2023 (10) TMI 1404 - AT - Income Tax

Deduction u/s 11/12 - as per DR assessee filed return of income belatedly and did not file Form No. 10B to lay claim on applicable deduction u/s 11 /12 - assessee was registered u/s 12AA - Assessee placed on record condonation petitions filed by the assessee trust before appropriate authorities CBDT / CIT (Exemptions) seeking condonation of delay u/s 119(2)(b) HELD THAT - We are of the considered opinion that though the assessee has valid registration u/s 12AA, still, it has to comply with the mandatory requirements of law to lay claim on impugned deduction. The law mandates the assessee to file return of income within due date as prescribed u/s 139(1) along with Form No. 10B so as to lay claim on this deduction. Certainly, the assessee has defaulted in the same. AR has submitted evidences of seeking relevant condonation from appropriate authorities. Therefore,restore the appeal back to the file of Ld. CIT (A) for fresh adjudication in the light of condonation petitions filed by the assessee. All the issues are kept open.

Summary

Issues:
1. Allowance of benefit under section 11 of the Income Tax Act without considering distinct assessment years.
2. Denial of benefits of sections 11 and 12 due to late filing of return and non-submission of Form No. 10B.
3. Availability of exemption under section 11 only upon compliance with mandatory conditions.

Analysis:

Issue 1:
The appeal by Revenue for Assessment Year 2020-21 challenged the order of the Commissioner of Income Tax (Appeals) regarding the allowance of benefits under section 11 of the Income Tax Act. The Revenue contended that each assessment year is distinct, and the issue should be decided afresh each year. The Revenue relied on a Supreme Court decision stating that Res judicata does not apply to tax matters for different assessment years. The Tribunal acknowledged the distinct nature of each assessment year and emphasized that compliance with the law is essential to claim deductions.

Issue 2:
The Revenue argued that benefits under sections 11 and 12 were denied due to the late filing of the return and non-submission of Form No. 10B. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to grant the deduction, considering the assessee's valid registration under section 12AA. However, the Tribunal noted that despite valid registration, compliance with mandatory requirements, such as filing the return within the due date and submitting Form No. 10B, is necessary to claim the deduction. The Tribunal set aside the Commissioner's order for fresh adjudication based on the condonation petitions filed by the assessee.

Issue 3:
The Tribunal highlighted that although the assessee had valid registration under section 12AA, compliance with statutory requirements is crucial to claim the deduction under section 11. The law mandates timely filing of the return along with Form No. 10B to avail of the deduction. The Tribunal considered the condonation petitions submitted by the assessee and remanded the case for fresh adjudication, keeping all issues open for consideration.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of complying with statutory requirements for claiming deductions under the Income Tax Act. The case was remanded for fresh adjudication based on the condonation petitions filed by the assessee.