Terapanth Yuvak Parishad, Surat V. Assessing Officer, Exemption Ward, Surat, Surat

ITA 554/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6640 (ITAT-SURAT)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-05-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 09-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL KEDIA
• Keywords: Rectification of order; Reasonable cause
• Section: 154; 11; 139; 12A; 10B; 250

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.554/SRT/2023 Assessment Year: (2017-18) (Physical Hearing) Terapanth Yuvak Parishad, Tera Panth Bhavan, City Light Road, City Light, Surat - 395007 Vs. The DCIT, Central Processing Centre, Bangalore èथायीलेखासं./जीआइआरसं./PAN/GIR No: AAATT4963B (Appellant) (Respondent) Appellant by Shri Sunil Kedia, CA Respondent by Shri J. K. Chandnani, Sr. DR Date of Hearing 29/05/2024 Date of Pronouncement 05/06/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the appellant emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 11.07.2022 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (in short, ‘Ld. CIT(A)’) for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. The learned CIT(A) erred in law and on facts in not deciding the issue under appeal and left the same with the AO. 2. That the Rectification order u/s 154 is bad in law as it has arbitrarily disallowed the exemption claimed by the assessee u/s 11 of the Act. 3. The CPC rectification order u/s 154 does not considered CBDT Circular no. 10 of 2019 dated 22/05/2019 and 28/02/2019 both issued vide F. No. 2 554/SRT/2023/AY.2017-18 Terapanth Yuvak Parishad 197/55/2018-ITAT-I date 03/01/2020 and thereby does not provide due justice to the assessee. 4. The Appellant craves leave to add, amend, alter vary and/ or withdraw any or all the above grounds of Appeal.” 3. The appeal filed by the assessee is delayed by 335 days. The assessee has filed an application giving reasons for delay in filing the appeal of appeal before the Tribunal and requested to condone the delay. In the application, the assessee submitted that order of Ld. CIT(A) was passed on 11.07.2022 for AY.2017-18 against which the captioned appeal has been preferred before ITAT. The assessee had filed the said appeal online on ITAT Portal on 04.08.2022 with Acknowledgement No.1659616887. However, the physical copy of appeal could not be filed in time because the online application was not appearing in the system of ITAT, Surat Bench. It was told to the person who visited for submission of the physical copy that that there were some technical reason for such difficulty. In view of the above, the same was deposited only on 10.08.2023. Accordingly there is delay in filing by 335 days. The assessee also submitted that the delay is bonafide and unintentional. It is also submitted that no prejudice would be caused to the Respondent if the delay is condoned. On the other hand, if the delay is not condoned, it would cause grave harm and injury to the assessee. The assesse should be allowed to contest the appeal on merits and should not be shunned away on technical grounds and a liberal view be kindly taken while considering condonation of delay. 3 554/SRT/2023/AY.2017-18 Terapanth Yuvak Parishad 4. The appeal before this Tribunal was required to be filed within 60 days, i.e. on or before 11.09.2022. The assessee filed appeal online on 04.08.2022, which was on time. However, the assessee filed the appeal physically on 10.08.2023. Therefore, there is a delay of 335 days. The Ld. AR submitted that the delay is bonafide and unintentional as per application for condonation of delay. The online appeal was filed in time. Therefore, the delay may be condoned by the Tribunal in the interest of justice. 5. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue submitted that assessee has failed to explain reasonable cause and sufficient reason to condone the delay. Hence, the delay should not be condoned. 6. We have heard both the parties on this preliminary issue. The Ld. AR of the assessee submitted the appeal was filed in time in e-filing portal but there was delay in filing physical appeal due to non-appearance of online application in the system at Surat. The reasons given in the application for condonation of delay are therefore convincing and the same would constitute reasonable and sufficient cause for the delay in filing appeal. It was not deliberate and unintentional. We, therefore, condone the delay and admit the appeal for hearing. 7. The facts of the case in brief are that the assessee is a charitable institution, registered under section 12A of the Act with effect from 01.05.1998. It is engaged in providing medical and health services. The assessee filed its return of income for AY.2017-18 on 17.06.2017, declaring 4 554/SRT/2023/AY.2017-18 Terapanth Yuvak Parishad total income at Rs. ‘Nil’ after claiming exemption of Rs.40,75,752/- u/s 11 of the Act. The Central Processing Centre (CPC), Bangalore processed the return and disallowed the exemption claimed in the return of income. The assessee thereafter made a request for rectification u/s 154 of the Act. Again, the CPC, Bangalore rejected the application u/s 154 of the Act as Form 10B was filed after filing the return of income. 8. Aggrieved by the order of CPC, Bangalore, the assessee filed the appeal before the Ld. CIT(A). The assessee referred to the CBDT Circular No.10 of 2019, dated 22.05.2019 wherein delay in filing Form 10B for AY.2016-17 and 2017-18 are to be condoned in all cases wherein audit report for previous year has been obtained before filing return of income but has been furnished subsequent to the filing of return of income before the date specified u/s 139 of the Act. The Ld. CIT(A) considered the submission of the assessee and directed the Assessing Officer to verify the correctness and genuineness of the assessee claimed and allow/disallow exemption accordingly. 9. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. The assessee has filed a paper book containing 35 pages wherein copy of acknowledgement of ITR 2017-18, copy of acknowledgment of submission of Form 10B, dated 31.03.2018 and other details have been furnished. The Learned Authorized Representative (Ld. AR) of the assessee relied on the grounds of appeal and has submitted that the Ld. CIT(A) erred in not deciding the issue himself and left the same to the Assessing Officer. 5 554/SRT/2023/AY.2017-18 Terapanth Yuvak Parishad Further, rectification order u/s 154 is bad since it has arbitrarily disallowed the exemption claimed u/s 11 of the Act. The CPC, Bangalore also erred in not considering the CBDT Circular No.10 of 2019, dated 22.05.2019. 10. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue supported the order of the Ld. CIT(A). The Ld. Sr. DR stated that the order is not against the assessee and the Ld. CIT(A) has only directed the Assessing Officer to verify whether filing the Form 10B was before the time allowed in the CBDT Circular. 11. We have heard both the parties and perused the record. The assessee has filed its return of income with AY.2017-18 on 17.06.2017 wherein exemption of Rs.40,75,752/- was claimed u/s 11 of the Act. The CPC, Bangalore disallowed the claim because Form 10B was not submitted along with the return. The rectification u/s 154 filed by the assessee was also rejected with the following remarks: “As seen from the Return of Income filed by the Assessee, the Assessee has claimed exemption u/ 11 of Income Tax Act, 1961 but has not furnished details of audit in the Schedule Audit Information and Form 10B Audit Report is E-filed after the date of filing the return. Hence Deduction/exemption u/s 11 is not allowed.” 12. In the appeal, the assessee had referred to Circular No.10 of 2019, dated 22.05.2019 and requested for condoning the delay in filing Form 10B. The Ld. CIT(A) has duly considered the claim of the assessee and has directed the Assessing Officer to verify the correctness and genuineness of the assessee’s claim and allow/disallow the relief u/s 11 of the Act. Therefore, it could be seen that the Ld. CIT(A) has not has not outrightly rejected the claim 6 554/SRT/2023/AY.2017-18 Terapanth Yuvak Parishad of the assessee. The Ld. CIT(A) has simply directed Assessing Officer only to verify claim of the assessee as regards filing of Form 10B as per CBDT Circular No. 10 of 2019. We do not find any infirmity in the order of the Ld. CIT(A). The assessee should produce of the details regarding filing of the Form 10B before the Assessing Officer who should verify the same and allow the relief as per CBDT Circular No.10 of 2019, dated 22.05.2019. With this observation, the appeal of the assessee is allowed. 13. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced on 05/06/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 05/06/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat