TIRUPUR SOUTH ROTARY CHARITABLE TRUST,COIMBATORE V. ACIT, EXEMPTIONS, COIMBATORE

ITA 1553/CHNY/2025

AI Insights

The case involves Tirupur South Rotary Charitable Trust appealing against the order of the Commissioner of Income Tax (Appeals), which dismissed their appeal due to the late filing of Form 10B, essential for claiming exemption under Section 11 of the Income Tax Act. The Trust argued that the delay was due to the illness of their Chartered Accountant, supported by medical reports. The Tribunal found that the First Appellate Authority had erred by not adhering to the mandatory requirement of providing an opportunity of being heard as prescribed under section 251(2) of the Act before dismissing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717416 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2022-2023
• Appeal Filed On: 29-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P. KRISHNA KUMAR
• Assessee Lawyers: S. BHUPENDRAN
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice; Competent authority; Charitable institution
• Section: 11; 10B

Judgement Text

"आयकर अपीलीय अधिकरण, ‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI माननीय श्री मनु क ुमार धिरर ,न्याधयक सदस्य एवं माननीय श्री अमिताभ शुक्ला, लेखा सदस्य क े सिक्ष BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1553/Chny/2025 Assessment Years: 2022-23 Tirupur South Rotary Charitable Trust, South Rotary Hall, Opp Nataraja Theatre, Tirupur, Coimbatore, Tamil Nadu-641 604. [PAN: AAETT0308E] Assistant Commissioner of Income Tax (Exemptions), Coimbatore. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri S.Bhupendran, Advocate प्रत्यर्थी की ओर से /Revenue by : Shri P.Krishna Kumar, JCIT सुनवाई की तारीख/Date of Hearing : 12.08.2025 घोषणा की तारीख /Date of Pronouncement : 13.08.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / APL / S / 250 / 2024-25 / 1074154238(1) dated 07.03.2025 of the Learned Commissioner of Income Tax [herein after “CIT(A), Addl/JCIT(A)-5, Delhi, for the assessment year 2022-23. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. 2.0 At the outset, the Ld.Counsel for the assessee submitted that in its case the Ld.First Appellate Authority has committed an Act of Printed from counselvise.com ITA No.1553 /Chny/2025 Page - 2 - of 5 enhancement provided for in section 251(1)(a) of the Act without prescribing to the mandatory prescription under section 251(2) of giving an opportunity of being heard to the assessee. 3.0 Per contra, the Ld. DR relied upon the order of lower authorities. 4.0 We have heard the rival submissions in the light of material available on records. At this stage, we deem it appropriate to reproduce the exact content of the order of the Ld.First Appellate Authorityas available on page 8 of appellate order:- “….The appellant has claimed that provisional registration under Section 12AB was granted, but the discrepancy in the Unique Registration Number led to the denial of the exemption. The appellant states that Unique Registration Number (URN) was allotted as AAETT0308EE20213. However, the same was incorrectly mentioned as AAWTT0308EE20213, while fling the Return of Income for the said period. The Return of Income filed on 07/11/2022 was processed under Section 143(1) by Intimation dated 02/06/2023 by disallowing Rs. 19,00,000/- on the reason that the details mentioned in ITR regarding the URN did not match or tally with Form No 10AC obtained for this AY. The appellant has submitted copy of provisional registration under Section 12AB in support of its claim. Thus appellant holds valid registration. Upon review of the facts and submissions, however, it is evident that Form 10B was not filed within the prescribed timeframe, which is a mandatory requirement for claiming exemption under Section 11 of the Act. Consequently, the exemption claim cannot be entertained. The appellant has stated that Form 10B was not filed within the stipulated time due to the illness of its Chartered Accountant, who was handling the compliance requirements. Medical reports have been furnished to substantiate this claim. Given these circumstances, the appellant has requested that the delay be condoned and the appeal be heard on its merits. However, this issue is beyond the purview of this forum and should be addressed through a separate condonation Printed from counselvise.com ITA No.1553 /Chny/2025 Page - 3 - of 5 application/before the Ld Commissioner of Income Tax (CIT) in accordance with Circular 2/2020. Given the non-compliance with statutory requirements, the appeal is dismissed for statistical purposes. The appellant is advised to seek condonation of delay before the CIT for necessary relief, if applicable which shall pave way for reconsideration of exemption claim of appellant. The Assessing Officer may revisit the appellant's claim of exemption in accordance with disposal of condonation of delay petition by the Ld CIT….” 5.0 As per brief factual matrix of the case is that a disallowance of Rs. 19 lakhs u/s 143(1) was made by CPC vide its order dated 02.06.2023. The apparent reason was some mismatch of information construed by the CPC. The Ld.First Appellate Authority concurred with the arguments taken by the assessee regarding the inadvertent mismatch of the information and proceeded to accept the appeal in terms of grounds of appeal raised by the assessee which have been extracted on page 2 of the appellate order. The Ld.First Appellate Authority however noted that Form 10B was not filed by the assessee in time and therefore it was inadmissible for grant of exemption. Holding that she is not the competent authority to condone delay in filing of Form 10B in time, the Ld.First Appellate Authority proceeded to dismiss the appeal on this point of delayed filing of Form 10B. The Ld.First Appellate Authority however observed that the Ld.AO may revisit assessee’s claim upon conclusion of delay application by the PCIT. Printed from counselvise.com ITA No.1553 /Chny/2025 Page - 4 - of 5 6.0 We have noted that the only ground raised by the assessee before the Ld.First Appellate Authority was qua disallowance of Rs.19 lakhs by CPC, which was accepted by the Ld.CIT(A). It is in this context that the dismissal of appeal by the Ld.First Appellate Authority on account of delayed filing of Form 10B becomes questionable and in fact an action comprising enhancement falling u/s 251(1)(a). It is trite law that any adverse disturbance in the appeal by Ld.First Appellate Authority which has not been part of the original appeal , would constitute an act of enhancement u/s 251(1)(a). In that situation, the Ld.First Appellate Authority is mandated to confirm to prescription u/s 252 of giving an opportunity of being heard before drawing any adverse conclusions. The same has not been done in this case and therefore assessee’s rights of natural justice have been seriously and adversely impacted. 7.0 In the interest of justice, we therefore set aside the order of Ld.First Appellate Authority with the directions to readjudicate the matter afresh, in accordance with law, after giving an opportunity of being heard to the assessee. It would worthwhile for the Ld.First Appellate Authority to await the decision of PCIT qua condonation of delay application of the assessee. The Ld.Counsel for the appellant has invited our attention to judicial precedents including those of Hon’ble Madras High Court holding that the filing of Form 10B is merely directory and is not mandatory in Printed from counselvise.com ITA No.1553 /Chny/2025 Page - 5 - of 5 nature. It would worthwhile for the Ld.First Appellate Authority to also consider said decisions before arriving at any conclusions. 8.0 In the result, all the grounds of appeal raised by the assessee are allowed for statistical purposes. Order pronounced on 13th , Aug-2025 at Chennai. Sd/- (मनु क ुमार धिरर) (MANU KUMAR GIRI) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 13th , Aug-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF Printed from counselvise.com "