2023 (4) TMI 1377 - AT - Income Tax

Denial of exemption/deduction claimed u/s 11(2) - delay in filing the requisite form - whether the assessee can be denied the benefit of section 11 of the Act merely for the reason that Form-10 was filed belatedly i.e. after filing of return of income? - HELD THAT - The question in similar facts and circumstances has been answered in the favour of the assessee in the case of Shree Harsaniji Public Charitable Trust 2022 (6) TMI 1153 - ITAT AHMEDABAD where it was held that the benefit of Section 11 could not be denied merely due to delayed filing of Form 10 if it was submitted before the completion of rconcerned assessment. Appeal of the assessee is hereby allowed.

Summary

Issues Involved:

1. Denial of exemption under Section 11(2) of the Income Tax Act due to late filing of Form 10.
2. Applicability of CBDT Circulars and judicial precedents in condoning the delay in filing Form 10.
3. Requirement for quasi-judicial authorities to provide reasoned orders.

Detailed Analysis:

1. Denial of Exemption under Section 11(2):

The primary issue in this case was the denial of exemption under Section 11(2) of the Income Tax Act, 1961, due to the late filing of Form 10 by the assessee. The assessee, a registered trust, claimed an exemption of Rs. 8,09,518/- for the Assessment Year 2015-16. The Central Processing Cell (CPC) disallowed this exemption, as Form 10 was not filed along with the return of income. The CIT(A) upheld this decision, noting that the form was filed beyond the stipulated time and without condonation of delay by the CIT(Exemption).

2. Applicability of CBDT Circulars and Judicial Precedents:

The tribunal examined whether the delay in filing Form 10 could be condoned based on CBDT Circulars and judicial precedents. It was noted that prior to 2016-17, electronic filing of Form 10 was not mandatory, but the requirement to file it existed. The tribunal referenced a similar case, Shree Harsaniji Public Charitable Trust v. Income-tax Officer (Exemption), where it was held that the benefit of Section 11 could not be denied merely due to delayed filing of Form 10 if it was submitted before the completion of regular assessment. The tribunal highlighted CBDT Circular No. 7/2018, which allowed for condonation of delay in filing Form 10 for AY 2016-17, and noted that no time limit was prescribed for AY 2015-16. The tribunal emphasized the duty of tax officers to assist taxpayers and not take advantage of their ignorance.

3. Requirement for Quasi-Judicial Authorities to Provide Reasoned Orders:

The tribunal criticized the CIT(A) and CPC for failing to provide reasoned orders. It stressed the importance of quasi-judicial authorities giving detailed reasons for their decisions, citing observations from the Supreme Court that "reasons constitute the soul of a judicial decision." The tribunal found that the CIT(A) merely dismissed the appeal without considering the relevant circulars and judicial precedents. It reiterated the need for the tax authorities to guide taxpayers and ensure justice is rendered efficiently.

Conclusion:

The tribunal set aside the orders of the lower authorities and allowed the exemption claimed by the assessee under Section 11(2). It directed the CIT(A) to allow the deduction, emphasizing the importance of following judicial precedents and providing reasoned decisions. The appeal was allowed, and the tribunal's decision was pronounced in court.