2024 (6) TMI 1418 - AT - Income Tax

Disallowing the claim u/s 11(2) - delay of 03 days in filing Form no.10 - assessee argued that for the year under consideration, the assessee filed Form no.10 on 10/11/2017, i.e., before filing of return of income, as the due date of filing of return of income was extended upto 07/11/2017 - HELD THAT - We condone the delay in filing Form no.10. Since the assessee has otherwise fulfilled all the conditions of section 11(2) of the Act, the addition of Rs. 15 lakh, has no legs to stand. In effect, the entire addition made by the AO and confirmed by the CIT(A) is hereby quashed. The grounds raised by the assessee in the present appeal are allowed.

Summary

Issues Involved:

1. Legality and validity of the order passed under Section 143(3) of the Income Tax Act, 1961.
2. Justification of the addition of Rs. 15,00,000/- by the Assessing Officer.
3. Disallowance of the claim under Section 11(2) of the Income Tax Act.
4. Consideration of the CBDT circular regarding condonation of delay.
5. Liability of interest under Sections 234A, 234B, and 234C of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Legality and Validity of the Order Under Section 143(3):

The assessee challenged the legality and validity of the order passed under Section 143(3) of the Income Tax Act, 1961, claiming it to be illegal, invalid, and bad in law. However, the judgment did not specifically address this issue separately, as the focus was primarily on the procedural aspects related to the filing of Form No. 10 and the subsequent addition of Rs. 15,00,000/-.

2. Justification of the Addition of Rs. 15,00,000/-:

The Assessing Officer made an addition of Rs. 15,00,000/- by disallowing the claim under Section 11(2) of the Income Tax Act, due to the failure of the assessee to file Form No. 10 within the due date specified under Section 139(1). The CIT(A) confirmed this addition, stating that the forms were not furnished electronically before the due date. The Tribunal, however, found that the delay in filing Form No. 10 was only 3 days and was due to technical reasons. The Tribunal noted that the CBDT Circular No. 6/2020 allows for the condonation of such delays, and hence, the addition was unjustified.

3. Disallowance of the Claim Under Section 11(2):

The Tribunal observed that the assessee had otherwise fulfilled all the conditions of Section 11(2) of the Act, except for the delay in filing Form No. 10. The Tribunal referred to the CBDT Circulars and relevant case laws, concluding that the delay should be condoned, and the claim under Section 11(2) should be allowed. Consequently, the disallowance of the claim was quashed.

4. Consideration of the CBDT Circular Regarding Condonation of Delay:

The Tribunal extensively discussed the CBDT Circulars No. 10/2019 and No. 6/2020, which provide for the condonation of delay in filing Form No. 10. It was noted that the power to condone such delays is vested with the Commissioner of Income Tax (Exemptions) under Section 119(2)(b) of the Act. The Tribunal directed the assessee to file a detailed petition with the Pr. CIT for condonation of delay, and until a decision is made, the recovery of demand should not be enforced by the AO.

5. Liability of Interest Under Sections 234A, 234B, and 234C:

The assessee also contested the liability of interest under Sections 234A, 234B, and 234C of the Income Tax Act, 1961. However, the Tribunal's judgment primarily focused on the procedural aspects related to the filing of Form No. 10 and the addition made by the AO. The issue of interest liability was not specifically addressed in detail, as the main contention was resolved by condoning the delay and allowing the claim under Section 11(2).

Conclusion:

The Tribunal allowed the appeal of the assessee, condoning the delay in filing Form No. 10 and quashing the addition of Rs. 15,00,000/-. The directions were given to file a petition for condonation of delay with the Pr. CIT, and until a decision is made, the recovery of demand should not be enforced. The grounds raised by the assessee were allowed, and the appeal was decided in favor of the assessee.