Jattu Trust, Parvathipuram V. ITO (Exemptions), Visakhapatnam

ITA 21/VIZ/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0179 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-09-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 30-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B V RAO
• Keywords: Principle of natural justice; Condonation of delay; Set aside
• Section: 154; 11; 12A; 10B

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.21/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2015-16) Jattu Trust Main Road, Opp.Sri Venkateswara Temple, Thotapalli Garugubilli Mandal Parvathipuram [PAN : AAAT36083A] Vs. Income Tax Officer (Exemptions) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri BV Rao, AR प्रत्यधथी की ओर से / Respondent by : Shri ON Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 29.09.2022 घोर्णध की तधरीख/Date of Pronouncement : 19.10.2022 O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : Condonation of Delay : This appeal is filed by the assessee against the order of the Commissioner of Income Tax [in short, [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No.ITBA/NFAC/S/250/2021- 22/1037081964(1) dated 20.11.2021 for the Assessment Year (A.Y.) 2015-16 with the delay of 12 days. The assessee filed affidavit for condonation of delay, submitting that the delay was due to the reasons 2 ITA No.21/Viz/2022, A.Y.2015-16 Jattu Trust, Parvathipuram beyond the control of the assessee. The assessee, therefore, pleaded to condone the delay and admit the appeal for hearing. We have heard the Ld.AR and gone through the condonation petition filed by the assessee. We find reasonable cause for filing the appeal belatedly, therefore, condone the delay and admit the appeal for hearing. 2. Brief facts of the case are that the assessee is a Trust registered u/s 12A of the Income Tax Act, 1961 (in short ‘Act’). The assessee filed it’s return of income for the A.Y.2015-16 on 03..03.2017, however, the assessee failed to submit Form 10B along with return of income. As the assessee did not file the Form 10B, the CPC issued notice u/s 139(9) dated 05.04.2017 treating the return of income as defective and requested the assessee to remove the defect within the stipulated time. The assessee filed Form 10B on 26.04.2017. Later on, CPC issued two reminders to remove the defect and processed the return on 03.01.2018 without considering the audit report of the assessee. The CPC, denied exemption u/s 11 and raised a demand of Rs.27,80,895/-. The assessee filed an application for rectification with CPC, however, the CPC transferred the rectification rights to the jurisdictional assessing officer. Thereafter, the assessee filed 3 ITA No.21/Viz/2022, A.Y.2015-16 Jattu Trust, Parvathipuram rectification application before the AO, however, the AO rejected the application of rectification u/s 154 filed by the assessee. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the order of the AO and dismissed the appeal of the assessee holding that the AO has rightly denied the exemption u/s 11 to the assessee in the absence of Form 10B. Moreover, there is also a delay in filing the ITR. Further, the Ld.CIT(A) held that, as the power to condone the delay lies specifically with the jurisdictional CIT(Exemption) for which the assessee has already applied for, the appeal does not hold any ground and stands dismissed. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred appeal before the Tribunal and raised the following grounds : 1. The order of learned Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, New Delhi, upholding the order of the learned Income Tax Officer denying the assessee’s claim for exemption u/s 11 of the Income Tax Act, is erroneous in law, contrary to the facts, probabilities of the case and against the principles of equity and natural justice. 2. The learned CIT(A), keeping in view of the appellant’s submissions along with the evidences regarding compliance with the provisions of section 12A and notice u/s 139(9), ought to have directed the learned Assessing Officer to accept the appellant’s petition u/s 154 and allow the claim for exemption u/s 11. 4 ITA No.21/Viz/2022, A.Y.2015-16 Jattu Trust, Parvathipuram 3. The learned CIT(A) erred by relying on the judgement of Honourable High Court of Bombay in the case of Little Angels Education Society (2021) 127 Taxman.com which is relevant from the assessment year 2018-19 from which provisions of section 12A(1)(ba) are applicable. In view of the above grounds and other grounds that may be raised with the permission of the Honourable Bench, the appellant prays your Honour to direct the learned Assessing Officer to accept the appellant’s petition u/s 154 and allow their claim for exemption of the Income Tax Act. 5. All the grounds of appeal are related to exemption u/s 11 of the Act. The Ld.AR submitted that the defect notified was rectified, audit report was e-filed on 26.04.2017 before receipt of the 2 nd and 3 rd notice and revised / rectified return of income was filed on 22.05.2017. The CPC has not considered the audit report filed on 26.04.2017 and processed the original return filed on 03.03.2017. The CPC denied the exemption u/s 11 and raised demand of Rs.27,80,895/- due to non submission of audit report along with the return of income and the AO rejected the assessee’s petition u/s 154 which is against law. The Ld.AR also submitted the acceptance of condonation by the Ld.CIT(E) u/s 192(2)(b) of the Act. Therefore, the Ld.AR pleaded to set aside the order passed by the Ld.CIT(A) and allow exemption u/s 11. 5. Per contra, the Ld.DR relied on the order passed by the Ld.CIT(A). The Ld.DR submitted that the Ld.CIT(E) quoted wrong circular while condoning 5 ITA No.21/Viz/2022, A.Y.2015-16 Jattu Trust, Parvathipuram the delay and therefore pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. 6. We have heard both the parties and perused the material placed on record. It is undisputed fact that exemption was denied since 10B was not filed along with the return of income. It is apparent from the records that the assessee filed audit report on 26.04.2017 and a revised / rectified return of income was also filed on 22.05.2017 well before the processing of return by the CPC on 03.01.2018. The assessee also applied for condonation of delay before the jurisdictional CIT(Exemptions), which was considered and condoned by the Ld.CIT(Exemptions). Merely quoting of wrong circular number by CIT(E) shall not be a ground for denial of grant of condonation. We, therefore set aside the order passed by the Ld.CIT(A) and direct the AO to allow exemption claimed u/s 11. 7. In the result, the appeal of the assessee is allowed . Order pronounced in the open court on 19 th October, 2022. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयकसदस्य/JUDICIAL MEMBER Dated : 19.10.2022 L.Rama, SPS 6 ITA No.21/Viz/2022, A.Y.2015-16 Jattu Trust, Parvathipuram आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– M/s Jattu Trust, Main Road, Opp.Sri Venkateswara Temple, Thotapalli, Garugubilli Mandal, Parvathipuram 2. रधजस्व/The Revenue – Income Tax Officer (Exemptions), I.T.Office, Ground Floor, Infinity Tower, Shantipuram, Visakhapatnam 3. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 5.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam