SHREE SWAMINARAYAN CHARITABLE TRUST,AHMEDABAD V. THE ITO, WARD-2 (EXEMPTION), AHMEDABAD

ITA 1106/AHD/2024

AI Insights

The case involves the Shree Swaminarayan Charitable Trust appealing against the order of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), which denied them benefits under section 11 of the Income Tax Act for the assessment year 2016-17. The primary issue was the delayed submission of Form no. 10B, which the Trust argued was a technical default. The Tribunal considered a similar case, Association of Indian Panelboard Manufacturer Vs. DCIT, where the High Court had reversed the ITAT's decision, emphasizing that procedural requirements like the timing of filing an audit report should not affect substantive rights under the Act. The Tribunal found that the Trust had complied with the substantive requirements of the law by ensuring the audit report was available to the Assessing Officer before the assessment proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33522 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 24-05-2024
• Other Referred Cases: Association of Indian Panelboard Manufacturer Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: PARIN SHAH
• Keywords: Set aside; Charitable institution
• Section: 250; 11; 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] BEFORE DR. BRR KUMAR ACCOUNTANT MEMBER ITA No.1106/Ahd/2024 Asstt.Year : 2016-17 Shree Swaminarayan Charitable Trust 20, Pushpak Bungalows Nr.Dipak School New Nikol, Ahmedabad. PAN : AAFS 8164 H Vs ITO, Ward-2 (Exemption) Ahmedabad. (Applicant) (Responent) Assessee by : Shri Parin Shah, CA Revenue by : Shri Ravindra, SR.DR सुनवाई क\t तारीख/Date of Hearing : 09/10/2024 घोषणा क\t तारीख /Date of Pronouncement: 09/10/2024 आदेश आदेश आदेश आदेश/O R D E R This is assessee’s appeal against the order of the ld.Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi dated 26.05.2024 for the Asst.Year 2016-17 passed under section 250 of the Income Tax Act, 1961 (“the Act” for short). 2. In the appeal, the assessee has raised grounds the following grounds: 1. The order passed by lower authorities is bad in law and required to be quashed. 2. Ld. NFAC erred in law and on facts in deciding appeal ignoring various submissions. 3. Ld. NFAC erred in law R< and on facts in rejecting benefit u/s 11 of the Act of Rs 824380/-ignoring fact that Form 10B filed subsequently and accordingly, same is considered as technical default which does not take away fundamental rights. 4. Ld. NFAC ought to have granted benefit u/s 11 of the Act considering various submissions made by appellant. ITA No.1106/Ahd/2024 2 5. Ld. NFAC erred in law and on facts in rejecting alternate claim u/s 10(23C)(iiiad) of the Act ignoring fact that appellant trust complies with the conditions laid down in that section. Without prejudice to the above and in alternative, Ld. NFAC ought to have give direction to compute income on commercial principle and real income theory. Charging of Interest u/s 234A,234B,234C are unjustified.” 3. The issue before me pertains to delayed submission of Form no.10B which ld.counsel for the stated to be a technical default. He further submitted that ld.Bench of the ITAT, Ahmedabad rejected similar claim in the case of Association of Indian Panelboard Manufacturer Vs. DCIT, ITA No.24 of 2022. However, the said decision of the ITAT was reversed by the Hon’ble Jurisdictional High Court by judgment dated 21.3.2023 reported in (2023) 157 taxmann.com 550 (Guj) holding that w.e.f. Astt.Year 2016-17 filing of form though mandatory in nature but procedural in nature, owing amendment made in Finance Act, 2015. In the present case, however, the ld.counsel for the assessee submitted that the same has been filed subsequently, and therefore, the above decision of the Hon’ble jurisdictional High Court is squarely applicable. The relevant portion of the judgment of the Hon’ble High Court at para 6.1 is held as under: 6. The moot aspect thus centres around to the requirement of the availability of the audit report when the assessment was undertaken by the Assessing Officer even though the same may not have been filed alongwith ( the return of income. Filing of audit report is held to be substantive requirement but not the mode and stage of filing, which is procedural. Once the audit report in Form 12B is filed to be available with the Assessing Officer, before assessment proceedings take place, the requirement of law is satisfied. In that view, the Income Tax Tribunal was not justified in dismissing the appeal of the assessee. 6.1 The appellant assessee has to be held to be eligible and entitled to exemptions under section 11(1) and 11 (2) of the Act and the alleged ground of non-filing of audit report alongwith return of income which was at the best procedural omission, could never to an impediment in law in claiming the exemption. 4. On the other hand, the ld.DR relied on the order of the ld.CIT(A). 5. Heard both the parties. ITA No.1106/Ahd/2024 3 6. I have gone through the record and the orders of the Revenue authorities. Keeping in view the decision of the Hon’ble jurisdictional High Court in the case of Association of Indian Panel Board Manufacturers (supra), and the assessee having satisfied the requirement of the law, I set aside the impugned orders of the Revenue authorities, and allow the grounds of appeal. Dictated on the Open Court, typed and pronounced on 9th October, 2024. Copy of this order be given to the assessee. The Registry is directed to dispatch as per procedure. Sd/- (DR. BRR KUMAR) ACCOUNTANT MEMBER Ahmedabad, dated 09/10/2024 "