Deputy Commissioner of Income Tax(E), Lucknow V. M/s. Vyavsayik Pariksha Parishad, Lucknow

ITA 571/LKW/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6562 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 04-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Benefit of exemption; Condonation of delay; Revenue expenditure
• Section: 63; 12; 12A; 119(2)(b); 10B; 139(4); 44AB; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW [THROUGH VIRTUAL HEARING] BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 571 /LKW/ 2019 ASSESSMENT YEAR: 2016 - 17 DY. CIT (EXEMPTIONS) LUCKNOW V. M/S VYAVSAYIK PARIKSHA PARISHAD 2, ALIGANJ LUCKNOW TAN/PAN: AAATV9447J (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SMT. ABHA KALA CHANDA, CIT (DR) RESPONDENT BY: SHRI SHUBHAM RASTOGI, C.A. DATE OF HEARING: 17 08 20 2 1 DATE OF PRONOUNCEMENT: 07 0 9 20 2 1 O R D E R PER A.D. JAIN, V.P.: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE LD. CIT(A), LUCKNOW, DATED 16.07.2019, FOR ASSESSMENT YEAR 2016- 17. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD A SURPLUS OF RS.19,71,42,456/-, FOR WHICH, FORM NO.10 WAS TO BE SUBMITTED ONLINE, AS PER THE AMENDED PROVISIONS OF THE INCOME TAX ACT,1961 AND THE INCOME TAX RULES 1962. ON QUERY, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT FORM NO.10 HAD BEEN FILED ON 15.2.2017, WHICH WAS SUBSEQUENTLY FOUND TO BE NOT FILED DUE TO TECHNICAL ERROR AND THE SAME HAD BEEN FINALLY SUBMITTED ON 20.4.2017. THE ASSESSING OFFICER HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 13(9) OF THE ACT, THE BENEFIT OF EXEMPTION UNDER SECTION PAGE 2 OF 6 11 OF THE ACT WAS NOT AVAILABLE TO THE ASSESSEE. AS SUCH, THE ASSESSING OFFICER DEDUCTED THE REVENUE EXPENDITURE OF RS.7,40,79,814/- FROM THE GROSS RECEIPT AND ASSESSED THE INCOME ACCORDINGLY. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE, BRINGING THE DEPARTMENT IN APPEAL BEFORE US. 4. BEFORE US, THE LD. D.R., CHALLENGING THE IMPUGNED ORDER, CONTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE APPEAL OF THE ASSESSEE IN TOTO ONLY ON THE GROUND OF SUBMISSION OF CONDONATION OF DELAY OF FORM NO.10 ORDER, IGNORING THE PROVISIONS OF SECTION 121(A)(I)(B) OF THE ACT; THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE INSPITE OF THE FACT THAT THE AUDIT REPORT IN FORM 10B WAS ALSO DELAYED AND THE ASSESSEE HAD NOT APPLIED FOR CONDONATION OF DELAY, IN THE LIGHT OF CIRCULAR NO.10/2019; AND THAT THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) IS UNSUSTAINABLE IN LAW AND THE SAME BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER BE REVOKED. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS A STATE GOVERNMENT SOCIETY AND REGISTERED U/S 12A OF THE I.T ACT, VIDE REGISTRATION NO. 61/21/2007-08 DATED 29.10.2007 (APB:3); THAT FOR ASSESSMENT YEAR 2016-17, FORM NO. 10B HAS BEEN OBTAINED AND E-FILED ON 04.02.2017 (APB:4&5) BY THE AUDITORS, C. A. KRISHNA RATAN RASTOGI; THAT THE SAID FORM WAS E-VERIFIED ON 20.04.2017; THAT AS PER PARA 4(1) OF THE CBDT CIRCULAR NO. 10/2019 DATED 22.05.2019 (APB:6), THE CBDT HAS CONDONED, IN GENERAL, THE DELAY IN FILING OF FORM NO. 10B; THAT THE RETURN OF INCOME HAD BEEN E-FILED ON 15.02.2017, WHICH WAS REJECTED/INVALIDATED BY PAGE 3 OF 6 THE CPC, DUE TO WHICH REASON, THE ITR-7 WAS AGAIN E-FILED ON 31.03.2018 (APB:7&8); THAT IN VIEW OF THE ABOVE FACTS, THE AUDIT REPORT IN FORM NO. 10B HAS BEEN OBTAINED BEFORE FILING OF THE RETURN OF INCOME AND HAS BEEN E-FILED AS PER PROVISIONS OF SECTION 139(4) OF THE I.T ACT AS APPLICABLE FOR ASSESSMENT YEAR 2016-17; THAT IN VIEW OF THE AFORESAID CBDT CIRCULAR, AS STATED IN PARA 4(I) THEREOF, THE DELAY IN FILING OF FORM NO. 10B HAS BEEN CONDONED IN GENERAL BY THE CBDT; THAT THUS, THERE IS NO FURTHER REQUIREMENT OF ORDER FOR CONDONING THE DELAY IN FILING OF FORM NO. 10B; THAT FURTHER, THE LD. CIT (EXEMPTIONS), AS PER ORDER U/S 119(2)(B) OF THE ACT, DATED 19.02.2019 (APB:9&10), HAS ALREADY CONDONED THE DELAY IN FILING THE 'INCOME TAX RETURN' AND 'FORM NO. 10'; THAT IN VIEW OF THE ABOVE STATED FACTS, THE BENEFIT OF SECTION 11 OF IT ACT HAS RIGHTLY BEEN ALLOWED BY THE LD. CIT(A), AFTER CONSIDERING THE ORDER OF THE LD. CIT(EXEMPTIONS), PASSED U/S 119(2)(B) OF THE I.T ACT, DATED 19.02.2019, BY WHICH THE DELAY IN FILING OF THE INCOME TAX RETURN AND FORM NO. 10 HAS BEEN CONDONED AFTER CONSIDERING THE AFORESAID CBDT CIRCULAR; AND THAT SINCE THE DELAY IN FILING FORM NO. 10B HAS ALREADY BEEN CONDONED IN GENERAL BY THE CBDT, AS PER CIRCULAR NO. 10/2019 DATED 22.05.2019, THERE EXISTED NO SEPARATE REQUIREMENT OF ORDER CONDONING THE DELAY IN FILING FORM NO. 10B, BY THE LD. CIT(EXEMPTION), LUCKNOW. 6. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE PROVISIONS OF SECTION 11(1), AS APPLICABLE FOR ASSESSMENT YEAR 2016-17, I.E., THE YEAR UNDER CONSIDERATION, EXCLUDE, SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63 OF THE ACT, FROM THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME, INTER ALIA, INCOME DERIVED FROM THE PROPERTY HELD UNDER THE TRUST ONLY FOR CHARITABLE PURPOSES, TO THE EXTENT TO PAGE 4 OF 6 WHICH SUCH INCOME IS APPLIED FOR SUCH PURPOSES IN INDIA, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY. 7. ACCORDING TO SECTION 11(2) OF THE ACT, WHERE EIGHTY-FIVE PER CENT OF THE INCOME IS NOT APPLIED FOR CHARITABLE PURPOSES, THE CHARITABLE TRUST OR INSTITUTION MAY ACCUMULATE OR SET APART, THE WHOLE OR PART OF ITS INCOME FOR APPLICATION TO SUCH PURPOSES. SUCH INCOME, SO ACCUMULATED, OR SET APART, SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE TRUST IN THE YEAR OF RECEIPT OF INCOME. SUCH PERSON HAS TO FURNISH A STATEMENT IN THE PRESCRIBED FORM, I.E., FORM NO.10, AND IN THE PRESCRIBED MANNER, TO THE ASSESSING OFFICER, STATING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN NO CASE EXCEED FIVE YEARS. 