DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD V. TKR EDUCATIONAL SOCIETY, HYDERABAD

ITA 511/Hyd/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4368 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 05-03-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 25-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M. VIJAY KUMAR
• Assessee Lawyers: A.V.RAGHURAM
• Keywords: Set aside; Revised return
• Section: 143(3); 154; 143(1); 139(1); 10B; 139(5)

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A” , HYDERABAD BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA No.511/Hyd/2023 Assessment Year: 2018-19 The Deputy Commissioner of Income Tax, (Exemptions), Hyderabad. Vs. TKR Educational Society, 16-2-751/A/31/Ctirumala Hills, Malakpet, Hyderabad, Telangana – 500036. PAN : AAAAT7850Q (Appellant) (Respondent) Assessee by: Shri A.V. Raghuram, Advocate. Revenue by : Shri M. Vijay Kumar, CIT-DR Date of hearing: 06.03.2024 Date of pronouncement: 12.03.2024 O R D E R PER LALIET KUMAR, J.M. The appeal of the Revenue for A.Y. 2018-19 arises from the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dt.31.08.2023 invoking proceedings under section 143(3) of the Income Tax Act, 1961 (in short, “the Act”), ITA No.511/Hyd/2023 2 2. The grounds raised by the Revenue read as under : “1.The order of Ld. CIT(A),NFAC is erroneous both in law and in facts of the case. 2. The Ld.CIT(A),NFAC erred in facts and in law in deleting the addition ofRs.39,62,55,162/-. 3. The Ld.CIT(A),NFAC erred in not considering the facts that the assessee has failed to file revised return of income for correct claim of exemption u/s.10(23C)(vi) of the I.T Act, 1961 before completion of assessment.” 3. The brief facts of the case are that assessee e-filed its return of income u/s. 139(1) of the Income Tax Act, 1961 for the assessment year 2018-19 on 31.10.2018 declaring total income at Rs. NIL. The said return was processed u/s. 143(1) on 10.11.2019. In the present case, the assessee claimed exemption under section 10(23C)(vi) of the Income Tax Act in return of income. However, due to a software error, this claim was not reflected correctly in the filed ITR-7. Form 10B was submitted by the auditors of the assessee within the stipulated time. Thereafter, a demand of Rs. 17,74,90,070/- was subsequently raised, to which the assessee failed to reply in time. Despite the request of assessee to accept the exemption claim as inadvertent, since no revised return was filed on the e-filing portal or as per Section 139(5) of the IT Act before the end of the relevant assessment year or before completion of assessment, the claim was rejected by the Assessing Officer following the decision of Hon’ble Supreme Court in the case of Goetz India Ltd. vs. CIT (2006) 284 ITR 323, confirming that he cannot entertain deductions without a revised return or proper claim in the original return. ITA No.511/Hyd/2023 3 Accordingly, Assessing Officer completed the assessment and passed order u/s 143(3) r.w.s 144B of the Act on 08.05.2021. 4. Feeling aggrieved with the assessment order, assessee filed the an appeal before the Ld.CIT(A), who allowed the appeal of assessee by observing as under : “7.2 During appellate proceedings, the appellant has submitted that "....In support of the claim of exemption, the appellant has again produced another ITR-7, changing only the exemption reference at the appropriate place and reiterated that no change is there in any claim/data in the return of income produced earlier. Copy of the ITR-7 filed on the portal is attached as Annexure-4 and revised ITR-7 produced before the AO is attached as Annexure-5. " 7.3 It is clear from the above that due to clerical error/ technical glitch, there was mistake in the return of income filed by the appellant for A. Y. 2018-19 consequently. The Hon'ble SC judgment in the case of India Ltd is not applicable in this case as the appellant never made any new claim of exemption u/s 10(23)(C)(vi) of the Act. In this regard, reliance is placed on Hon'ble High Court of Rajasthan order dated 02.01.2014 the case of CIT vs Rajasthan Fasteners Ltd. (IT APPEAL NO. 247 OF 2012) wherein it was held that 18. In view of the above, we are of the considered view that once the assessee was found eligible for an exemption u/s 10B, it having been allowed such exemption in the past, and merely because a typographical error crept in while e-filing the return and it was mentioned as u/s 801B instead of Sec. 10B, this being a technical mistake, should not come in the way by disallowing the otherwise allowable/eligible exemption. " Hon'ble High Court of Rajasthan has made it aptly clear that mere typographical error or error due to any technical glitch while filing return of income should not be reason to disallow the otherwise allowable/eligible exemption. ITA No.511/Hyd/2023 4 7.4 Considering the discussion above, I am of the view that the appellant is eligible for the exemption u/s 10(23)(C)(vi) of the Act for A.Y. 2018-19 and the AO is not justified in disallowing the exemption of Rs. 39,58,19,961/- claimed u/s 10(23)(C)(vi) of the Act. Therefore, the addition made on account of disallowance of exemption u/s 10(23)(C)(vi) of the Act for A.Y. 2018-19 is deleted. Accordingly, the grounds raised by the appellant in this appeal are allowed.” 5. Before us, ld.DR submitted that ld.CIT(A) passed the decision in favour of the assessee relying upon the decision of Hon’ble High Court of Rajasthan in the case of CIT Vs. Rajasthan Fasteners Limited. However, the facts of the said case are distinguishable from the facts of the present case. Hence, the order of ld.CIT(A) is liable to be set aside. 6. Per contra, the ld.AR has submitted that there was clear error / technical glitch, and consequently, there was mistake in the return of income filed by the assessee for year under consideration. The ld. AR further contended that the decision of Hon’ble Supreme Court in the case of Goetz India Limited relied upon by the Assessing Officer is not applicable to the facts of the present case as correctly pointed out by the ld.CIT(A), as the assessee never made any new claim of exemption u/s 10(23)(C)(vi) of the Act. He further submitted that due to any technical glitch while filing return of income should not be reason to disallow the claim of exemption u/s 10(23C)(vi) of the Act. 7 We have heard the rival contentions of both the parties and perused the material available on record and also the orders passed by the lower authorities. In the present case, we find that Assessing Officer's decision to disallow the assessee's claim was rested solely ITA No.511/Hyd/2023 5 on a typographical error that occurred during the filing of the return of income. This error, as contended by the ld.AR, was not indicative of any new claim introduced by the assessee but rather a technical glitch in uploading the figures in return of income. We have gone through the order passed by the ld.CIT(A) wherein the ld.CIT(A) had mentioned that the assessee has consistently filing its return of income and claiming exemption u/s 10(23)(C)(vi) in the previous and subsequent assessment years. In the present case, the assessee has filed its return of income in ITR-7 on 31.10.2018 and has also uploaded the audit report and Form 10BB. Though claim of exemption was made correctly by the assessee, however, due to technical glitch, the figures pertaining to exempt income u/s 10(23)(C)(vi) have not been uploaded in the software and therefore, disallowance was made by the CPC/Assessing Officer. Before the assessee’s application u/s 154 could have been adjudicated, the assessee had preferred the appeal before the ld.CIT(A) and also produced the copy of corrected copy of ITR-7 wherein the correct figures of exempt income were mentioned along with the audit report. All the details mentioned in earlier (incomplete column) and subsequent return continued to be same. and the ld.CIT(A) considering the corrected copy of ITR-7 and other information given by the assessee, has granted relief to the assessee. No error was found in the claim made by the assessee either in the return of income or audit report. In fact, the acknowledgment of ITR shows the correct figures of exemption in the return uploaded . The claim of exemption was also mentioned by the assessee in various other pleas however, it was omission at one place of return filled by assessee. Hence, we are of the opinion that the same was only a ITA No.511/Hyd/2023 6 technical error and assessee cannot be denied relief based on such technical fault. 7.1. We have perused the decision of Hon’ble High Court of Rajasthan in the case of CIT Vs. Rajasthan Fasteners Ltd., (supra), wherein the Hon’ble High Court clearly held that disallowing a claim on the grounds of a mere typographical error in the return of income was not justified. Hence, respectfully, following the decision in the case of CIT Vs. Rajasthan Fasteners (supra) and the specific circumstances of the case at hand, we agree with the decision of the ld.CIT(A) to delete the addition made by the Assessing Officer with respect to the disallowance of exemption under section 10(23C)(vi) of the Income Tax Act. In the light of the above, we found no merit in the grounds of appeal raised by the Revenue. Accordingly, we upheld the order of the ld.CIT(A) in favor of the assessee, thereby dismissing the grounds of appeal filed by the Revenue. 8. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Open Court on 12 th March, 2024. Sd/- Sd/- (R.K. PANDA) VICE PRESIDENT (LALIET KUMAR) JUDICIAL MEMBER Sd/- Sd/- Sd/- Hyderabad, dated 12 th March, 2024. TYNM/sps ITA No.511/Hyd/2023 7 Copy to: S.No Addresses 1 TKR Educational Society, 16-2-751/A/31/Ctirumala Hills, Malakpet, Hyderabad, Telangana – 500036. 2 The Deputy Commissioner of Income Tax, (Exemptions) Hyderabad. 3 Prl.CIT, Hyderabad. 4 DR, ITAT Hyderabad Benches 5 Guard File By Order