9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 881 - AT - Income TaxDenial of deduction u/s. 10(23C) - Form 10B essential for claiming exemption was not furnished - intimation u/s. 143(1) - no exemption u/s. 11 of the Act was claimed rather the assessee had claimed exemption u/s. 10(23C)(iv) - as argued while filing the return, the above exemption was wrongly claimed u/s. 10(23C) of the Act instead of Section 11 in the return of income and as issue was debatable in nature and did not fall within the purview of prima-facie adjustment , as envisaged u/s. 143(1) - According to the Ld.AR, the claim of exemption u/s. 11 of the Act was maintainable and the Audit Report in Form 10B necessary for claiming this deduction was subsequently filed during the appellate proceedings before the Ld. JCIT(A) and, therefore, the denial of the genuine claim was not justified. Additional claim of deduction u/s. 11 of the Act made before the Ld.JCIT(A) was not entertained, who while rejecting the claim had directed the assessee to avail the remedy u/s. 119 HELD THAT - There is no denial to the fact that the claim for deduction u/s. 11 of the Act was not made in the return of income. The assessee had claimed deduction u/s. 10(23C) of the Act in the return. As the Form 10B essential for claiming exemption u/s. 10(23) was not furnished, the CPC had rightly rejected the claim. Therefore, the adjustment as made by the CPC, while processing the return, cannot be faulted. The contention of the assessee that the issue was debatable has no substance. The matter was only factual in nature and the CPC had made the adjustment u/s. 10(23C) as the mandatory Form 10BB was not available. As no deduction u/s. 11 of the Act was claimed in the return, the CPC never had the opportunity to examine the admissibility or rejection of this claim. Exemption u/s. 11 of the Act claimed in the appellate proceedings before the Ld.JCIT(A) was not entertained - It is seen from the intimation u/s. 143(1) of the Act that Form 10B was filed along with the return of income. However, no exemption u/s. 11 of the Act was claimed rather the assessee had claimed exemption u/s. 10(23C)(iv) of the Act as appearing at Sl.No.1 of the intimation. It is found from the Sl.No. 5 and 6 of the intimation that there was a common column for claim of exemption u/s. 10(23C)(iv) of the Act as well as for exemption u/s. 11 of the Act. Therefore, it was not apparent as to whether the total exemption as appearing in Sl.No.6 of intimation was in respect of section 11 or u/s. 10(23C)(iv) of the Act. CPC did not allow the claim of the assessee, but in the notes there is no mention as to why the claim of the assessee as made in the return was disallowed. However, there was a note at Sl.No.5 which stated that if the assessee considered that any part of the intimation was required to be rectified, then rectification u/s. 154 of the Act may be filed. Assessee in place of filing the rectification, preferred an appeal before the Ld.JCIT(A) and claimed for deduction u/s. 11. As already mentioned earlier, the Ld.JCIT(A) did not allow the claim of the assessee and advised to avail the remedy u/s. 119 of the Act. As already mentioned earlier, it is not clear from the intimation as to why the adjustment of Rs. 12,16,737/- was made while processing the return u/s. 143(1) of the Act. The exact reason for disallowing the claim of the assessee has also not been mentioned in the intimation. The audit report in Form 10B is a common audit report for deduction u/s 10(23C) and for section 12A of the Act, which entitles for deduction u/s 11 of the Act. Therefore, the CPC may have made a query as to under which section the deduction was claimed before disallowing the claim of the assessee. Revenue is, therefore, directed to intimate the exact reason for disallowing the claim of the assessee while processing the return. Thereafter, the assessee may file an application u/s. 154 of the Act to rectify the mistake in the intimation, as deemed proper. The assesse is also free to avail the remedy u/s. 119 of the Act, if he so desires. Appeal filed by the assessee is partly allowed.
Issues Involved:
1. Jurisdiction and adjustment u/s 143(1)(a) of the Act. 2. Granting of exemption u/s 11 & 12 of the Act. 3. Remedy u/s 119 of the Act. 4. Appeal remedy u/s 246A of the Act. 5. Principles of Natural Justice. 6. Levying interest u/s 234B/C of the Act. Summary: 1. Jurisdiction and adjustment u/s 143(1)(a) of the Act: The Tribunal held that the adjustment made by CPC Bengaluru u/s 143(1) of the Income Tax Act, 1961, denying the exemption u/s 10(23C) due to the non-filing of Form 10BB, was justified. The issue was factual, not debatable, and thus within the purview of "prima-facie adjustment" as envisaged u/s 143(1) of the Act. The assessee's contention that the issue was debatable was dismissed. 2. Granting of exemption u/s 11 & 12 of the Act: The Tribunal noted that the assessee had mistakenly claimed exemption u/s 10(23C) instead of u/s 11 in the return. The claim for exemption u/s 11 was made during the appellate proceedings, and the necessary Audit Report in Form 10B was filed later. The Tribunal upheld the JCIT(A)'s decision that the primary requirement was to claim the deduction u/s 11 in the return of income, which was not fulfilled. Hence, the exemption could not be allowed based solely on Form 10B filed during appellate proceedings. 3. Remedy u/s 119 of the Act: The Tribunal agreed with the JCIT(A) that the appropriate remedy for the assessee was to seek relief u/s 119(2)(b) of the Act, which allows for condonation of delay and admission of claims for exemption or deduction after the specified period. The JCIT(A) was not empowered to condone such delays or allow claims not made in the return. 4. Appeal remedy u/s 246A of the Act: The Tribunal acknowledged that the remedy u/s 119 of the Act is additional and does not bar the appellant from opting for an appeal u/s 246A. However, it emphasized that the primary requirement of claiming the deduction in the return was not met. 5. Principles of Natural Justice: The Tribunal found no breach of the principles of natural justice. The JCIT(A) had provided the assessee with a proper opportunity and passed a speaking order. Thus, the ground regarding the breach of natural justice was found infructuous. 6. Levying interest u/s 234B/C of the Act: The issue regarding the charging of interest u/s 234B/C of the Act was deemed consequential and dependent on the outcome of the primary issues. Conclusion: The appeal filed by the assessee was partly allowed. The Tribunal directed the Revenue to provide the exact reason for disallowing the claim while processing the return. The assessee was advised to file an application u/s 154 to rectify the mistake or to avail the remedy u/s 119 if desired. The order was pronounced in the Open Court on 19th April 2024 at Ahmedabad.
|
