ROUBLE NAGI ART FOUNDATION ,MUMBAI V. ITO (EXEM). WARD 2(2), MUMBAI

ITA 1271/MUM/2025

AI Insights

The case involves Rouble Nagi Art Foundation, a charitable trust, appealing against the decision of the Commissioner of Income Tax (Exemption) which confirmed the action of the Centralized Processing Centre (CPC) in denying exemption under section 11 of the Income Tax Act. The CPC had denied the exemption on the grounds that Form 10B was not filed within the due date, and taxed the entire income of Rs. 17,82,350 without allowing the deduction of Rs. 19,00,295. The Tribunal considered various precedents where exemptions were granted despite similar procedural lapses and decided in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312377 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Mumbai Metropolitan Regional Iron & Steel Market Commodity (378 ITR 103), Laxmanarayayan Dev ShrishanSeveaKhendra (167 taxmann.com 548), Association of Indian Panel Board Manufactured (157 taxmann.com 550), Sarvodaya Charitably Trust (125 taxmann.com 75), Shree BhairavSevaSamiti (149 taxmann.com 478), RamasahanimalSahuwala& Sons Charitable Trust (163 taxmann.com 175)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 11; 12AA; 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, HON’BLE JUDICIAL MEMBER ITA No. 1271/MUM/2025(AY: 2017-18) (Physical hearing) Rouble Nagi Art Foundation 603A Foreshore Apartment Juhu Beach, Juhu Road Mumbai - 400049 PAN. AABTR9167Q v. ITO (EXEMPTION)-WARD-2(2) Mumbai (Appellant ) (Respondent) Assessee Represented by : Shri JayeshDadia CA Department Represented by : Shri Vijay Kr. G. Subramanyam, Sr.DR Date of Conclusion of hearing : 22.04.2025 Date of Pronouncement of Order : 30.04.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. The appeal by the assessee is directed against order of CIT(A) / ADDL / JCIT(A)–6, Delhidated 29.01.2025 for the A.Y. 2017-18. The assessee has raised the following grounds of appeal: - “1. The Ld. Commissioner of Income Tax (Exemption) has erred in law and on the facts of the case in confirming action of the CPC of denying exemption u/s 11 of the act on the ground that Form No.10B was not filed within the due date.The action in unjustified and unwarranted. 2. The Ld. Commissioner of Income Tax (Exemption) has erred in law and on the facts of the case in confirming action of the CPC of taxing entire income of Rs.17,82,350/- and not allowing deduction of Rs.19,00,295/-. The action in unjustified and unwarranted. 3. Your Petitioners craves leave to add, amend, alter and / or withdraw the aforesaid ground of appeal.” 2. Rival submissions of both the parties have been heard and record perused. The Learned Authorised Representative (Ld.AR) of the assessee submitted that assessee is a Charitable Trust and registered under Charitable Commissioner and also having valid Registration under section 12AA of the 2 ITA No. 1271/MUM/2025 (AY: 2017-18) Rouble Nagi Art Foundation Income Tax Act, 1961 (in short “Act”). The object and activities of the assessee is not in dispute. Assessee filed its return of income for the A.Y. 2017-18 on 28.07.2017. The assessee also filed report in Form 10B within extended period on 07.11.2017. The report in Form 10B was also obtained before due date, however, the same couldnot be approved by Trustees due to non-availability. It was approved only on 28.03.2018. The Centralized Processing Centre, Bangalore (in short “CPC”) while processing the return of income not allowed the benefit of section 11 of the Act about application of income. The Ld.CIT(A) confirmed the action of the CPC by taking view that return was filed on 28.07.2017, audit report was obtained on 30.10.2017, it was approved by Trustee on 28.3.2018 resulting insignificant delay. The Ld.AR of the assessee submitted that in a number of decisions the various benches of Tribunal and Higher Courts have held that when the assessee Trust has complied with the procedural requirement of obtaining and filing report in Form 10B, exemption under section 11 of the Act could not be denied to it merely on technical ground for not filing of Form 10B along with return of income. Further in a series of decisions the various trusts have been allowed benefit of section 11, when Form 10B is filed during the assessment proceedings. To support his submission, Ld.AR of the assessee relied upon the following decisions: -  Mumbai Metropolitan Regional Iron & Steel Market Commodity (378 ITR 103)  Laxmanarayayan Dev ShrishanSeveaKhendra (167 taxmann.com 548)  Association of Indian Panel Board Manufactured (157 taxmann.com 550)  Sarvodaya Charitably Trust (125 taxmann.com 75)  Shree BhairavSevaSamiti (149 taxmann.com 478) 3 ITA No. 1271/MUM/2025 (AY: 2017-18) Rouble Nagi Art Foundation  RamasahanimalSahuwala& Sons Charitable Trust (163 taxmann.com 175) 3. On the other hand, the Learned Senior Departmental Representative (Sr.DR) for the revenue supported the orders of lower authorities. Sr.DR submitted that admittedly there was delay in filing report in Form 10B. 4. I have considered the submissions of both the parties and gone through the orders of lower authorities carefully. I found there is no dispute on facts. Only bone of contention of parties is that report in Form 10B was approved on 28.03.2017. I found that in a series of decisions it has been held that even if Form 10B is filed during assessment, the assessee is entitled for the benefit of application of income under section 11 of the Act. Thus, the appeal of the assessee is allowed. 5. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 30th April, 2025. Sd/-/- GIRISH AGRAWAL ACCOUNTANT MEMBER Sd/-/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, DATED: 30.04.2025 Giridhar, Sr.PS Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "