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2020 (3) TMI 1353 - AT - Income TaxExemption u/s 11(2) denied - assessee has filed Form no.10 manually - Central Processing Centre (CPC) denied assessee s claim of exemption u/s 11(2) since the declaration in Form no.10, was not filed electronically along with the return of income - HELD THAT - Assessee has filed Form no.10, manually before the AO on 28thSeptmber 2015, the very same date the return of income for the assessment year 2015 16, was filed by the assessee. On a perusal of rule 17, as it existed prior to its amendment/substitution by Income Tax (1st Amendment) Rule, 2016, w.e.f. 1st April 2016, the provision only required filing of Form no.10, before the expiry of the time allowed under sub section (1) of section 139 of the Act for furnishing return of income. Only w.e.f. 1st April 2016, amended rule 17 provided for filing Form no.10 electronically before the due date of return of income u/s 139(1) of the Act. That being the case, assessee s claim of exemption under section 11(2) of the Act cannot be rejected only for the reason that Form no.10, was not filed electronically. We restore the issue to the Assessing Officer with a direction to verify Form no.10, filed by the assessee manually, as stated by the learned Counsel for the assessee and allow assessee s claim of exemption under section 11(2) of the Act. Grounds are allowed for statistical purpose.
Issues:
1. Appeal challenging denial of exemption under section 11(2) of the Income Tax Act, 1961. Analysis: The appeal filed by the assessee contested the order passed by the Commissioner of Income Tax (Appeals) regarding the denial of the assessee's claim of exemption under section 11(2) of the Income Tax Act, 1961 for the assessment year 2015-16. The dispute centered around the requirement of filing Form no.10 electronically along with the return of income. The assessee, a charitable trust with registration under section 12AA of the Act, had declared nil income after claiming the exemption under section 11(2) amounting to ?22,27,410. The Central Processing Centre (CPC) denied the exemption claim as Form no.10 was not filed electronically along with the return. The assessee contended that as per the provisions applicable for the assessment year 2015-16, there was no requirement to file Form no.10 electronically. The application for rectification under section 154 was rejected by the CPC, leading to an appeal before the first appellate authority. The assessee argued that the requirement of filing Form no.10 electronically became mandatory only from 1st April 2016 due to an amendment to rule 17 by a CBDT notification. Prior to this amendment, there was no such requirement. The contention was that since Form no.10 was manually filed before the Assessing Officer on the due date of the return of income, the claim of exemption under section 11(2) should be allowed. Despite this argument, the Commissioner (Appeals) dismissed the appeal, leading to the present appeal before the Appellate Tribunal. Upon considering the submissions, the Tribunal noted that the rejection of the exemption claim was solely due to the non-filing of Form no.10 in electronic mode. However, it was observed that the assessee had indeed filed Form no.10 manually before the Assessing Officer on the same date the return of income was filed. The Tribunal highlighted that the requirement for filing Form no.10 electronically was introduced only from 1st April 2016, whereas for the relevant assessment year, the provision mandated filing before the expiry of the time allowed for furnishing the return of income. Therefore, the Tribunal concluded that the claim of exemption under section 11(2) cannot be rejected solely for not filing Form no.10 electronically. Consequently, the issue was remanded to the Assessing Officer to verify the manually filed Form no.10 and allow the assessee's claim of exemption under section 11(2). The appeal was allowed for statistical purposes.
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