VIKALP EDUCATION SOCIETY,ROHTAK V. ITO EXEMPTION WARD, ROHTAK

ITA 2939/DEL/2024

AI Insights

The case involves Vikalp Education Society, an education society running a school, which appealed against the decision of the National Faceless Appeal Centre (NFAC) that denied them exemption under section 11 of the Income-tax Act due to a delayed filing of the audit report in Form 10B. The Tribunal considered precedents where it was established that such procedural lapses should not affect the substantive claims of exemption under section 11, especially if the necessary documents were provided before the assessment was concluded.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470198 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2022-2023
• Other Referred Cases: Shambhu Dayal Modern School Vs. ITO(E), ITO Vs. Takshshila Foundation (NGO), Saraswati Shishshu Mandir Vs. ADIT, CPC
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: U.S. AGGARWAL
• Keywords: Charitable institution
• Section: 143(3); 143(1); 11; 12AA; 139(1); 139(4); 10B

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 2939/Del/2024 (Assessment Year: 2022-23) Vikalp Education Society, 34/10, Jasbir Colony, Haryana Vs. DCIT, Bangalore (Appellant) (Respondent) PAN:AAATV7151K Assessee by : Shri U. S. Aggarwal, Adv Shri Bharat Bhushan, Adv Revenue by: Shri Om Parkash, Sr. DR Date of Hearing 12/03/2025 Date of pronouncement 19/03/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.2939/Del/2024 for AY 2022-23, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as „ld. NFAC‟, in short] in Appeal No. ITBA/APL/S/250/2024-25/1064627702(1) dated 03.05.2024 dated against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 21.03.2022 by the Assessing Officer, NeFC, Delhi (hereinafter referred to as „ld. AO‟). 2. Though the assessee has raised several grounds, we find that the only effective issue to be decided is as to whether the ld CIT(A) was justified in denying the exemption u/s 11 of the Act in the facts and circumstances of the instant case. ITA No. 2939/Del/2024 Vikalp Education Society Page | 2 3. We have heard the rival submissions and perused the materials available on record. The assessee is an education society registered u/s 12A of the Act. The assessee is running a school named as Vikalp Public High School. The return of income for AY 2022-23 was filed u/s 139(1) of the Act on 06.11.2022. The last date for filing of return of income u/s 139(1) of the Act was 07.11.2022. The due date of filing of audit report in Form 10B was 07.10.2022. The assessee uploaded the audit report in Form 10B of the Act on 28.10.2022 with a delay of 21 days beyond the prescribed time. It was pleaded by the assessee that assessee trust is not conversant with the amended provisions of the Act and that the delay in uploading of audit report was not intentional or with malafide motive. Since, there was time available for filing of return of income, the assessee was under the bona fide impression that uploading of Form 10B on 28.10.2022 was within the time. The return of the assessee was duly processed by the CPC u/s 143(1) of the Act, wherein, the exemption claimed by the assessee u/s 11 of the Act was sought to be denied to the assessee on the ground of belated filing of audit report in Filing 10B . The very same issue came up for adjudication before this Tribunal in the case of Shambhu Dayal Modern School Vs. ITO(E) in ITA No. 1236/Del/2024 decided for AY 2021-22 dated 02.08.2024 wherein, it was held that requirement of filing of audit report in Form 10B to be only procedural requirement of law and as long as the same was made available to the ld AO before the conclusion of assessment, substantive claim of exemption u/s 11 of the Act cannot be denied to the assessee. Relevant operative portion of the said Tribunal order is reproduced below:- “3. We have heard the rival submissions and perused the material available on record. The assessee is a society registered u/s 12AA of the Act vide registration dated 08.01.2001. The return for AY 2021-22 was filed by the assessee on 31.03.2022 u/s 139(4) of the Act declaring Nil ITA No. 2939/Del/2024 Vikalp Education Society Page | 3 income claiming exemption 11 of the Act. Infact the last date for filing return of income for AY 2021-22 u/s 139(4) of the Act was 31.03.2022 as per CBDT Circular No. 17/2021 dated 09.09.2021. Pursuant to the amendments brought in statute, all charitable trusts were supposed to apply for fresh registration u/s 12AB of the Act despite the fact that they were already holding registration u/s 12AA of the Act. Due date for preferring the application for seeking fresh registration u/s 12AB of the Act was extended by CBDT from time to time giving leeway to the assessee that the assessee trusts should not be put to any undue hardship. In the instant case, provisional registration u/s 12AB of the Act was indeed granted to the assessee by the ld Pr. CIT vide order in Form 10AC dated 05.04.2022 for AYs 2022-23 to 2026-27. The return of income was processed by the CPC, Bengaluru u/s 143(1) of the Act stating that the details of fresh registration u/s 12AB of the Act obtained by the assessee were not filled by the assessee in the relevant column of the ITR and consequentially exemption u/s 11 of the Act was to be denied. It is pertinent to note that return of income was filed belatedly on 31.03.2022. The registration u/s 12AB of the Act was obtained by the assessee only on 05.04.2022. Hence, it would be impossible for the assessee to mention the details of registration obtained u/s 12AB of the Act in the relevant column of the ITR filed on 31.03.2022. However, the assessee had furnished the entire details of registration obtained u/s 12AB of the Act on 05.04.2022 before the ld CIT(A). The ld CIT(A) even record this fact in his order as part of the reproduction of written submission of the assessee vide page 5 in para 2.1. Despite the same, the ld CIT(A) ignores the fact of assessee having obtained the provisional registration u/s 12AB of the Act and proceeds to uphold the denial of exemption u/s 11 of the Act on the ground that the assessee had not furnished the details of fresh registration obtained. This action of the ld CIT(A) is highly condemnable as it is directly contrary to the facts on record. It is a fact that assessee had furnished the audit report in form No. 10B along with return of income on 31.03.2022. It is fact that this filing of audit report in form 10B of the Act was filed beyond the prescribed due date i.e. 15.03.2022. In this regard, it is pertinent to note that AY 2021-22 being the first year of requirement of law to file the audit report in Form 10B 1 month prior to the due date of filing the return of income. Hence, apparently the assessee had not complied with this amended requirement of law, being the first year of such requirement. Now the moot question that arises for our consideration is as to whether non uploading of Form 10B within the date prescribed under the Act would become fatal to the claim of exemption u/s 11 of the Act ? This aspect has been duly considered by the coordinate bench decision of Ahmedabad Tribunal in the case of ITO Vs. Takshshila Foundation (NGO) in ITA NO. 118/Ahd/2024 and CO No. 08/Ahd/2024 dated 02.07.2024 wherein, it was held that the requirement of filing of audit report in Form 10B was only procedural requirement of law and as long as the same was made available to the ld AO before the completion ITA No. 2939/Del/2024 Vikalp Education Society Page | 4 of assessment either u/s 143(1)/ 143(3)/ 144/ 147 of the Act, the substantive claim of exemption u/s 11 of the Act cannot be denied to the assessee. Similar was the view taken by the coordinate bench of Dehradun Tribunal in the case of Saraswati Shishshu Mandir Vs. ADIT, CPC in ITA No. 01/DDN/2023 dated 29.02.2024.” 4. In view of the above, we direct the ld AO to condone the delay in filing of Form 10B of the Act and consider the claim of exemption u/s 11 of the Act in accordance with the law. With these directions, the grounds raised by the assessee are allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19/03/2025. -Sd/- -Sd/- (ANUBHAV SHARMA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19/03/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "