SHRI MOTILAL NAGAR SMRITI SHIKSHAN SAMITI,INDORE V. CIT EXEMPTION, BHOPAL

ITA 384/IND/2025

AI Insights

The case involves Shri Motilal Nagar Smriti Shikshan Samiti, a trust engaged in charitable activities, which appealed against the revision-order of the CIT(Exemption) Bhopal. The CIT(Exemption) had revised the assessment-order on the grounds that the AO had erred in allowing the benefit of accumulation of income without proper compliance with the procedural requirements under sections 11(1) and 11(2) of the Income-tax Act. The Tribunal examined the submissions and evidence presented, including the timely rectification of the form filed by the assessee, and concluded that the AO had correctly allowed the benefit of accumulation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822970 (ITAT-INDORE)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Appeal Filed On: 22-04-2025
• Other Referred Cases: Indian Panel Board Manufacturer Vs. DCIT Tax Appeal No. 655 of 2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEECARRIEDUSTOIMPUGNEDORDEROFREVISIONAND; FORREVENUESUBMITTEDTHATTHEAOHASNOT; FORREVENUEABOUTTHISJUDICIALAPPROACH; FORTHEASSESSEE; SHRIANUPSINGH
• Assessee Lawyers: SHRIHARSHVIJAYWARGIYA
• Keywords: Condonation of delay; Charitable institution; Revision of order
• Section: 143(3); 142(1); 263; 10B

