ST FRANCIS XAVIERS FORANE CHURCH,KANNAMALI V. INCOME TAX OFFICER(EXEMPTIONS), ERNAKULAM

ITA 438/COCH/2025

AI Insights

The case involves St. Francis Xaviers Forane Church, a charitable religious institution, appealing against the order of the CIT(A) which confirmed the disallowance of accumulated income of Rs. 33,61,981 under section 11 of the Income Tax Act, 1961. The disallowance was initially made by the CPC due to the late filing of Form No. 10, which is required to declare accumulated income. The tribunal considered various precedents and arguments presented by both parties, ultimately deciding that the deadline for filing Form 10 is directory and not mandatory, thus allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713021 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: M/s. Kalyan Educational Society vs. ACIT, M/s. Shree Swami Samarth Seva Kendra vs. ITO, CIT vs. Nagpur Hotel Owners Association, ITO vs. Industrial Roadway
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LA
• Assessee Lawyers: ANIL KUMAR P J
• Section: 12AA; 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 438/Coch/2025 Assessment Year: 2014-15 St. Francis Xaviers Forance Church, .......... Appellant Kandakadavu, Andikkadavu (PO), Kannamali, Kochi. [PAN: AADTS 3622 B] vs. ITO (Exemptions), Ernakulam, Kochi .......... Respondent Appellant by: Shri Anil Kumar P J, Advocate Respondent by: Smt. Leena La, Sr. DR Date of Hearing: 21.07.2025 Date of Pronouncement: 31.07.2025 O R D E R This appeal filed by the assessee is directed against the order of the ADDL/JCIT(A)-2, Noida [CIT(A)] dated 31.03.2025 for Assessment Year (AY) 2014-15. 2. Brief facts of the case are that the assessee is a charitable religious institution, duly registered u/s. 12AA of the Income Tax Act, 1961 (for short, ‘the Act’). The return of income for the A.Y. 2014-15 was filed on 18/03/2016 declaring income of Printed from counselvise.com 2 ITA No. 438/Coch/2025 St. Francis Xaviers Forane Church Rs.50,46,417/-. The said return of income was processed by CPC u/s. 143(1) of the Act vide intimation dated 24/10/2016 by disallowing accumulated income of Rs. 33,61,981/- u/s. 11 of the Act. 3. Being aggrieved by the said intimation, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO by holding that Form No. 10 for accumulation, only filed on 18/03/2016 and was not filed within the time limit prescribed in section 139(1) of the Act. 4. Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal. 5. It is submitted that filing of Form 10 within the due date prescribed u/s. 139(1) of the Act is only directory and not mandatory. Therefore, accumulated income u/s. 11(2) of the Act cannot be disallowed. In support of his contention, the following reliance have been placed: (i) M/s. Kalyan Educational Society vs. ACIT [2023 (8) TMI 1336 – ITAT, Kolkata] (ii) M/s. Shree Swami Samarth Seva Kendra vs. ITO [2023 (11) TMI 397 – ITAT, Mumbai] (iii) CIT vs. Nagpur Hotel Owners Association [2000 (12) TMI 99 – SC] Printed from counselvise.com 3 ITA No. 438/Coch/2025 St. Francis Xaviers Forane Church (iv) ITO vs. Industrial Roadway [2007 (3) TMI 292 – ITAT, Bombay-K] 6. I consider the rival submissions and perused the material on record. 7. The CPC while processing return of income had denied the claim of the assessee for accumulation of income u/s. 11(2) of the Act on the ground that prescribed form i.e. Form 10 was not filed within the due date prescribed in section 139(1) of the Act. Undisputedly, the audit report along with return of income is filed belatedly. It is a settled position of law that time limit for filing of Form 10 & 10B are directory in nature and, therefore I direct the CPC to amend the intimation by allowing the accumulation income. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 31st July, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 31st July, 2025 vr/- Printed from counselvise.com 4 ITA No. 438/Coch/2025 St. Francis Xaviers Forane Church Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "