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2016 (3) TMI 1469 - AT - Income TaxExemption u/s 11 - assessee is not entitled to claim of such exemption which was not made in the return - HELD THAT - As observed that the assessee society is registered u/s 12A of the Act and enjoys its benefits. In our considered view the ld. CIT(A) being an appellate authority ought to have considered the assessee's claim which was purely legal in nature and the reservation as contemplated in the Goetze India Ltd. 2006 (3) TMI 75 - SUPREME COURT is applicable to AO and not to the appellate authority. We are of the view that assessee's claim should have been considered and appropriate relief in accordance with law may be provided. We set aside the matter to the file of the AO to consider the assessee's claim afresh by providing adequate opportunity of being heard. If some compliance is further required, the assessee may be allowed to make the same and decide the grounds of appeal in accordance with law. Thus the appeal of the assessee is allowed for statistical purposes.
Issues involved:
1. Claim of exemption u/s 11 disallowed by CIT(A) based on Supreme Court judgment. 2. Non-consideration of claim by appellate authorities. 3. Dispute over filing of audit report u/s 12A. 4. Applicability of Supreme Court judgment on fresh claims without revised return. 5. Legal nature of the assessee's claim and its consideration by appellate authority. Analysis: Issue 1: Claim of exemption u/s 11 disallowed by CIT(A) based on Supreme Court judgment The assessee appealed against the CIT(A)'s decision not allowing the claim of exemption u/s 11, citing a Supreme Court judgment in the case of Goetze India Ltd. The appellant argued that the CIT(A) erred in not considering the claim even though the audit report u/s 12A and revised income computation were submitted during the proceedings. The AO acknowledged the charitable status of the assessee but refused the exemption u/s 11 due to procedural reasons. Issue 2: Non-consideration of claim by appellate authorities Both the CIT(A) and the AO did not entertain the assessee's claim based on the Goetze India Ltd. judgment. The appellant contended that the CIT(A) should have considered the legal nature of the claim despite the procedural constraints faced by the AO. The appellate tribunal noted that the reservation in the Goetze India Ltd. case applied to the AO, not the appellate authority, and directed the AO to reconsider the claim with proper hearing and compliance if necessary. Issue 3: Dispute over filing of audit report u/s 12A The AO's refusal to allow exemption u/s 11 was partly due to the non-filing of the audit report in Form 10B with the return of income. The assessee argued that the filing of the audit report was a directory requirement and that all relevant documents were submitted to the authorities. The tribunal emphasized the legal nature of the claim and directed the AO to reevaluate the claim, considering the charitable status of the assessee. Issue 4: Applicability of Supreme Court judgment on fresh claims without revised return The appellant relied on the Goetze India Ltd. case to argue that the appellate authority could entertain fresh claims without a revised return. Citing other case laws supporting this interpretation, the appellant contended that the CIT(A) should have considered the legal claim of exemption u/s 11 despite procedural lapses. Issue 5: Legal nature of the assessee's claim and its consideration by appellate authority The tribunal agreed with the appellant that the claim was legal in nature and should have been considered by the CIT(A) despite procedural challenges. Emphasizing that the appellate authority has the discretion to entertain fresh claims, the tribunal directed the AO to reexamine the claim and provide relief in accordance with the law, allowing the assessee to fulfill any necessary compliance requirements. Overall, the tribunal allowed the appeal for statistical purposes, setting aside the matter for the AO to reconsider the assessee's claim of exemption u/s 11, providing adequate opportunity for the assessee to be heard and comply with any necessary requirements.
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