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2021 (5) TMI 148 - AT - Income TaxEligibility of exemption u/s 11 - CIT(A) not granting exemption on the pretext of filling of Form 10BB on 06.06.2017 during the pendency of assessment proceedings - HELD THAT - It is not out of place to mention here that appeal of the assessee for Asst. Year 2014- 15 and 2015-16 has already been allowed by your goodself.It is not the power of the A.O to intervene into the matters o f charging of fees from students and paying salary to staff of school and it is not a criteria on the basis of which exemption u/s 10(23C)(Vi) be denied which has already been granted to the school by the ITAT-Amritsar - There is no discussion as to why the order of the CIT(A) passed in the immediately preceding assessment year which has been upheld by the Co-ordinate Bench was not considered while deciding the issue as SANSKRITI KMV SCHOOL, 2019 (5) TMI 1864 - ITAT CHANDIGARH - Appeal of the assessee is allowed for statistical purposes.
Issues Involved:
1. Denial of exemption under Section 11 of the Income Tax Act, 1961. 2. Consideration of exemption under Section 10(23C)(vi) granted by ITAT. 3. Filing of Audit Report in Form 10BB. 4. Ignoring CBDT Circular No. 10/2019 regarding condonation of delay in filing Form 10BB. Detailed Analysis: 1. Denial of Exemption under Section 11: The appellant challenged the CIT(A)'s decision to uphold the AO's denial of exemption under Section 11 of the Income Tax Act, 1961. The appellant argued that the CIT(A) failed to consider the ITAT's order dated 22.02.2017, which granted exemption under Section 10(23C)(vi) effective from the assessment year 2015-16. The appellant contended that the CIT(A) erred in not granting exemption due to the delayed filing of Form 10BB, which was submitted during the assessment proceedings. 2. Consideration of Exemption under Section 10(23C)(vi) Granted by ITAT: The appellant emphasized that the ITAT had previously granted exemption under Section 10(23C)(vi) for the assessment year 2015-16. The appellant argued that this precedent should have been considered by the CIT(A) for the assessment year 2016-17. The appellant pointed out that the CIT(A) had previously ruled in favor of the appellant for the assessment year 2015-16, and this decision was upheld by the ITAT. The appellant asserted that the same facts and circumstances applied to the current assessment year, and thus, the CIT(A) should have followed the ITAT's earlier decision. 3. Filing of Audit Report in Form 10BB: The appellant argued that the filing of the Audit Report in Form 10BB is directory and not mandatory, and it can be filed at the stage of assessment. The appellant cited ample case law supporting the position that filing Form 10BB at the assessment stage constitutes sufficient compliance with the law, particularly in cases where the approval for exemption came late. The appellant contended that the AO's insistence on the timely filing of Form 10BB was unreasonable, given the peculiar facts of the present case. 4. Ignoring CBDT Circular No. 10/2019: The appellant contended that the CIT(A) wrongly ignored Circular No. 10/2019 dated 22.05.2019, issued by the CBDT, which granted blanket permission for condonation of delay in filing Form 10BB for the assessment year 2016-17. The appellant argued that this circular was binding on both the AO and CIT(A) and should have been considered in the appellant's favor. Judgment: The tribunal noted that the CIT(A) did not consider the ITAT's earlier decision for the assessment year 2015-16, which was in favor of the appellant. The tribunal found that the CIT(A) failed to provide reasons for not following the ITAT's precedent. The tribunal also observed that the appellant had relied on the ITAT's order during the proceedings, but the CIT(A) did not address this reliance adequately. The tribunal acknowledged the appellant's argument that the filing of Form 10BB at the assessment stage was sufficient compliance with the law. The tribunal also recognized the appellant's reliance on CBDT Circular No. 10/2019, which allowed for the condonation of delay in filing Form 10BB. In conclusion, the tribunal allowed the appeal of the assessee, emphasizing consistency and the absence of any arguments to the contrary. The tribunal pronounced the order in favor of the appellant, allowing the appeal for statistical purposes. Order Pronounced: The order was pronounced on 29th April 2021 during a virtual hearing via Webex, in the presence of the parties. The appeal of the assessee was allowed for statistical purposes.
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