Yash Charitable Trust, Navsari, Gujarat V. Exemption Ward Surat, Income Tax Office Surat

ITA 382/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1201 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-07-2024
• Assessment Year: 2021-2022
• Appeal Filed On: 03-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 11; 12A; 143(1); 250; 201; 139(4)

Judgement Text

आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आ.अ.सं./ITA No.382/SRT/2024 (Hearing in Physical Court) Yash Charitable Trust 15, Mahuvas, Janad Faliyu Vansda, Navsari-396580 [PAN No. AAATY 5705 A] Vs Exemption Ward Surat, Income Tax Office, Surat अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Mehul Shah, CA राजˢ की ओर से /Revenue by Shri Vinod Kumar, Sr-DR अपील पंजीकरण/Appeals instituted on 04.04.2024 सुनवाई की तारीख/Date of hearing 03.07.2024 उद्घोषणा की तारीख/Date of pronouncement 03.07.2024 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. Commissioner of Income-Tax (Appeal) Addl./JCIT(A)-3, Chennai [for short, “Ld. CIT(E)”] passed under section 250 of Income Tax Act, 1961 (‘the Act’) dated 05.02.2024 for assessment year 2021-22, which in turn arise from assessment order passed under section 143(1) of the Act dated 08.12.2022. The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Office (CPC) in making adjustment u/s 143(1) by not allowing exemption u/s 11 of the Act since there is neither an arithmetical error nor an incorrect claim apparent from the record and the said adjustment does not fall within the ambit of section143(1)(a)(i) to 143(1)(a)(vi) and hence the same is bad in law. ITA No.382/SRT/2024 (A.Y.21-22) Yash Charitable Trust 2 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (CPC) in making addition of Rs.72,18,262/- on account of not allowing exemption us/ 11 of Income tax Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (CP) in passing the order without any proper opportunity of being heard. The notice u/s 143(1) of proposed addition was issued on 25.11.2022 mentioning due date as 25.12.2022 but the final order was passed on 08.12.2022 which is against the principle of natural justice. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (CPC) in not giving any credit of prepaid taxes amounting to Rs.17,498/-. 5. It is therefore prayed that the addition made by the Assessing Office (CPC) and confirmed by the learned CIT(A) may please be deleted. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Rival submission of both the parties heard and record perused. First of all, Ld. Authorized Representative (Ld.AR) for the assessee submits that a very minor issue is involved in the present appeal. The ld AR of the assessee submits that assessee-trust claimed exemption under section 11, Centralized Processing Center (in short, ‘CPC’) while processing return of income made adjustment by not allowing exemption under section 11 of the Act, the reason is not discerning from order made on 08.12.2022. No specific sub-clauses of section 143(1)(a), under which the adjustment is made is shown, so order is liable to be quashed. The exemption may not had been allowed for the reason ITA No.382/SRT/2024 (A.Y.21-22) Yash Charitable Trust 3 that Form-10B was not furnished / uploaded before filing return of income. The Ld. AR of the assessee submits that assessee has already filed Form-10B on 25.01.2024, during first appellate stage. The appeal is continuation of assessment and Ld.CIT(A) has co-terminus power as of Assessing Officer. The Ld.CIT(A) despite recording the fact that Form-10B has already been filed has not allowed the exemption under section11of the Act. The Ld.AR of the assessee submits that Hon’ble jurisdictional High Court in serious of decisions including CIT Vs Mayur Foundation (274 ITR 562 Guj), CIT vs. Gujarat Oil & Allied Industries (1993) 201 ITR 325 (Guj); Gujarat Paghuthan Energy Corporation (P) Ltd. vs. DCIT 225 Taxman 79 (Guj) and Zenith Processing Mills vs. CIT 219 ITR 721 (Guj) , and Delhi High Court CIT Vs Web Commerce Pvt Ltd (318 ITR 135 Delhi) held that assessee could not file audit report along with return of income but file before completion of assessment by Assessing Officer. The assessee is entitled for deduction under section 80J. Similarly, Hon’ble Bombay High Court in the case of CIT vs. Sakal Relief Fund (2017) 81 taxmann.com 396 (Bom) also held that Form-10B was filed during the re-assessment by assessee-trust the benefit of accumulation under section 11(2) of the Act was available because such filing would be considered within the time allowed for furnishing return of income under section 139(4) of the Act. The Ld. AR of the assessee submits that this Co-ordinate Bench of Surat by following the decisions of various Hon’ble High Courts including Hon’ble jurisdictional High Court has allowed relied to the assessee-trust wherein Form-10B was filed either during the assessment or at this stage First ITA No.382/SRT/2024 (A.Y.21-22) Yash Charitable Trust 4 Appellate. The Ld.AR of the assessee also relied upon in the case of Rang Avdhut Mandir Trust vs. ITO in ITA No.336/SRT/2022 dated 02.04.2023. 3. On the other hand, Ld. Senior Departmental-Representative for the Revenue (Ld. Sr-DR) relied upon the order of lower authorities. The Ld. Sr-DR for the Revenue submits that all contentions of the assessee-trust whatever contended before Ld.CIT(A) was considered. 4. We have considered the rival submission of both the parties and perused record carefully. We have also deliberated on various case law cited by Ld. AR for the assessee-trust. We find that there is no dispute that assessee is charitable trust having registered under section 12A /12AA of the Act and claimed exemption under section 11 of the Act. The CPC / Assessing Officer has not specified the reasons as to why such benefit of section 11 was not allowed to the assessee. We find that before Ld.CIT(A) assessee claimed that proposed ground before CPT/ Assessing Officer on 25.11.2022 mentioning due date for compliance as dated 25.12.2022, however, final order was passed on 08.12.2022. The Ld.CIT(A) on considering the submission of assessee also acknowledged the fact that Form-10B has already been field on 25.01.2024. Therefore, considering the decisions of Hon’ble jurisdictional High Court and Hon’ble Bombay High Court as noted above and order of this Co-ordinate Bench in the case of Rang Avdhut Mandir Trust (supra) we direct the Assessing Officer / CPC to verify the fact that and allow relief to the assessee by following the aforesaid judicial decisions. Thus, the assessee is also allowed such relief and this appeal is restored back to the file of Assessing Officer to verify the fact about filing of Form-10B by assessee and allow relief ITA No.382/SRT/2024 (A.Y.21-22) Yash Charitable Trust 5 of application of income under section 11 in accordance with law. In the result, the ground of appeal raised by the assessee is allowed. 5. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 03/07/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) [लेखा सद˟/ACCOUNTANT MEMBER] [ Ɋाियक सद˟ JUDICIAL MEMBER] Surat, Dated: 03/07/2024 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr. Private Secretary /Assistant Registrar, ITAT, Surat