2022 (8) TMI 1299 - AT - Income Tax

Deduction u/s. 10(23C)(iiiad) - Claim denied to the assessee in an intimation issued by CPC, Bengaluru - assessee has filed return of income u/s. 139(4A) which is applicable to a Trust which is registered u/s. 12AA - assessee is not a registered trust but claim to be an educational trust eligible for deduction u/s 10(23C)(iiiad) thus applicable provision under which the return was to be filed was Sec.139(4C), thus same resulted into denial of deduction to the assessee - HELD THAT - Keeping in the principle of natural justice as well as CBDT Circular No.14 of 1955 dated 11.04.1955 which has taken a view that the officers of the department must not take advantage of ignorance of the assessee about his rights and it is their duty to assist the tax payer in every reasonable way particularly in the matter of claiming and securing reliefs, we accept the plea of Ld. AR. Accordingly, the matter is restored back to the file of jurisdictional AO to examine the claim of the assessee in terms of Sec.10(23C)(iiiad). The assessee is directed to substantiate its claim. Appeal stands allowed statistical purposes.

Summary

Issues:
1. Denial of deduction u/s. 10(23C)(iiiad) in an intimation issued by CPC, Bengaluru.
2. Delay in filing the appeal and condonation sought.
3. Correct filing provisions under Sec. 139(4A) instead of Sec. 139(4C).
4. Restoration of deduction issue to the jurisdictional AO for examination.
5. Principles of natural justice and CBDT Circular No.14 of 1955.

Analysis:
1. The appeal pertains to the denial of deduction u/s. 10(23C)(iiiad) in an intimation issued by CPC, Bengaluru on 30-03-2018. The denial was due to the assessee filing the return of income under the wrong provisions of Sec. 139(4A) applicable to registered trusts under Sec. 12AA, instead of Sec. 139(4C) applicable to educational trusts eligible for deduction u/s 10(23C)(iiiad). The denial was upheld as the assessee failed to file under the correct provision, leading to the denial of deduction.

2. The Registry noted a delay of 3 days in filing the appeal, which the Ld. AR sought condonation for. The delay was condoned, and the appeal was admitted for adjudication on merits.

3. The issue of incorrect filing provisions under Sec. 139(4A) instead of Sec. 139(4C) led to the denial of deduction. The Ld. AR requested the restoration of the deduction issue to the jurisdictional AO for examination under Sec. 10(23C)(iiiad). Citing principles of natural justice and CBDT Circular No.14 of 1955, which emphasizes assisting taxpayers in claiming reliefs, the plea was accepted. The matter was restored to the jurisdictional Assessing Officer for further examination, directing the assessee to substantiate its claim.

4. The judgment highlighted the importance of correct filing provisions and the duty of the department to assist taxpayers in claiming reliefs. By restoring the issue to the jurisdictional AO, the principles of natural justice were upheld, ensuring a fair examination of the assessee's claim under Sec. 10(23C)(iiiad).

5. Ultimately, the appeal was allowed for statistical purposes, emphasizing the need for proper adherence to the provisions of the Income Tax Act and the importance of correct filing to claim deductions under the relevant sections. The judgment aimed to ensure a fair and just examination of the assessee's claim, in line with the principles of natural justice and taxpayer assistance.