2024 (4) TMI 1114 - AT - Income Tax

Exemption u/s 11 - The NFAC/Ld.CIT(A) allowed the deduction - assessee has not e-filed or not filed return within due date - asssessee's return of income filed after due date u/s 139(1) BUT filed its Form 10B within due date of filing of such audit report - HELD THAT - There is no dispute about filing of Form-10AB, which is filed with the time prescribed. The objection of Assessing Officer objected only on filing return of income after due date of filing return of income prescribed under section 139(1). We find that in Case Tulsidas Gopalji Charitable and Chaleshwar Temple Trust 1993 (9) TMI 75 - BOMBAY HIGH COURT held that on a careful reading of the provisions of sub-sections (1) and (4) of Section 139 lead to an inevitable conclusion that a return made within the time specified in sub-section (4) has to be considered as having been made within the time prescribed in sub-section (1) or subsection (2) of Section 139. We further find that CBDT in its Circular No.6/2020 dated 19.02.2020 and Circular No.173/193/2019-ITA-I dated 23.04.2019 clarified that for availing benefit of Section 11, the registered under section 12A shall file its return of income within time allowed under section 139. NFAC/Ld.CIT(A) specifically held that Section 139 includes belated return under section 139(4) and CBDT has directed that demand raised on this issue are to be rectified. We find that ld CIT(A) by following the mandates of aforesaid circulars allowed relief to the assessee. on independent examination of facts of the case, we do not find any infirmity in the order of ld CIT(A), which we affirm. Appeal of the Revenue is dismissed.

Summary

Issues:
The issues involved in this case are:
1. Allowance of deduction u/s 11(2) of the Income Tax Act.
2. Eligibility for exemption u/s 11 of the Act despite filing return belatedly u/s 139(4).
3. Interpretation of Circular No.173/193/2019-ITA-1 by the CBDT.

Issue 1: Allowance of deduction u/s 11(2) of the Income Tax Act:
The Revenue appealed against the order of the National Faceless Appeal Centre, Delhi regarding the deduction of Rs. 46,00,000 under section 11(2) of the Act. The appeal was based on the grounds that the deduction was denied due to the late filing of the return of income by the assessee-trust. The Assessing Officer disallowed the deduction under section 11, stating that it is mandatory to file the return of income within the stipulated period under Section 139. However, the assessee argued that the deduction was legitimate as Rs. 46.00 lakh had been accumulated and set apart for the specified purpose u/s 11(2) of the Act. The assessee relied on Circular No.173/193/2019-ITA-1 by the CBDT, which clarified the conditions for availing the benefit of Section 11.

Issue 2: Eligibility for exemption u/s 11 despite filing return belatedly u/s 139(4):
The assessee, a trust registered under section 12AA, filed its return of income for the assessment year 2018-19 after the due date under section 139(1) of the Act. The Assessing Officer raised a demand of Rs. 17,71,120/- and denied the deduction under section 11. The assessee contended that the return was filed belatedly within the extended time allowed u/s 139(4) and that Rs. 46.00 lakh was accumulated for the specified purpose u/s 11(2) of the Act. The assessee's case was supported by Circular No.173/193/2019-ITA-I by the CBDT, which clarified the conditions for availing the exemption under section 11.

Issue 3: Interpretation of Circular No.173/193/2019-ITA-1 by the CBDT:
The NFAC/Ld.CIT(A) considered the submissions of the assessee and the CBDT's Circular No.173/193/2019-ITA-I dated 23.04.2019. The Circular clarified that for availing the benefit of Section 11, a trust registered under section 12A must file its return of income within the time allowed under section 139. The NFAC/Ld.CIT(A) held that the assessee's case was covered by the Circular, and therefore, allowed the appeal. The Revenue challenged this decision before the Tribunal, arguing on the constitutional validity of Section 11(2) and relying on previous decisions.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the order of the NFAC/Ld.CIT(A) based on the interpretation of the relevant provisions of the Income Tax Act and the Circular issued by the CBDT. The Tribunal found no infirmity in the order of the Ld.CIT(A) and upheld the relief granted to the assessee.