Judgement Text

"Page 1 of 6 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.384/Ind/2025 Assessment Year:2020-21 Shri Motilal Nagar Smriti Shikshan Samiti, 4th Floor, Muley Tower, 164, M.G. Road, Indore बनाम/ Vs. CIT(Exemption) Bhopal (Assessee/Appellant) (Revenue/Respondent) PAN: AACAS2261A Assessee by Shri Harsh Vijaywargiya, AR Revenue by Shri Anup Singh, CIT-DR Date of Hearing 15.12.2025 Date of Pronouncement 22.12.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by revision-order dated 25.03.2025 passed by learned CIT (Exemption), Bhopal [“CIT(E)”] u/s 263 of Income-tax Act, 1961 [“the Act”] which in turn arises out of assessment-order dated 09.09.2022 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 143(3) r.w.s. 144B of the act for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal on the grounds raised in Appeal-Memo (Form No. 36). Printed from counselvise.com Shri Motilal Nagar Smriti Shikshan Samiti ITA No. 384/Ind/2025 – AY 2020-21 Page 2 of 6 2. The background facts leading to present appeal are such that the assessee, a trust engaged in charitable purpose and entitled to exemption u/s 11/12 of the Act, filed return of income of relevant AY 2020-21 u/s 139(4A) which was subjected to scrutiny-assessment and the AO completed assessment u/s 143(3) vide assessment-order dated 09.09.2022. Subsequently, Ld. CIT(E) examined the record of assessment-proceeding and viewed that the assessment-order passed by AO was erroneous in so far it is prejudicial to the interest of revenue which attracted revisionary-jurisdiction u/s 263. Accordingly, the CIT(E) issued show-cause notice dated 03.12.2024 and finally passed revision-order dated 25.03.2025 u/s 263. Aggrieved by such revision-order, the assessee has come in present appeal before us. 3. Ld. AR for assessee carried us to impugned order of revision and demonstrated that there is one single issue for which the Ld. CIT(E) undertook revision. The CIT(E) has noted that the assessee accumulated income of Rs. 1,59,80,555/- but filed Form No. 9A [prescribed under Clause 2 of Explanation-1 to section 11(1) for securing accumulation for spending in next year] instead of Form No. 10 [prescribed under section 11(2) for securing accumulation for a longer period of 5 years]. He further observed that the assessee did not file Form No. 10B (Audit Report) of next AY 2021- 22 to show as to whether the accumulated income was spent or not in next year. He further observed that although the assessee filed Form No. 10 to AO on 15.04.2022 during assessment-proceeding, after a delay of 365 days, but the assessee did not file any approval granting condonation of delay by Printed from counselvise.com Shri Motilal Nagar Smriti Shikshan Samiti ITA No. 384/Ind/2025 – AY 2020-21 Page 3 of 6 CBDT u/s 119 and yet the AO has allowed benefit of accumulation to assessee and not made disallowance/addition of Rs. 1,59,80,555/- which was required to be made. Therefore, the assessment-order passed by AO is erroneous-cum-prejudicial to the interest of assessee and the CIT(E) has invoked revisionary jurisdiction. 4. Having explained thus, Ld. AR carried us to Page 70 of Paper-Book where the AO raised a specific query No. 16 in the notice dated 02.11.2021 issued to assessee u/s 142(1) qua the impugned accumulation of Rs. 1,59,80,555/- claimed by assessee. Then, Ld. AR carried us to Pages 71 to 78 of Paper-Book where a copy of reply-letter filed by assessee to AO on 05.05.2022 is placed. In Para No. 16 of this reply-letter, the assessee furnished the evidence of filing Form No. 10 on 15.04.2022 to AO. Further, the assessee also made a submission that the Form No. 9A was filed mistakenly and that to correct that error, the assessee had already filed Form No. 10. The assessee further submitted certain judicial rulings to AO wherein it was held that the delayed filing of form was a procedural ir- regularity and for that reason alone, the substantive benefit of accumulation sought by assessee cannot be denied. Ld. AR submitted that the AO considered this cogent submission of assessee and thereafter, while passing assessment-order, allowed benefit of accumulation and did not make any disallowance/addition as questioned by Ld. CIT(E). Therefore, there is no error in the order of AO and no prejudice has been caused to revenue. Hence, the revision-order passed by Ld. CIT(E) is not warranted and must be Printed from counselvise.com Shri Motilal Nagar Smriti Shikshan Samiti ITA No. 384/Ind/2025 – AY 2020-21 Page 4 of 6 quashed. 5. Per contra, Ld. DR for revenue submitted that the AO has not conducted a proper enquiry on the issue. He submitted that the AO has simply kept the reply submitted by assessee in file and not dealt the same with application of mind which is evident from the fact that the AO has passed a very summarised/cryptic order. Ld. DR also filed a gist of case-laws compilation holding that where the AO has passed cryptic order without making adequate enquiry, the order passed by AO attracts revisionary jurisdiction u/s 263. 6. We have considered rival contentions of both sides and perused the impugned order as well as the material held on record to which our attention has been drawn. On a careful consideration of various documents placed in Paper-Book, as noted in the foregoing discussion, we find that during the course of assessment-proceeding, there was a specific query raised by AO with regard to the issue contemplated by Ld. CIT(E) and the assessee filed a detailed reply to AO. To this extent, there is no dispute or rebuttal by revenue. Coming to substantive issue raised by Ld. CIT(E) that there was a delay in filing Form No. 10 by assessee, we find that the assessee has initially filed Form No. 9A mistakenly and during scrutiny-proceedings before completion of assessment itself, the assessee has rectified mistake and filed Form No. 10 correctly required as per law. Thus, the mistake stands rectified before passing of assessment-order by AO. Even otherwise, there are numerous holdings in the context of forms required to be filed under various Printed from counselvise.com Shri Motilal Nagar Smriti Shikshan Samiti ITA No. 384/Ind/2025 – AY 2020-21 Page 5 of 6 provisions of the Act wherein the Hon’ble Courts have taken a view that if the Form is available to AO before completion of assessment, the AO cannot deny substantive benefit available to assessee in terms of provisions of Act. During hearing, we apprised Ld. DR for revenue about this judicial approach vehemently taken and the Ld. DR could not controvert the same. In so far as the issue of grant of condonation by CBDT in terms of section 119 for delayed filing of Form No. 10 is concerned, we may gainfully refer the Para 5.6 of the judgement of Hon’ble Gujrat High Court in Indian Panel Board Manufacturer Vs. DCIT Tax Appeal No. 655 of 2022 dated 21.03.2023 reading thus: “5.6 The tribunal further committed an error in appreciating the import of Section 119 2(b) of the Act inasmuch as the application contemplated thereunder is only additional remedy for the assessee which could not be said to be compulsorily resorted to, by the assessee. The circular No. 7/18 dated 20.12.2018 issued u/s 119 of the Act could not be, therefore, said to have taken away the appellate remedy.” 7. In view of above discussion and for the reasons stated therein, we are persuaded to hold that in present case, the AO’s order granting benefit of accumulation to assessee on the basis of Form No. 10 filed during assessment-proceedings was a valid order and the same cannot be considered as erroneous or prejudicial to the interest of revenue. Therefore, the invocation of revisionary power u/s 263 by Ld. CIT(E) is not warranted. We, therefore, quash the impugned revision-order and restore the original assessment-order passed by AO. The assessee succeeds in this appeal. Printed from counselvise.com Shri Motilal Nagar Smriti Shikshan Samiti ITA No. 384/Ind/2025 – AY 2020-21 Page 6 of 6 8. Resultantly, this appeal is allowed. Order pronounced by putting up on notice board as per Rule 34 of ITAT Rules, 1963 on 22/12/2025 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 22/12/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "