasons that in fact there is no delay and the date of intimation was inadvertently left blank. Even the date of intimation and service there was an email id of the consultant who was now not looking to the affairs of the trust and the details of the trustee have been updated on the portal and thus even on this reasons there are reasonable cause in filling the appeal though belated. Based on these observations we found merits in the reasons advanced and we concur with the submission of the assessee and see that there were reasonable cause for the delay and thus, the delay in filing the appeal by the assessee before the ld. CIT(A) is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause and the appeal of the assessee taken up for deciding on the merits of the case. I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 24 16. As regards the delay in filling the audit report in form no. 10 B we note that the assessee has filed the said audit report on 13.03.2024. The ld. AR of the assessee placed on record that even the CBDT vide F.No. 225/358/2018/ITA.II dated 08.10.2018 wherein the due date extended upto 31.10.2018 and the assessee in this case efiled the form no. 10B on 13.03.2024 vide acknowledgement no. 141826340130324. The bench also noted that even otherwise the issue that the whether the assessee denied the benefit of exemption as a trust merely on the reason that the audit report in Form no. 10 B filed belated. This issue is decided by the Gujarat High Court in the case of Sarvodaya Charitable Trust Vs. ITO(E) (2021) 278 Taxman 148 (Guj.) (HC), Where assessee, a public charitable trust registered u/s 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 especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. The similar issue is also dealt by the coordinate bench of Ahmedabad in the case of ITO(E) Vs. Shri Laxmanarayan Dev Shrishan Seva Khendra ITA No. 410/Ahd/2022 order dt. 19.05.2023 (Ahmedabad) (Trib.) and Rajkot bench in the case of Sh. Rajkot Vishashrimali Jain Samaj Vs. ITO (2023) 200 ITD 662 (Rajkot) (Trib.). On being consistent to the view in the I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 25 matter we direct the ld. Jurisdiction Assessing Officer (JAO) to consider the Form no. 10B through belated and allow the claim of exemption u/s. 11 of the Act to the assessee. In terms of these observations, the appeal of the assessee in ITA no. 14/Jodh/2023 is allowed. Order pronounced in the open court on 15.03.2024 Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Ganesh Kumar, PS Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order I.T.A. Nos. 13 & 14/Jodh/2024 Assessment Year: 2015-16 & 2018-19 26 Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order