8. IN THE CASE OF THE ASSESSEE, THE DELAY IN FILING FORM NO.10 OCCURRED DUE TO A TECHNICAL ERROR. SO FAR AS REGARDS THE CONTENTION REGARDING THE LD. CIT(A) HAVING IGNORED THE PROVISIONS OF SECTION 12A(1)(B) OF THE ACT, THIS PROVISION STATES THAT THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT SHALL NOT APPLY IN RELATION TO THE INCOME OF ANY TRUST OR INSTITUTION UNLESS, IN A CASE WHERE THE TOTAL INCOME OF THE TRUST OR INSTITUTION AS COMPUTED UNDER THE INCOME TAX ACT WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECTIONS 11 AND 12 OF THE ACT EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX IN ANY PREVIOUS YEAR, THE ACCOUNT OF THE TRUST OR INSTITUTION FOR THAT YEAR HAVE BEEN AUDITED BY AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SECTION 288(2) OF THE ACT, BEFORE THE SPECIFIED DATE REFERRED PAGE 5 OF 6 TO IN SECTION 44AB OF THE ACT AND THE PERSON IN RECEIPT OF THE INCOME FURNISHES BY THAT DATE THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED. 9. AS CONTENDED BEFORE THE LD. CIT(A), IN THE APPLICATION FOR CONDONATION OF DELAY, THE AMOUNT ACCUMULATED OR SET APART HAD BEEN INVESTED OR DEPOSITED BY THE ASSESSEE IN THE FORMS OR MODES SPECIFIED IN SECTION 11(5) OF THE ACT AND, THEREFORE, THE LD. CIT(A) WAS CORRECT IN RELYING ON THE ORDER DATED 19.2.2019 PASSED UNDER SECTION 119(2)(B) OF THE ACT IN THE ASSESSEES OWN CASE, WHEREBY THE DELAY IN FILING FORM NO.10 STOOD CONDONED BY THE CIT (EXEMPTIONS), AND THAT THEREFORE, THE LD. CIT(A) WAS CORRECT IN ALLOWING THE APPEAL OF THE ASSESSEE. THE ABOVE SUBMISSIONS HAVE NOT BEEN CONTROVERTED BEFORE US. THE ORDER DATED 19.2.2019 PASSED BY THE CIT (EXEMPTIONS) UNDER SECTION 119(2)(B) OF THE ACT IS PART OF RECORD AND THE SAME HAS BEEN RELIED ON BY THE LD. CIT(A) IN HOLDING THAT THE ADDITION MADE BY THE ASSESSING OFFICER BY DENYING THE ACCUMULATION UNDER SECTION 11(2) OF THE ACT, HAD BECOME INFRUCTUOUS. IT WAS, THEREFORE, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF SECTION 11 OF THE ACT TO THE ASSESSEE AND COMPUTE THE INCOME AFTER ALLOWING THE ACCUMULATION UNDER SECTION 11(2) OF THE ACT. 10. SO FAR AS REGARDS THE DEPARTMENTS OBJECTION THAT THE AUDIT REPORT IN FORM NO.10B WAS ALSO DELAYED AND SUCH DELAY HAD NEITHER BEEN APPLIED FOR CONDONATION OF DELAY NOR BEEN CONDONED, IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE DELAY IN FILING FORM NO.10B HAS BEEN CONDONED, IN GENERAL, BY THE CBDT, VIDE CIRCULAR NO.10/2019, DATED 22.5.2019, IT HAS BEEN STATED AT THE BAR BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AUDIT REPORT IN FORM NO.10B HAD BEEN E-FILED ON 4.2.2017 BY THE AUDITOR PAGE 6 OF 6 WITHIN THE TIME PRESCRIBED UNDER THE ACT, I.E., BEFORE THE TIME PRESCRIBED FOR FILING THE RETURN OF INCOME. THE SAME WAS E- VERIFIED ON 20.4.2017, AS AVAILABLE FROM THE E-VERIFICATION SCREEN- SHOT, AND AS ALSO AVAILABLE FROM THE WEBSITE OF THE DEPARTMENT. A COPY OF SUCH E-VERIFICATION SCREEN-SHOT, HAVING ACKNOWLEDGEMENT NO.761769971200417, HAS BEEN PLACED ON RECORD. THEREFORE, THIS OBJECTION IS ALSO OF NO AID TO THE DEPARTMENT AND THE SAME IS ALSO REJECTED. THEREFORE, FINDING NO MERIT IN THE GROUNDS OF APPEAL BY THE DEPARTMENT, THE SAME ARE REJECTED. 11. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/09/2021. SD/ - SD / - [T. S. KAPOOR] [A. D. JAIN] ACCOUNTANT MEMBER VICE PRESIDENT DATED:07/09/2021 JJ: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR