JAMNAGAR GURJAR SUTAR GNATI,JAMNAGAR V. .THE NFAC, DELHI, DELHI

ITA 80/RJT/2024

AI Insights

The case involves Jamnagar Gurjar Sutar Gnati Sarvesh Gohil & Associates, a charitable trust, appealing against the order of the National Faceless Appeal Centre (NFAC) which confirmed an addition of Rs. 46,37,181 to the assessee's income for not filing Form 10B in the required timeframe. The Tribunal noted that the delay in filing the appeal was due to the mistake of the assessee's advocate and tax consultant, and thus, the delay was condoned. The Tribunal referenced similar cases where delays caused by the tax professional's error were condoned, emphasizing the principle that the assessee should not suffer due to the mistakes of their representatives.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26367 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Other Referred Cases: M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT, CIT v. Xavier Kelavani Mandal (P.) Ltd., Sarvodaya Charitable Trust v. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: SAGAR SHAH; LD
• Keywords: Condonation of delay; Opportunity of being heard; Principle of natural justice; Charitable institution; Benefit of exemption
• Section: 119; 143(1); 11; 139(1); 43; 12A; 119(2)(b); 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 80/RJT/2024 Assessment Year: (2018-19) (Hybrid Hearing) Jamnagar Gurjar Sutar Gnati Sarvesh Gohil & Associates officer no. 202, 2nd Floor, Opp. Saint Ann’s School, Jamnagar - 361006 Vs . National Faceless Appeal Centre Govt. of India, Ministry of Finance,Department of Revenue North Block, New Delhi – 110001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAAJT2544A (Assessee) (Respondent) Assessee by : Shri Sagar Shah, Ld. A.R. Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 12/12/2024 Date of Pronouncement : 19/12/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2018-19, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), which in turn arises out of an assessment order passed by Assessing Officer (in short ‘the AO”) u/s 143(1) of the Income Tax Act, 1961. 2. Grounds of appeal raised by the assessee are as follows: “1. The grounds of appeal mentioned as below are without prejudice to one another. ITA 80/Rjt/2024 Jamnagar Gurjar sutar gnati Vs NFAC Page | 2 2. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter para referred to as “NFAC”) erred in passing non- speaking order which is against the principles of natural justice and equity of India. 3. The Ld NFAC, dismissed the appeal without following, the principles of natural justice and equity of India and without affording a real, reasonable and effective opportunity of being heard to be afforded. 4. The Ld. NFAC erred both in facts and as in law in rejecting the assessee’s grounds of appeal relating to late filing of 10B, on online portal of the Income Tax Act, 1961, be held as invalid and unjustified. 5. The order of the NFAC, in so far as confirming the addition made of Rs. 46,37,181/-, on grounds that the assessee has not filed Form – 10B (in online mode) one month prior to the due date of furnishing the return of income u/s 139(1) of the Act. 6. On the facts and circumstances of the case, the NFAC has erred both in facts as in law by upholding the CPC’s actions of making addition without considering the facts and circumstances of the case the assessee’s accounts are duly audited under the Act and 10B report was also prepared but due to the inadvertent mistake of the article Cleark/Employee, the report was successfully uploaded but not validated due to which this error is occurred. 7. The assessees has approached for condonation of delay u/s 119(2)(b) before CIT(Exemption) Ahmedbad as on 15.03.2021 to allow 10B which was rejected vide order dated 03.06.2021. The trust has genuinely skipped to filled the10B within due date to the mistake of article/employee as he was on belief that the same has been uploaded online. The facts was that the Form 10B submitted online by command of submission button but due to technical Error on portal was omitted to validate and the intention of the assessee was not deliberated and malafide for not filing the 10B as per the IT Act. Hence the disallowances of claim of the assessee u/s 11 upheld by the Ld NFAC is unjustified and against the principles of natural justice and equity and may kindly be deleted. 8. The assessee is being a charitable trust, is registered with the charity commissioner for more than past 50 years as well as Income tax Authorities under section 12A of the Income Tax Act, 1961 for more than past 30 years. The books of accounts of the trust are being audited regularly and the return of Income is also filled timely without any issue. For AY 2018-19 the due date of filing the return of income was extended from 30th September 2018 to 31st October 2018, vide order under section 119 of the Act, 1961 dated 8th October 2018. The consultant of the assessee filled audit Report in Form 10B under section 12A(b) of the I.T. Act, 1961, on 27.09.2018, which has also mentioned in ITR form filled on 31.10.2018. Unfortunately due to technical problem in site the same was submitted but not validated and the consultant was unawarded about the facts that after pressing confirming of submission button the same was not uploaded online due to technical fault on site of Income Tax. ITA 80/Rjt/2024 Jamnagar Gurjar sutar gnati Vs NFAC Page | 3 For the unintentional technical error of the consultant the trust cannot be penalized by way of denying exemption under section 11 of the I.T. Act. 9. Your Honor’s assessee craves to leave to add, amend, alter or withdraw any or more grounds of appeal or before the hearing of appeal.” 3. The appeal filed by the assessee for Assessment Year 2018-19, is barred by limitation by 280 days. The assessee has moved a petition requesting the Bench to condone the delay. Learned Counsel for the assessee submitted that due to mistake of advocate of the assessee, the assessee could not file the appeal, on time. The assessee has submitted the documents to the consultant timely manner but he has not made any efforts to file the appeal on time. Due to mistake on the part of consultant, the assessee should not suffer or deny the justice, therefore, in the interest of justice, the appeal should be admitted. 4. On the other hand, Learned DR for the Revenue, opposed the prayer of the assessee, to condone the delay and stated that assessee has failed to explain the sufficient cause to condone the delay. Therefore, on such flimsy reasons, narrated by the learned Counsel for the assessee, the delay should not be condoned and appeal of the assessee may be dismissed. 5. We have heard both the parties on this preliminary issue. We note that delay has occurred, in filing the appeal, due to the mistake of advocate/consultant of the assessee. The assessee should not suffer because of the mistake committed by his Advocate and Tax consultant, therefore, we are of the view that delay should be condoned. For this, the reliance is placed on the decision of I.T.A.T., 'C' Bench, Kolkata in the case of M/s. Garg Bros. Pvt. Ltd. & Others vs. DCIT [ITA Nos.2519 to 2521/Kol/2017, order dated 18.04.2018, wherein under similar set of facts ITA 80/Rjt/2024 Jamnagar Gurjar sutar gnati Vs NFAC Page | 4 and reasons, the Hon'ble Tribunal was pleased to condone the delay of 211 days by holding as under: \"3. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the application for condonation of delay, we are of the considered opinion that assessee was under a bona fide belief that the impugned order of Pr. CIT was not appealable before this Tribunal since they were not advised by their Tax Consultants about this legal right. Later on, when a Senior Lawyer advised them to file an appeal, the assessees immediately took steps to file the appeals. Therefore, the delay caused. We note that delay was occurred because of the wrong advice of the Tax Professional for which assessees cannot be penalized. For the ends of justice, we condone the delay and admit the appeal for hearing. 6. Having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 7. The facts of the case which can be stated quite shortly are as follows: The assessee filed its return of income for the assessment year (AY) 2018-19, on 31.10.2018 and subsequently revised its return of income, on 24.01.2019, declaring total income at Rs. 3,213/-. The return was processed by the AO-CPC and an intimation u/s. 143(1) of the Act, was passed on 30.09.2019, by disallowing the amount of Rs.31,91,549/-, applied during the previous year, on revenue account, and amount of Rs. 5,63,782/- , on account of amount accumulated or set apart for application to charitable or religious purpose or for the stated purposes and Rs. 8,81,850/-, on account of voluntary contribution, thus the disallowance totaling to Rs. 46,37,181/- were made in the intimation. 8. Aggrieved, by the order of the assessing officer, the assessee carried the matter in appeal before the ld CIT(A) who has dismissed the appeal of the assessee stating that assessee has not filed Form- ITA 80/Rjt/2024 Jamnagar Gurjar sutar gnati Vs NFAC Page | 5 10B (in the online mode) one month prior to the due date of furnishing the return of income u/s 139(1) of the Act. 9. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. The Ld. Counsel for the assessee argued that assessee’s issue is covered by the judgement of the coordinate bench of ITAT Rajkot. Therefore, delay should be condoned by filing Form No.10B, and matter may be remitted back to the file of the Assessing Officer for fresh adjudication. On the other hand, Ld. DR for the Revenue stated that order passed by the Assessing Officer may be confirmed. 10. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that the solitary issue involved in this appeal is that, the assessee has not filed Form-10B-Audit Report (in the online mode) one month prior to the due date of furnishing the return of income u/s. 139(1) of the Act. However, the assessee has filed Form No.10B during the appellate proceedings, before the ld. CIT(A), therefore, it would be a sufficient compliance, if the assessee had filed the Form No.10B, either during the assessment proceedings, before the assessing officer, or during the appellate proceedings before the ld. CIT(A). 11. Thus, Audit report can be filed, even at a later stage, either before the assessing officer, or before any appellate authority by showing sufficient cause [CIT v. Xavier Kelavani Mandal (P.) Ltd. [2014] 41 taxmann.com ITA 80/Rjt/2024 Jamnagar Gurjar sutar gnati Vs NFAC Page | 6 184/221 Taxman 43 (Mag.)]. Where assessee had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No. 10B [Sarvodaya Charitable Trust v. ITO [2021] 125 taxmann.com 75/278 Taxman 148 (Guj.)]. Based on these facts and circumstances, we direct the assessing officer, to examine form No. 10B and adjudicate the issue in accordance with law. For statistical purposes, the appeal of the assessee is treated to be allowed. 12. In the result, the appeal of the assessee is allowed for statistical purposes, in above terms. Order is pronounced on 19/12/2024 in the open court. Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot *Ranjan True Copy Ǒदनांक/ Date: 19/12/2024 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "