PRATHIBHA EDUCATIONAL WELFARE SOCIETY,CHITTOR V. ITO., EXEMPTION WARD, TIRUPATI

ITA 2/HYD/2025

AI Insights

The case involves Prathibha Educational Welfare Society, which appealed against the order of the CIT(A) confirming the denial of exemption under section 11 of the Income Tax Act by the Assessing Officer. The exemption was denied because the society filed its return of income and audit report after the due date, which was extended to February 15, 2021, due to the COVID-19 pandemic. The Tribunal considered the impact of the pandemic on the society's ability to meet the deadline and noted that the necessary documents were submitted before the assessment order was issued. The Tribunal's decision emphasized the need to consider the extraordinary circumstances of the pandemic when evaluating compliance with procedural deadlines.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474845 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SM-B
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH BABU KN
• Assessee Lawyers: S.RAMA RAO
• Keywords: Condonation of delay; Benefit of exemption

Judgement Text

" 1 ITA.No.2/Hyd./2025 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “SM-B” BENCH : HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.2/Hyd/2025 Assessment Year 2020-2021 Prathibha Educational Welfare Society, Chitoor. PIN – 517 001 PAN AABTP7549N vs. The Income Tax Officer, Exemption Ward, Tirupati (Appellant) (Respondent) For Assessee : Shri S. Rama Rao, Advocate For Revenue : Shri Suresh Babu KN, Sr. AR Date of Hearing : 13.03.2025 Date of Pronouncement : 18.03.2025 ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the Assessee against the Order dated 18.09.2024 of the learned Addl./JCIT(A), Bhubaneswar, relating to the assessment year 2020-2021. 2. At the very outset, there is a delay of 32 days in filing the appeal before the Tribunal. The assessee filed an affidavit seeking for condonation of delay on medical grounds. We are satisfied with the reasons set-out by the 2 ITA.No.2/Hyd./2025 assessee in it’s affidavit and, therefore, condone the delay of 32 days in filing the appeal before the Tribunal. We, accordingly, admit the appeal for adjudication. 3. Brief facts of the case are that, the assessee Prathibha Educational Welfare Society is an institution engaged in activities of Education and imparting primary skills. The assessee has filed it's return of income for the assessment year 2020-21 on 03.03.2021 declaring taxable income at Rs.NIL after claiming exemption u/secs.11 and 12 of the Income Tax Act, 1961 [in short “the Act”]. The assessee had filed it’s audit report in Form-10B on 03.03.2021. The return of the income filed by the assessee has been processed u/sec.143(1) of the Act on 12.05.2022 and the Assessing Officer determined the total income of the assessee at Rs.39,64,385/- and tax payable at Rs.8,76,380/- by denying exemption u/sec.11 of the Act for not filing the return of income and audit report on or before the due date for filing the return of income on 15.02.2021. 3 ITA.No.2/Hyd./2025 4. Being aggrieved by the assessment order, the assessee preferred appeal before the CIT(A). Before the CIT(A) the assessee submitted that due to on-going Covid 2019 pandemic outbreak, the assessee could not file return of income on or before the extended “due date” i.e., on 15.02.2021. However, the assessee has satisfied all the conditions, except filing the return of income on or before the due date and, therefore, the Assessing Officer ought to have allow the benefit of exemption u/sec.11 of the Act. The CIT(A) after hearing the submissions of the assessee and also taking note of provisions of TOLA observed that, although, the CBDT has extended the due date for filing the return of income up-to 15.02.2021, but the assessee has filed the return of income along with audit report beyond the due date prescribed under the Act and, therefore, the Assessing Officer has rightly denied the benefit of exemption u/sec.11 of the Act. 5. Now the assessee is in appeal before the Tribunal challenging the order of the learned CIT(A) in confirming the order of the Assessing Officer. 4 ITA.No.2/Hyd./2025 6. Learner Counsel for the Assessee referring to the dates submitted that due to on-going Covid-2019 pandemic outbreak, the assessee could not file it’s return of income along with audit report in Form No.10B on or before the extended due date i.e., on 15.02.2021. However, the return of income has been filed by the assessee on 03.03.2021 with a delay of 18 days. Although, the assessee has explained the reasons for delay in filing the return of income and audit report in the prescribed Form No.10B, the Assessing Officer and the learned CIT(A) has rejected the exemption u/sec.11 of the Act. Therefore, he submitted that exemption claimed by the assessee should be allowed. 7. The Learned DR, on the other hand, supporting the order of the learned CIT(A) submitted that the cut-off date fixed by the CBDT as per law has to be strictly followed by assessee to claim benefit of exemption u/sec.11 of the Act. Since the assessee has not filed the return of income and audit report in prescribed Form No.10B, on or before the due date, the Assessing Officer and the learned CIT(A) 5 ITA.No.2/Hyd./2025 has rightly denied benefit of exemption u/sec.11 of the Act and thus, the order of the learned CIT(A) should be upheld. 8. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the “due date” for filing the return of income was by 15.02.2021 and that the return of income filed by the assessee belatedly along with Form No.10B audit report was on 03.03.2021. Admittedly there is a delay of 18 days in filing the return of income and audit report. However, the fact remains that, audit report in Form-10B has been filed before the Assessing Officer passed the assessment order i.e., on 12.05.2022. The assessee has explained reasons for not filing the return of income and audit report on or before the extended due date i.e., on 15.02.2021. We find that the period is under peak Covid-2019 pandemic outbreak and during the Covid pandemic period, the normal life of all the citizens was effected very badly be that an individual or trust. Therefore, going by the Covid pandemic situation, in our considered view, the small delay of 18 days in filing the 6 ITA.No.2/Hyd./2025 return of income and audit report in prescribed Form No.10B should have been condoned by the authorities below when the relevant audit report in Form-10B was made available to the Assessing Officer before the Assessing Officer passed his assessment order dated 12.05.2022. Therefore, in our considered view, the Assessing Officer and the learned CIT(A) was erred in rejecting exemption u/sec. 11 of the Act. Thus, we set-aside the order of the learned CIT(A) and direct to the Assessing Officer to allow the benefit of exemption u/sec.11 of the Act as claimed by the assessee-trust. 9. In the result appeal of the assessee is allowed. Order pronounced in the open Court on 18.03.2025. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 18th March, 2025 VBP 7 ITA.No.2/Hyd./2025 Copy to 1. Prathibha Educational Welfare Society, 20-150/2, Naidu Building, CHITOOR - 517 001, Andhra Pradehsh. 2. The Income Tax Officer, Exemption Ward, Tirupati 3. The Pr. CIT(A), Tirupathi. 4. The DR ITAT “SM-B” Bench, Hyderabad 5. Guard File //By Order// //True Copy// Sr. Private Secretary : ITAT : Hyderabad Benches, Hyderabad. "