MATUSHRI SHAMBAI LOHANA MAHAJANWADI TRUST,KALYAN V. DCIT, CPC, BANGALORE

ITA 5526/MUM/2024

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The case involves Matushri Shambai Lohana Mahajanwadi Trust appealing against the order of the CIT(A) which upheld the additions made by the Assessing Officer under Section 143(1) of the Income Tax Act, 1961. The additions were related to the denial of exemptions claimed under Sections 11(1) and 11(2) due to procedural issues with the filing of Form 10B. The Tribunal found that the Form 10 was available at the time of processing the return, referencing the decision of the Bombay High Court in the case of Sakal Relief Fund, which supported the assessee's position that the late filing of Form 10 did not preclude the trust from claiming exemptions under Section 11.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35502 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2017-2018
• Other Referred Cases: Sakal Relief Fund, Association of Corporation and Apex Societies of Handlooms, Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust, Nagpur Hotel Owners' Association
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI; DR
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Rectification of order; Benefit of exemption
• Section: 143(1); 139(1); 139(4)

Judgement Text

"| आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 5526/Mum/2024 Assessment Year: 2017-18 Matushri Shambai Lohana Mahajanwadi Trust, Kalyan Mahajanwadi, S.V. Patel Road Kalyan (W), Dist. Thane Maharashtra - 421301 [PAN: AAATM4161E] Vs DCIT, CPC, Bangalore अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Subodh Ratnaparkhi, C.A. Revenue by : Shri Asif Karmali, Sr. D/R सुनवाई की तारीख/Date of Hearing : 04/02/2025 घोषणा की तारीख /Date of Pronouncement: 04/02/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. Addl./JCIT(A)-3, Chennai dated 05/10/2023, [hereinafter ‘the ld. CIT(A)’], pertaining to AY 2017-18. 2. The appeal is time barred by limitation. We have considered the cause for the delay mentioned in the affidavit and are convinced that the assessee was prevented by reasonable and sufficient cause for not filing the appeal on time. The delay is condoned. 3. The grievance of the assessee reads as under:- “1. The Hon. CIT(A) erred in upholding the addition of Rs.29,88,908/- made vide intimation u/s 143(1) dt. 25.03.2019, denying the exemption claimed us 11(1) of the I. T. Act, 1961, due to delay in uploading of form no. 10B, which action of the Hon CIT(A) being not justified, the benefit of exemption available us 11 may kindly be granted to the appellant. 2. The Hon. CIT(A) erred in upholding the addition of Rs. 11,00,000/- made vide intimation u/s 143(1) dt. 25.03.2019, denying the exemption claimed u/s 11(2) in I.T.A. No. 5526/Mum/2024 2 respect of income accumulated and set apart for application on the objects of the trust, which action being unjustified, the benefit of exemption claimed u/s 11(2) to the extent of Rs. 11,00,000/- be kindly allowed. 3. The appellant craves leave to add, alter, amend, delete and/or vary any of the above grounds of appeal at any time before the decision of the appeal.” 4. At the very outset, the ld. Counsel for the assessee stated that since he has been allowed relief by the AO by way of rectification order, Ground No. 1 is not pressed and the same is dismissed as not pressed. 5. Coming to Ground No. 2, we find that the assessee furnished Form 10 on 20/01/2018 and the return was filed on 22/01/2018 which means that both Form 10 and the return of income were filed u/s 139(4) and not u/s 139(1) of the Act. However, since the intimation is dated 25/03/2018, it means that Form 10 was available at the time of processing of the return. 6. The Hon’ble High Court of Bombay in the case of Sakal Relief Fund (2017) 248 taxmann 31, had the occasion to consider a similar situation as under:- “9. Being aggrieved by the impugned order, the Revenue is in appeal before us. Mr. Tejveer Singh, learned Counsel for the Revenue submits that Form 10, in terms of Rule 17 of the Rules, is required to be filed before the expiry of the time allowed under Section 139(1) of the Act to file a return of income. In this case, it is submitted that Form 10 has been filed much after the expiry of time to file return of income under Section 139(1) of the Act. Moreover, in this case, it is submitted that Form 10 was not filed along with return of income, thus the Respondent is not entitled to the benefit of accumulation of income under Section 11 of the Act. In any case, Form 10 was filed by the Respondent not during the assessment proceedings but during the re- assessment proceedings. Therefore, it cannot be said to be in compliance of Rule 17 of the Rules. In the above circumstances, it is submitted that the order of the Tribunal is suspect and the appeal must be entertained.” 6.1. And held as under:- “12. Today when the matter was called out, Mr. Tejveer Singh, learned Counsel for the Revenue does not dispute the fact that the decision of the Delhi High Court in Association of Corporation and Apex Societies of Handlooms (supra) I.T.A. No. 5526/Mum/2024 3 and of this Court in Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust (supra) would apply to the present facts. Therefore, Revenue accepts that even if the Form 10 is filed during the re-assessment proceedings, the benefit of accumulation under Section 11(2) of the Act is available. So also, the time allowed in Rule 17 of the Rules for furnishing the form before the expiry of time to file the return of income under Section 139(1) of the Act get extended to include the time within which a return of income could be filed under Section 139(4) of the Act. Therefore, filing of Form 10 during re- assessment proceedings is filing of the same within the time allowed for furnishing the return of income under Section 139(4) of the Act. Therefore, the Counsel for the Revenue has not been able to point out any reasons why the aforesaid two decisions should not be applied in the facts of the present case to reject the appeal. 13. It is only with regard to the decision of the Apex Court in Nagpur Hotel Owners' Association (supra) that Mr. Tejveer Singh expressed reservation. According to him, the observations of the Apex Court that Form 10 has to be filed before completion of Assessment Proceedings were rendered in the context of fact that it was not filed during the Assessment Proceedings. Therefore, the fact situation being different, the observations therein cannot be applied to the present facts. In fact, we note that the Apex Court in the above case has observed that for the purposes of excluding an income of the trust from the net of taxation, the intimation in Form 10 has to be filed with the Assessing Officer before he completes the Assessment. In fact, it is the context of the above finding of the Apex Court, that it observed that Form 10 has to be filed before completion of Assessment Proceedings. In fact, the Delhi High Court in the case of Association of Corporation & Apex Societies of Handlooms (supra) has also relied upon and so understood the decisions of the Apex Court in Nagpur Hotel Owners' Association (supra). Therefore, we do not find any merit in the reservations expressed by Mr. Singh, learned Counsel for the Revenue on the applicability of the Supreme Court order in case of Nagpur Hotel Owners' Association (supra) to the present facts. 14. In the above view, the question as proposed stands concluded against the Revenue by the decision of the Apex Court in Nagpur Hotel Owners' Association (supra) and the decision of this Court in Tulsidas Gopalji Charitable and Chaleshwar Temple Trust (supra) and the Delhi High Court in case of Association of Corporation and Apex Societies of Handlooms (supra), The Revenue has not been able to point out as to why the ratio of the three above decisions should not be made applicable to the facts of the present case and the appeal filed by the Revenue not be entertained.” I.T.A. No. 5526/Mum/2024 4 7. Respectfully following the decision of the Hon’ble Jurisdictional High Court (supra), we direct the AO to consider Form 10, verify the contents and decide the availability of exemption u/s 11(2) of the Act to the extent of Rs.11,00,000/-. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 4th February, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 04/02/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0015ितिलिप अ\u001aेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001c / The Appellant 2. \u0015\u001dथ\u001c / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "