ITO, Ward-1(1), Exemption, New Delhi V. Forum Of Indian Regulators, Delhi

ITA 1371/DEL/2022

AI Insights

The case involves the Income Tax Officer, Ward 1(1) [Exemption], New Delhi as the appellant and the Forum of Indian Regulators, CERC as the respondent. The dispute centered on the denial of exemption under Section 11 of the Income Tax Act to the assessee for failing to e-file the audit report in Form No. 10B along with or before the due date of filing the return for the Assessment Year 2017-18. The CIT(A) had allowed the assessee's appeal, which the Revenue challenged. However, the rectification by the A.O./ CPC, Bangalore, which reversed the earlier demand and accepted the return, led to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108507 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 06-06-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 154; 11; 12A; 10B; 143(1)

Judgement Text

1 ITA No. 1371/Del/2022 Forum of Indian Regulators, ND IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘B’ NEW DELHI ] BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 1371/DEL/2022 (A.Y. 2017-18) Income Tax Officer, Ward : 1 (1) [Exemption] New Delhi. ( APPELLANT ) Vs. Forum of Indian Regulators, CERC, 3 RD & 4 TH Floors, Chandralok Building, Janpath, Central Delhi, New Delhi – 110 001 PAN No. AAATF1346E ( RESPONDENT ) ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the Revenue against the order dated 28.04.2022 of the ld. Commissioner of Income Tax (Appeals) (hereinafter referred to CIT (Appeals)/National Faceless Appeal Centre (NFAC) Delhi, for assessment year 2017-18. Assessee by : Shri R. K. Raman, C. A.; Department by: Shri Avikal Manu, Sr. D. R.; Date of Hearing 16.02.2023 Date of Pronouncement 13.03.2023 2 ITA No. 1371/Del/2022 Forum of Indian Regulators, ND 2. The Revenue has raised the following substantive ground of appeal :- “1 That the Ld. CIT(A) has erred in allowing the appeal of the assessee in contraventions of the provisions of Section 12A(1)(b) of the IT Act read with the provisions to Rule 12(2) of the Income Tax Rules” as the assessee had failed to e-file to e-file its audit report u/s 10B on or before the due date of filing of return, therefore, the assessee was not entitled to Exemption u/s 11 of the Income Tax Act.” 3. Brief facts of the case are that, the order u/s 143(1) of the Act came to be passed on 25/03/2019 pertaining to Assessment Year 2017-18 wherein the DCIT CPC, Bangalore had disallowed Rs. 1,50,06,077/- on the reason that the assessee has not e-filed the audit report in Form No. 10B along with or before filing the return of income, accordingly the exemption u/s 11 of the Act was not allowed to the assessee. 4. Aggrieved by the order dated 25/03/2019, the assessee preferred an appeal before the CIT(A) i.e. national Faceless Appeal Centre (‘NFAC’ for short) vide order dated 28/04/2022 allowed the appeal filed by the assessee. Aggrieved by the order dated 28/04/2022, the Department has preferred the present appeal on the grounds mentioned above. 3 ITA No. 1371/Del/2022 Forum of Indian Regulators, ND 5. The Ld. DR vehemently submitted that the CIT(A) has erred in allowing the appeal of the assessee in contravention of provisions of Section 12A (1)(b) of the Act read with Rule 12(2) of the Income Tax Rules as the assessee had fail to e-filed or its audit report u/s 10B on or before the due date of filing the return. Therefore, the assessee is not entitled to exemption u/s 11 of the Act. 6. On the other hand, the Ld. Counsel for the assessee submitted that the assessee filed income tax return for Assessment Year 2017-18 electronically on 04/08/2017 and also filed requisite audit report in Form No. 10B was up loaded by tax auditor on 28 th August 2017 much before the due date, further submitted that the assessee filed Form No. 10 and 9A as per Rule 17 on 03/08/2017 and Form 10B was e-verified by the assessee on 23 rd March, 2018 before the completion of assessment u/s 143(1) of the Act. The ITR was verified on 11 th September, 2017 well before the due date i.e. 7 th November, 2017. The intimation notice was served on the assessee on 19/11/2018 u/s 143(1) (a) (ii) of the Act and same was replied by the assessee within the stipulated time. The Ld. Counsel further submitted that the order u/s 143(1) was passed on 25 th march, 2019 without giving effect to the reply field and exemption u/s 11(2) of the Act was denied consequently demand of Rs. 63,12,051/- was created. The assessee assailed order passed by the CIT(A). Further, the assessee had also filed application u/s 154 of the Act against the 4 ITA No. 1371/Del/2022 Forum of Indian Regulators, ND order of 143(1) of the Act the rectification order was passed on 06/08/2019 giving effect of exemption and nullifying the demand created u/s 143(1) of the Act. 7. During the appellate proceedings, the assessee vide written submission dated 24/04/2019 brought to the notice of the Ld. CIT(A) regarding order passed u/s 154A of the Act by the A.O., CPC, Bangalore and nullifying the demand created u/s 143(1) of the Act and pleaded for withdraw of the appeal filed by the Assessee. However, the CIT(A) instead of dismissing the appeal as sought by the Assessee himself proceeded to pass the order on merit and allowed the Appeal filed by the Assessee vide order impugned dated 28/04/2022 which is under challenged by the Department. 8. Considering the fact that the A.O./ CPC, Bangalore has already rectified the mistake dated 06/08/2019 wherein the demand raised against the assessee was reversed and the income return for the Assessment Year 2017-18 was accepted by the Department, the Appeal filed by the Revenue challenging order of the CIT(A) deleting the addition made by the A.O. on merit does not survive. Accordingly, the Grounds of Appeal of the Revenue fails. Appeal filed by the Revenue is dismissed. 5 ITA No. 1371/Del/2022 Forum of Indian Regulators, ND 9. In the result, Appeal filed by the Revenue is dismissed. Order pronounced in the open court on : 13/03/2023. Sd/- Sd/- ( ANIL CHATURVEDI ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 13/03/2023 *MEHTA/R.N, Sr. PS* Copy forwarded to :- 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI