Indiranagar Preparation School, Bangalore V. Assistant Commissioner Of Income Tax (Exemptions), Circle 1, Bangalore

ITA 668/BANG/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7037 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-01-2021
• Assessment Year: 2018-2019
• Appeal Filed On: 05-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE J R
• Assessee Lawyers: B R SUDHEENDRA
• Keywords: Charitable institution; Opportunity of being heard; Condonation of delay
• Section: 234B; 12A; 10B; 143(1); 201; 113; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BANGALORE BENCH BEFORE SHRI N.V VASUDEVAN, VICE-PRESIDENT ITA NO. 668 /BANG/20 20 ASSESSMENT YEAR : 201 8 - 1 9 M/S. INDIRANAGAR PREPARATION SCHOOL, 2177, 5 TH CROSS, 18 TH MAIN HAL II STAGE, BENGALURU 560 008. PAN : A AATI 0704 P VS. ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE 1, BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. B. R. SUDHEENDRA , A DVOCATE REVENUE BY : SHRI. GANESH R. GHALE , J R. STANDING COUNSEL DATE OF HEARING : 2 7 . 0 1.2021 DATE OF PRONOUNCEMENT : 2 7 . 0 1.2021 O R D E R PER SHRI N.V VASUDEVAN, VICE-PRESIDENT : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 31.08.2020 OF CIT(A)-14, BENGALURU, RELATING TO ASSESSMENT YEAR 2018-19. 2. THE ASSESSEE IS A CHARITABLE TRUST RUN AND UNDER THE CONTROL OF KARNATAKA EDUCATION TRUST (A CHARITABLE TRUST) REGISTRATION UNDER SECTION 12A OF THE ACT WITH REGISTRATION NO.718/10ANO1B1/K-211 DATED 26.11.1991. THE ASSESSEE RUNS A PREPARATORY SCHOOL. FOR THE YEAR UNDER CONSIDERATION, THE RETURN OF INCOME OF THE ASSESSEE WAS ELECTRONICALLY FILED ON 31.08.2018 UNDER ITS PAN AAATI0704P. THE AUDIT REPORT FORM 10B HAS BEEN FILED MANUALLY ON 24.10.2018 WITHIN THE DUE DATE I.E 31.10.2018. DURING THE YEAR. THE GROSS RECEIPTS OF THE ASSESSEE WAS RS.3,66,468/- AND THE APPLICATION TOWARDS THE OBJECTS WAS RS.57.60,894. IN THE INCOME TAX RETURN ITA NO.668/BANG/2020 PAGE 2 OF 4 FILED ON 31.08.2018 THE ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 10(23C)(IIIAD) BESIDES DEDUCTION U/S.11 OF THE ACT. 3. THE RETURN WAS PROCESSED AND INTIMATION U/S 143(1) DATED 30.09.2019 WAS PASSED IN WHICH THE AO DENIED EXEMPTION UNDER SECTION 11 FOR THE REASON THAT FORM NO.10B HAD NOT BEEN FILED ALONG WITH FILING THE RETURN OF INCOME THAT WAS FILED ELECTRONICALLY ON 31.8.2018. CONSEQUENTLY, THE ENTIRE GROSS RECEIPTS OF RS.3,66,468 WAS CONSIDERED AS TOTAL INCOME. AMOUNT OF TAX PAYABLE (INCLUDING INTEREST UNDER SECTION 234B AND 234C) WAS DETERMINED AT RS.1 39,331/-. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED APPEAL BEFORE CIT(A) CONTENDING THAT THE , CPC ERRED IN DENYING EXEMPTION UNDER SECTION 11 FOR THE REASON THAT THE AUDIT REPORT IN FORM 10B [EFILED ON 24.10.2018] WAS NOT EFILED ALONG WITH OR BEFORE EFILING THE RETURN OF INCOME ON 31.08.2018. THE ASSESSEE CONTENDED THAT CPC ERRED IN ALTERNATIVELY NOT GRANTING EXEMPTION UNDER SECTION 10(23C)(IIIAD) AS THE APPELLANT BEING AN EDUCATION INSTITUTION SATISFIES THE REQUIREMENTS LAID DOWN UNDER RULE 2BC OF HAVING ANNUAL RECEIPTS LESS THAN RS. 1 CRORE, INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSES OF PROFIT. IN THE COURSE OF PROCEEDINGS BEFORE THE CIT(A), THE ASSESSEE ALSO MADE AN ADJOURNMENT REQUEST 27.08.2020 ON THE GROUND THAT A PETITION HAS BEEN FILED BY THE ASSESSEE BEFORE CIT (EXEMPTIONS) FOR CONDONATION OF DELAY IN FILING OF AUDIT REPORT IN FORM NO 10B AND THE SAME WAS PENDING AND HENCE THE HEARING OF APPEAL MAY KINDLY BE TAKEN UP AFTER DISPOSAL OF THE SAID PETITION BY CIT (EXEMPTIONS). 5. THE CIT(A) ISSUED A NOTICE DATED 21.08.2020 TO THE ASSESSEE TO MAKE ITS SUBMISSIONS BY 28.08.2020 THROUGH E-FILING PORTAL OR EMAIL. ACCORDING TO THE CIT(A), NO SUBMISSIONS WERE FILED BY THE ASSESSEE AND HE THEREFORE PROCEEDED TO DECIDE THE APPEAL ON MERITS ON THE BASIS OF MATERIAL ON RECORD. THE CIT(A) ULTIMATELY DISMISSED THE APPEAL CONFIRMING THE ORDER OF THE AO. ITA NO.668/BANG/2020 PAGE 3 OF 4 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN RESPONSE TO THE NOTICE OF THE CIT(A) DATED 21.08.2020, A REQUEST FOR ADJOURNMENT WAS MADE ON 27.08.2020, COPY OF WHICH IS AT PAGE 104 OF THE ASSESSEES PAPER BOOK. IN THE SAID SUBMISSION, THE ASSESSEE HAS PLEADED AS FOLLOWS: IN RESPECT TO THE ABOVE NOTICE, WE WISH TO STATE THAT THE RETURN OF INCOME WAS ELECTRONICALLY FILED ON 31.08.2018. THE AUDIT REPORT IN FORM 10B DATED 24. 10.2018 WAS E-FILED ON THE SAME DATE, WHICH IS WITH IN THE DUE DATE I.E. 31.10.2018. THE AFORESAID RETURN WAS PROCESSED AND INTIMATION U/S 143(1) DATED 30 .09.2019 WAS PASSED. IN THE SAID INTIMATION, THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX (CPC), BENGALURU HAS DENIED EXEMPTION UNDER SECTION 11 OF THE ACT FOR THE REASON THAT THE ASSESSEE HAS NOT E-FILE D THE AUDIT REPORT IN FORM 10B ALONG WITH OR BEFORE FILING OF THE RETURN OF INCOME. CONSEQUENTLY, DEMAND COMPRISING OF TAX AND INTEREST TOTALLY AMOUNTING TO RS. 1,39,331 IS GENERATED AND THE SHOWN AS PAYABLE BY US. IN THIS CONNECTION, WE HAVE FILED A PETITION UNDER SECTION 1 19(2)(B) WITH THE HONOURABLE COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE ON 29.06.2020 SEEKING CONDONATION FOR THE DELAY IN E-FILING THE AUDIT REPORT. FURTHER, WE HAVE ALSO FILE D A REMINDER LETTER WITH THE HONOURABLE COMMISSIONER ON 24.08.2020 REQUESTING TO KINDLY EXPEDIATE THE PROCESS. THE SAID REMINDER LETTER IS ATTACHED HEREWITH. IN VIEW OF THE SAME, WE REQUEST YOUR HONOUR TO KINDLY KEEP THE PROCEEDINGS IN ABEYANCE TILL THE CONDONATION PETITION IS DISPOSED BY THE HONOURABLE COMMISSIONER OF INCOME TAX (EXEMPTIONS). BANGALORE. 7. LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO PAGE 113 OF THE ASSESSEES PAPER BOOK WHEREIN THE CIT(E), BENGALURU, HAS CONDONED THE DELAY IN FILING FORM 10B FOR ASSESSMENT YEAR 2018-19 BY ORDER DATED 08.09.2020. 8. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE FACT THAT THE DELAY IN FILING FORM 10B HAS BEEN CONDONED AND IN VIEW OF THE FACT THAT THE ASSESSEE DID NOT HAVE PROPER OPPORTUNITY OF BEING HEARD BEFORE THE CIT(A), WE DEEM IT FIT AND PROPER TO RESTORE THE ISSUE WITH REGARD TO GRANT OF EXEMPTION TO THE ASSESSEE UNDER SECTION 11 OF THE ITA NO.668/BANG/2020 PAGE 4 OF 4 INCOME TAX ACT, 1961, FOR FRESH CONSIDERATION BY THE AO/CPC AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (B. R. BASKARAN) (N.V VASUDEVAN) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED : 27.01.2021 /NS/* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.