2023 (9) TMI 676 - AT - Income Tax

Exemption u/s 10(23C)(vi) - CIT(E) rejecting the application of assessee seeking exemption as filed after due date - HELD THAT - It is apparent that assessee society had applied for exemption u/s 10(23C)(vi) on October, 2018 whereas the due date for filing the same was 30 th September, 2018. Therefore, the Ld. CIT(E), Bhopal had correctly rejected the application of the assessee in accordance with provisions of law. Decided against assessee.

Summary

Issues:
The judgment involves issues related to rejection of application u/s 10(23C)(vi) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Exemptions), Bhopal, based on grounds of non-compliance with educational purpose and belated filing of application.

Details:
1. The appellant, an AOP, filed the return of income for AY 2018-19 and subsequently applied for exemption u/s 10(23C)(vi) on 20/10/2018. The application was rejected by the CIT (Exemption), Bhopal on 26/09/2019, leading to the appellant's appeal.

2. Despite multiple hearing dates, the appellant failed to represent their case, while the Department was duly represented by the CIT-DR. Due to lack of representation by the appellant, the Tribunal decided to proceed with the matter based on its merits.

3. The CIT(E) offered an opportunity to the appellant to explain the genuineness of their activities. Upon review, it was found that the society engaged in trading activities rather than exclusively educational pursuits, as required by law. Lack of evidence of running an educational institution and reliance solely on trading income were noted.

4. The appellant contended that they were not given a proper opportunity to be heard. However, the Tribunal upheld the CIT(E)'s decision, citing the appellant's belated application filing as the reason for rejection, in accordance with the law.

5. The Tribunal found the appellant's argument regarding lack of proper hearing opportunities unsubstantiated, as the rejection was primarily due to the application being filed after the prescribed deadline. Consequently, the appeal was dismissed, and the CIT(E)'s decision was upheld.

This judgment highlights the importance of compliance with statutory deadlines and the necessity for entities seeking tax exemptions to adhere strictly to the prescribed regulations, especially regarding the nature of their activities in relation to the provisions of the Income Tax Act.