2019 (5) TMI 1125 - AT - Income Tax

Exemption u/s 11 - grant of approval for renewal u/s 80G(5) denied - assessee has filed blank Form No.10 r.w.r. 17 of the Income Tax Rule, 1962, it is established to have filed as blank at all because objects are not at all specified, spelt out or set out in the Form No.10 - HELD THAT - It appears that the said Form No.10 though placed before the Learned AO was not duly filled up. Though such defect was curable in nature the same was not accepted by the Learned CIT(A) in appeal in spite of having been placed upon rectification before him along with the written submission by the assessee. We find that the assessee could have been given an opportunity of being heard on the additional evidences on the basis of the rectified filled up Form No.10 for the ends of justice by the first appellate authority itself. In that view of the matter, we find it fit and proper in order to prevent the miscarriage of justice to set aside the issue to the file of the CIT(A) with the direction upon him to take into consideration the filled up Form No.10 as submitted by the assessee before him and also the additional evidences and to pass orders upon affording an opportunity of hearing to the assessee - Assessee s appeal is allowed for statistical purpose.

Issues:
1. Appeal against orders passed by the Commissioner of Income Tax (Appeals) under sections 143(3) and 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2011-12.
2. Filing of Form No.10 with unspecified trust objectives leading to denial of exemption and addition to total income.
3. Discrepancy in Form No.10 filing, rectification efforts, and rejection by the first appellate authority.
4. Appeal against penalty based on the quantum order being quashed.

Analysis:
1. The appeals were directed against orders passed by the Commissioner of Income Tax (Appeals) for the Assessment Year 2011-12. The assessee, a charitable trust, declared total income of ?1,63,420. Subsequently, a scrutiny notice was issued, and during the proceedings, it was observed that Form No.10 filed by the assessee was blank, leading to denial of exemption of ?17,50,000 and addition to total income. The contention regarding the blank form was disputed, stating it was a mistake by the computer operator, and rectification efforts were made by submitting additional evidence and resolution details. The first appellate authority upheld the addition based on the insufficiently filled Form No.10, leading to the appeal before the ITAT.

2. During the appeal hearing, it was argued that the defect in Form No.10 was curable and rectified by the assessee, but the first appellate authority did not consider the rectified form and additional evidence provided. The ITAT found that the assessee should have been given an opportunity to be heard on the rectified form and additional evidence. To prevent a miscarriage of justice, the ITAT set aside the issue to the file of the first appellate authority with directions to consider the rectified Form No.10 and additional evidence, providing a hearing opportunity to the assessee. The appeal was allowed for statistical purposes.

3. As the quantum appeal was allowed by the ITAT, the penalty appeal lost its basis and was deemed infructuous. Consequently, the penalty appeal was dismissed as infructuous. In the combined result, the assessee's appeal in ITA No.903/Ahd/2015 was allowed for statistical purposes, while the appeal in ITA No.717/Ahd/2017 was dismissed as infructuous.

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