2022 (12) TMI 209 - AT - Income Tax

Exemption u/s. 11 - Denial of said exemption for non-filing of Form 10 within time - HELD THAT - As on-line Form 10 on 28-04-2017 as it required to be filed before due date of furnishing Income Tax Return u/s. 139(1) of the Act. It is noted from the said chart that the assessee filed return of income on 31-10-2015. Since, the Rule 17 came into force for A.Y. 2016-17 and it is not applicable to the year under consideration. There is no dispute with regard to availability of Resolution on Form 10 with the assessee manually on 22- 08-2015 which is noted by the CIT(A) in para 5 of the impugned order. Admittedly, the availability of Form 10 manually with the assessee is before due date of filing of return of income u/s. 139(1) as the assessee filed return of income on 31-10-2015. The availability of manual Form 10 with the assessee on 22-08-2015/20-09-2015 was not disputed by the ld. DR. Assessee filed Form 10 manually with the return of income and it is very much within time. Therefore, the order of CIT(A) is not justified in confirming the order of CPC in denying the exemption u/s. 11 of the Act for non-filing of Form 10 on on-line and it is set aside. Thus, the ground raised by the assessee is allowed. Condonation of delay in filing Form 10 for the relevant assessment year - Appeal for A.Y. 2015-16 - Admittedly no application was filed with the CIT(A) to condone the delay in filing Form 10 on-line by the assessee which is required to file before due date of fling of return of income. We note that the Hon ble High Court of Bombay Little Angels Education Society 2021 (3) TMI 1088 - BOMBAY HIGH COURT was pleased to grant opportunity to the assessee under writ proceedings having exercising special original extraordinary jurisdiction u/s. 226 of the constitution. Thus conclusion of the fact no such direction or whatsoever could be granted by this Tribunal. It is open to the assessee to seek remedy available under law to its benefit. Thus, no infirmity in the order of CIT(A) and it is justified. Thus, the ground raised by the assessee fails and it is dismissed.

Summary

Issues:
1. Delay in filing appeals condoned due to lockdown.
2. Denial of exemption u/s. 11 for non-filing of Form 10 for A.Y. 2015-16.
3. Applicability of Rule 17 for A.Y. 2017-18 regarding Form 10 filing.
4. Failure to file application for condonation of delay in filing Form 10 for A.Y. 2017-18.

Analysis:
1. The judgment deals with two appeals by the assessee against a common order passed by the CIT(A) for A.Y. 2015-16 and A.Y. 2017-18. The delay in filing the appeals was 04 days, which was condoned by the Tribunal due to a decision of the Hon'ble Supreme Court during the Covid-19 lockdown.

2. For A.Y. 2015-16, the primary issue was the denial of exemption u/s. 11 for non-filing of Form 10. The assessee, a charitable trust, had filed Form 10 manually with the return of income before the due date, as required by law. The Tribunal found that Rule 17, which was cited by the CIT(A) to deny the exemption, was not applicable to the relevant assessment year. Therefore, the Tribunal set aside the CIT(A)'s order and allowed the appeal of the assessee.

3. Regarding A.Y. 2017-18, the Tribunal considered the applicability of Rule 17, which came into force from 01-04-2016. The assessee had filed Form 10 manually before filing the return of income. However, the Tribunal noted that the assessee failed to file an application for condonation of delay in filing Form 10 online, as required by Circulars issued by the CBDT. Despite citing a decision of the Hon'ble High Court of Bombay granting such an opportunity, the Tribunal held that it could not grant such relief and dismissed the appeal of the assessee.

4. In conclusion, the Tribunal allowed the appeal of the assessee for A.Y. 2015-16 as the denial of exemption u/s. 11 was found unjustified. However, for A.Y. 2017-18, the appeal was dismissed due to the failure of the assessee to file an application for condonation of delay. The judgment was pronounced on 27th September 2022.