MAHAPRABHU RAM MULKH HI-TECH EDUCATION SOCIETY,YAMUNA NAGAR V. DCIT (E)(C-2) CHANDIGARH, CHANDIGARH

ITA 328/CHANDI/2024

AI Insights

The case involves the Mahaprabhu Ram Mulkh Hi-Tech Education Society, a charitable society registered under section 12AB of the Income Tax Act, 1961, which appealed against the order of the CIT(A) confirming the denial of exemption under section 11 for revenue and capital expenditures amounting to Rs. 5,31,18,699 and Rs. 50,57,157 respectively. The initial denial by the Assessing Officer was based on the late filing of the audit report in Form 10B. The CIT(A) upheld this decision, leading to the society's appeal to the Tribunal. Subsequently, the CIT(E) condoned the delay in filing the audit report, which was not considered by the CIT(A) at the time of her decision. The Tribunal, acknowledging the condonation of delay, directed the Assessing Officer to grant the claimed exemption.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107751 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 30-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Assessee Lawyers: PARIKSHIT AGGARWAL; C.A
• Keywords: Condonation of delay; Revenue expenditure; Capital expenditure
• Section: 250; 143(1); 11; 119(2)(b); 10B

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE ŵी िवŢम िसंह यादव, लेखा सद˟ एवं ŵी परेश म. जोशी, Ɋाियक सद˟ BEFORE: SHRI. VIKRAM SINGH YADAV, AM & SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ ITA NO. 328/Chd/2024 िनधाŊरण वषŊ / Assessment Year : 2020-21 Mahaprabhu Ram Mulkh Hi-Tech Education Society Yog Divya Mandir, Sector-7, Railly, B.O. Naraingarh, Yamunanagar,Haryana बनाम The DCIT(E)(C-2) Chandigarh ˕ायी लेखा सं./PAN NO: AABTM8670M अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Parikshit Aggarwal, C.A राजˢ की ओर से/ Revenue by : Smt. Kusum Bansal, CIT, DR सुनवाई की तारीख/Date of Hearing : 30/09/2024 उदघोषणा की तारीख/Date of Pronouncement : 14/10/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A), Addl/JCIT(A)-7, Delhi dt. 01/02/2024 pertaining to A.Y. 2020-21. 2. In the present appeal, the Assessee has raised the following grounds: 1. That on the facts, circumstances and legal position of the case, Worthy CIT(A) in Appeal No. NFAC/2019-20/10145701 has erred in passing order u/s 250 dt. 01.02.2024 as the same is in contravention of provisions of s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”). 2. That on facts, circumstances and legal position of the case, the Worthy CIT(A) erred in confirming the action of Ld. AO of not allowing exemption u/s 11 towards Revenue Expenditure of Rs. 5,31,18,699/- and Capital Expenditure of Rs. 50,57,157/- while processing the return u/s 143(1). 3. That on facts, circumstances and legal position of he case, Worthy CIT(A) has erred in confirming the action of Ld. AO in processing the return u/s 143(1) without considering the Audit Report duly filed within time in Form 10B. 4. That on facts, circumstances and legal position of the case, the order passed by Ld. AO and then by Worthy CIT(A) deserves to be quashed since the 2 same have been passed without affording reasonable opportunity of being heard to the appellant. 5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 3. During the course of hearing, the Ld. AR submitted that the assessee is a charitable society registered u/s 12AB of the Income-tax Act, 1961 ('the Act'). For the year under reference, the assessee had filed ITR on 15.02.2021 declaring Nil Income after claiming exemption u/s 11 and appending thereto the audit report in Form 10B which was also filed on 15.02.2021. 3.1 It was submitted that the above ITR was processed u/s 143(1) by the Ld. AO/CPC vide order dated 24.12.2021 wherein exemption claimed u/s 11 towards revenue expenditure of Rs. 5,31,18,699/- and capital expenditure of Rs. 50,57,157/- was denied on the ground of late filing of the audit report in Form 10B. 4. Aggrieved with the same, the assessee filed appeal before the Ld. CIT(A) who has dismissed the appeal by holding that where there is a delay in filing of audit report, the claim of exemption u/s 11 is not allowable in terms of section. 12A and against the said findings, the assessee is in appeal before the Tribunal. 4.1 It was submitted that the assessee had since moved an application u/s 119(2) for condonation of delay for the delayed filing of the audit report before ld CIT(E) vide its application dt. 11.12.2023. The said prayer has now been accepted vide order u/s 119(2)(b) dt. 17.05.2024 passed by ld CIT(E) wherein she has condoned the said delay. It was submitted that in view of above factual development, when the foundation of denial of exemption u/s 11 was the delayed filing of audit report and when such delay now stands condoned by ld 3 CIT(E), the said denial of exemption u/s 11 by the Ld. AO (CPC) in the order u/s 143(1) deserves to be reversed and the assessee be granted the necessary relief. 5. The ld CIT/DR is heard who has relied on the order so passed by the lower authorities. At the same time, it was fairly submitted that where the delay in filing the audit report has been condoned by the ld CIT(E), the Revenue has no objection where the matter is set-aside to the file of the AO to consider and give necessary effect thereto. 6. We have heard the rival contentions and purused the material available on record. Admittedly, the assessee is a charitable society duly registered u/s 12AB of the Act and the sole reason for the denial of claim of exemption claimed u/s 11 towards revenue expenditure of Rs. 5,31,18,699/- and capital expenditure of Rs. 50,57,157/- was on account of delayed filing of the audit report in Form 10B. The delay in filing the audit report has since been condoned by the ld CIT(E) vide her order passed u/s 119(2)(b) of the Act dated 17/05/2024 and since the same has been passed after passing of the impugned order by the ld CIT(A) dated 01/02/2024, it couldn’t be taken into consideration by the ld CIT(A) resulting in sustenance of denial of exemption. A copy of the order so passed by the ld CIT(E) has been placed on order and a copy thereof already marked to the AO and shared with the ld CIT/DR as well. In normal course, the same should have been given effect to by the AO himself being the order of the higher authority which is binding on the AO. Given that the assessee has come in appeal before us, apparently, for the reason that necessary effect has not been given to the said order by the AO, we hereby direct the AO to take the same into consideration, and to allow the necessary exemption so claimed u/s 11 by the assessee society in its return of income and allow the necessary relief to the assessee society. In the result, the addition so made by virtue of denial of 4 claim of exemption u/s 11 while processing the return of income u/s 143(1) is hereby directed to be deleted. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 14/10/2024. Sd/- Sd/- परेश म. जोशी िवŢम िसंह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟/ ACCOUNTANT MEMBER AG आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "