Shri Surat Mahila Club, Surat V. Dy. Commissioner of Income Tax, Cir.-1(3), Surat

ITA 158/SRT/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2473 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-02-2022
• Assessment Year: 2019-2020
• Appeal Filed On: 27-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H.P MEENA
• Keywords: Charitable institution
• Section: 11; 12A; 12AA; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 158/SRT/2021 (AY 2019-20) (Hearing in Virtual Court) Shri Surat Mahila Club 11/1179-A, Kanaiyalal Desai Road, Opp. Hitendra Desai Bunglow, Gopipura, Surat- 395003 PAN : AAETS 1289 B Vs Dy. CIT, Circle-1(3) Aayakar Bhavan, Majura Gate, Surat-395001 Appellant / assessee Respondent /Revenue Assessee by Shri Ketan Daliya, C.A. Revenue by Shri H.P Meena – CIT-DR Date of hearing 16.02.2022 Date of pronouncement 16.02.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. National Faceless Appeal Centre (‘NFAC’ in short), Delhi dated 31.07.2021for assessment year (AY) 2019-20, which in turn the assessment order under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 11.05.2020. The assessee has filed present appeal by raising the following grounds:- “1) The CIT(A), NFAC erred in disallowing exemption u/s 11 and treating the gross receipts of Rs.7,25,090/- and corpus donation of Rs.65,000/- as taxable income, though the appellant trust is registered/s 12A of the Income Tax Act, and the appellant Trust had electronically furnished Form No.10B on the portal of the income Tax Department.” ITA No.158/SRT/2021 (A.Y.19-20) Sh.Surat Mahila Club 2 2. Brief facts of the case are that assessee is a public charitable trust, having registration under section 12AA of the Act. The assessee filed its return of income for the year under consideration i.e. assessment year (AY) 2019-20 on 26.08.2019. The assessee in its computation of income claimed exemption under section 11 of the Act. The case was processed by Asstt. Director of Income Tax, Centralized Processing Centre, Bangalore (‘CPC’ in short) vide intimation dated 11.05.2020. The CPC / Assessing Officer while passing assessment order not allowed the exemption under section 11 of the Act. Aggrieved by the disallowance of exemption under section 11 of the Act, the assessee filed its appeal before Ld. CIT(A). the appeal of the assessee was transferred to NFAC, Delhi in terms of Notification No.76 of 2020 in S.O.3296(E) dated 25.09.2020 issued by Central Board of Direct Taxes (‘CBDT’ in short). Before Ld. NFAC/ CIT(A) assessee filed its statement of fact as recorded in para-3 of the order of Ld. NFAC/CIT(A). In addition to statement of fact, assessee filed its submission dated 15.02.2021. In its submission, assessee contended that CPC / Assessing Officer, Bengaluru erred in disallowing exemption under section 11 and treated the gross receipt of Rs.8,55,090/- as taxable income, though assessee is registered under section 12A of the Act. The intimation of order under section 143(1) was received on 11.05.2020. The assessee further stated that ITA No.158/SRT/2021 (A.Y.19-20) Sh.Surat Mahila Club 3 assessee is a charitable trust having registration under section 12A vide registration dated 27.05.1982. The assessee claimed exemption of gross receipt under section 11 of the Act. The order of CPC / Assessing Officer is erroneous and required to be reversed. The Ld. NFAC/CIT(A) after considering the submission of assessee held that assessee has not given any comment on non-filing of Form-10B/10BB as required under section 12A r.w.s. 17B and confirmed the order of CPC / Assessing Officer. Further aggrieved assessee has filed present appeal before the Tribunal. 3. We have heard the submissions of Ld. Authorized Representative (AR) of assessee and Ld. Commissioner of income –tax - Departmental Representative (CIT-DR) of the Revenue. The Ld. AR of the assessee submits that before filing return of income for the year under consideration AY 2019-20, the assessee uploaded the audit report on Income-tax portal vide acknowledgement No.892344761260819 on 26.08.2019. The Ld.AR of the assessee submits that copy of acknowledgement, return of income with computation of total income and registration under section 12AA dated 27.05.1982. The assessee has also filed copy of screen shot of Income-tax portal showing the uploading the Form-10B/ Audit report. The Ld. AR of the assessee submits that the CPC/Assessing Officer before processing return of income has not verified its portal, though assessee has furnished report under ITA No.158/SRT/2021 (A.Y.19-20) Sh.Surat Mahila Club 4 Form-10B as required under Income-tax Rule-17, Income-tax Rule,1962 well in time. The Ld. NFAC/CIT(A) upheld the action of CPC/Assessing Officer by taking view that it is not clear if Form10-B was furnished by assessee as required under Rule-17 of Income-tax Rule, 1962. The Ld. AR of the assessee submits that lower authorities not asked the assessee on due show cause notice to the assessee. The Ld. AR of the assessee prayed to allow the appeal of assessee with cost. 4. On the other hand, Ld. CIT-DR for the Revenue supported the order of lower authorities. Ld. CIT--DR for the revenue submits that copy of acknowledgement as furnished by the Ld. AR of the assessee seems to be uploaded on 10.02.2022 as reflected in the screen shot on the extreme right side. As Form-10B/ Audit report was not furnished to A.O. in due time, therefore the order CPC/Assessing Officer not allowed the exemption under section 11 of the Act. 5. We have considered the rival submission of both the parties and have gone through the orders of lower authorities. There is no dispute that assessee is a registered under section 12A. We find that filing return of income assessee claimed exemption under section 11 of the Act and CPC/Assessing Officer disallowed the said exemption vide intimation dated 11.05.2020. On appeal before Ld. NFAC/CIT(A) the action of CPC/Assessing Officer was upheld ITA No.158/SRT/2021 (A.Y.19-20) Sh.Surat Mahila Club 5 by taking view that Form-10B as required by under Rule-17 of income-tax Rule, 1962 was not furnished. 6. Before us Ld. AR of the assessee vehemently submits that before filing, assessee furnished report under Form-10B on 26.08.2019 at the time of filing of return and furnished acknowledgement of furnishing such report. Ld. AR of the assessee also vehemently submitted that report From-10B is in uploaded of Department and the lower authorities disallowed the exemption without verifying it’s on record. We find merit on the submission of Ld. AR of the assessee that the assessee has furnished its audit report under section 12A(1)(b) as required under Rule 17B of Income Tax Rule, 1962 prior to due date of filing its return of income on 26.08.2019. The objection of Ld. NFAC/CIT(A) that report is filed subsequently is misplaced, in fact, the date mentioned on the right side of screen shot is the date of printing the document on 10.02.2022, in fact it was uploaded on the portal of department on 26.08.2019. Considering that assessee has furnished its audit report under Form-10B well within time and the intimation u/s 143(1) is issued without verification of fact. Similarly, Ld. NFAC/CIT(A) has also not verified the fact that about the furnishing required audit report, the appeal of assessee is allowed. The CPC/Assessing Officer is directed to allow the necessary exemption under section 11 of the Act. We order accordingly. ITA No.158/SRT/2021 (A.Y.19-20) Sh.Surat Mahila Club 6 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 16/02/2022 at the closing of hearing. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 16/02/2022 Dkp. Out Sourcing P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)-Surat-3 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Assistant Registrar, ITAT, Surat True copy/