MANTHAN FOUNDATION, Hyderabad V. DCIT., Exemption Circle-1(1), Hyderabad

ITA 375/Hyd/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1151 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2024
• Assessment Year: 2022-2023
• Appeal Filed On: 09-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B NAVEEN KUMAR
• Assessee Lawyers: A.V.SAI SUDHA
• Keywords: Charitable institution
• Section: 11; 143(1); 139(1); 119

Judgement Text

आयकर अपीलीय अिधकरण, हैदराबाद पीठ मŐ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “SMC”, HYDERABAD BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 375/Hyd/2024 (िनधाŊरण वषŊ / Assessment Year: 2022-23) MANTHAN FOUNDATION Hyderabad [PAN No. AACTM1527G) Vs. Dy. CIT (Exemption) Circle 1(1) Hyderabad अपीलाथŎ / Appellant Ů̝ यथŎ / Respondent िनधाŊįरती Ȫारा/Assessee by: A.V.Sai Sudha,CA राज̾ व Ȫारा/Revenue by: Shri B Naveen Kumar, DR सुनवाई की तारीख/Date of hearing: 13/06/2024 घोषणा की तारीख/Pronouncement on: 05/07/2024 आदेश / ORDER Aggrieved by the order dated 24/03/2024 passed by the learned Commissioner of Income Tax (Appeals)- NaƟonal Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Manthan FoundaƟon (“the assessee”) for the assessment year 2022-23, assessee preferred this appeal. 2. Assessee is a trust. Its case is that while filing the return of income for the assessment year 2021-22, inadvertently it failed to file Form 10, which it filed the same belatedly, but before the assessment was finalised. Because of such lapse, CPC while processing the return, issued an intimation under section 143(1) of the Income Tax Act, 1961 (for short “the Act”) disallowing exemption claimed by the trust under section 11 (2) of the Act. Assessee preferred appeal before the Ld. CIT(A), but the Ld. CIT(A) by way of impugned order held that the AO-CPC rightly disallowed the assessee’s claim of exemption under section 11/12 of the Act in the absence of audit report filed after due date prescribed under section 139(1) of the Act, and accordingly dismissed the appeal of the assessee. 3. Hence the assessee filed this appeal contending that the requirement of filing Form 10/10B is merely directory in nature and failure to furnish the same before the due date prescribed in section 139(1) of the Act cannot be so fatal as to deny the claim of exemption under section 11 (2) of the Act, especially when such Form was available on record when the intimation was processed by CPC under section 143(1) of the Act. She placed reliance on various decisions including the one in the case of ITO vs. Ramji mandir religious and charitable trust (2024) 158 Taxmann.com 114 (Ahmedabad-Trib) in support of her contention. 4. Ld. DR submitted that as rightly pointed out by the Ld. CIT(A), in terms of the CBDT Circular No. 2/2020 dated 3/1/2020 the assessee has to file condonation application under section 119 (2) of the act before the concerned CIT with the reasons for belated filing of the audit report and it is only on such condonation of the delay, the issue will be decided on merits by the Commissioner of Income Tax (Appeals). Ld. DR submitted that the assessee did not resort to such a procedure contemplated under the Circular and therefore, the CPC rightly disallowed the exemption claimed by the trust under section 11(2) of the Act. 5. I have gone through the record in the light of the submissions made on either side. As a matter of fact, this issue is no longer res integra and decided by the coordinate Bench of the Ahmadabad Tribunal in the case of Ramji Mandir Religious and Charitable Trust (supra) wherein, after reviewing the entire case law on this aspect, in unequivocal terms, it was held that the requirement of filing Form 10/10B is merely directory in nature and failure to furnish Form 10/10B before the due date prescribed under section 139(1) of the Act cannot be so fatal as to deny the claim of exemption under section 11(2) of the Act, especially when Form 10/10B was available on record when the intimation was passed by CPC under section 143(1) of the Act. In reaching such a conclusion the Bench considered the binding precedents rendered by the Hon’ble Gujarat High Court and other high courts and also the Hon’ble Supreme Court. Respectfully following the same I hold that since the Form 10 was available when the CPC passed the intimation in this case, disallowance of the claim of the assessee under section 11(2) of the Act is not proper. Learned Assessing OƯicer is, therefore, is directed to consider Form 10 available on record and to pass appropriate orders. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on this day the 5 th July, 2024. Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER Hyderabad, Dated: 05 /07/2024 Pvv/SPS Copy forwarded to: 1. Manthan FoundaƟon C/o Gandhi & Gandhi C.A 1002, Paigah Plaza, Basheerbagh, Hyderabad 500063 2. ACIT Circle 1(1) (ExempƟon), 2 nd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad 3. PCIT (ExempƟon) Hyderabad 4. DT, ITAT Hyderabad Benches 5. Guard File