2024 (10) TMI 25 - AT - Income Tax

Denial of exemption u/s 11(1) - Form 10B was not submitted in the e-filing portal till date of the order of the FAA - HELD THAT - We note from the intimation that as per return furnished, the assessee is not registered u/s. 12A/12AA or approval u/s. 10(23C)(iv), (v), (vi) or (via) for claiming exemption as made by the assessee in sl. No.4(i) to (viii) of Schedule Part B-T1. These fields are mandatory for claim of exemption u/s. 11 or 10(23C)(v) or 10(23C)(vi) or 10(23C)(via). Hence exemption was not allowed by the CPC. We also note from Form 10B digitally signed on 16.09.2019 which shows that Form 10B was filed by the assessee, but how it does not appear in e-filing portal is best known to the department. Thus, we remit the issue back to the file of CIT(A) for fresh consideration and decision as per law. The assessee is directed to file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Assesee appeals allowed for statistical purposes.

Issues Involved:
1. Violation of principles of natural justice due to lack of opportunity for video conferencing.
2. Non-condonation of delay in filing the appeal.
3. Non-consideration of COVID-19 period as a reasonable cause for delay.
4. Denial of exemption under section 11(1) of the Income-tax Act.
5. Denial of set-off of brought-forward deficit.
6. Non-filing of Form 10B within the due date.
7. Non-disclosure of registration under section 12A in the return of income.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The appellant contended that the Commissioner of Income Tax (Appeals) erred by not providing an opportunity of being heard via video conferencing despite a specific request. This action was deemed a violation of the principles of natural justice. The Tribunal recognized this as a critical issue and emphasized the need for reasonable opportunities to be given to the appellant for a fair hearing.

2. Non-Condonation of Delay in Filing the Appeal:
The appellant argued that the delay in filing the appeal was due to awaiting a response from the Jurisdictional Assessing Officer (JAO) and the impact of COVID-19. The First Appellate Authority (FAA) dismissed the appeal without condoning the delay, stating that the appellant failed to demonstrate sufficient cause. However, the Tribunal found that the delay was not due to any malafide intention and was a result of personal oversight. The Tribunal cited several judgments to support the principle that substantial justice should be prioritized over technicalities, and thus condoned the delay.

3. Non-Consideration of COVID-19 Period as Reasonable Cause:
The appellant highlighted that the delay in filing the appeal was significantly influenced by the COVID-19 pandemic. The Tribunal acknowledged the extended time limits set by the Hon'ble Apex Court during the pandemic and found the appellant's reasons for delay to be reasonable. The Tribunal emphasized that the pandemic period should be considered a sufficient cause for the delay.

4. Denial of Exemption Under Section 11(1) of the Income-tax Act:
The appellant claimed an exemption under section 11(1), which was denied by the Centralized Processing Centre (CPC) without providing a reason. The Tribunal noted that the exemption claimed was correct and should have been considered during the return processing. The matter was remitted back for fresh consideration, with directions for the appellant to provide necessary documents to substantiate the claim.

5. Denial of Set-Off of Brought-Forward Deficit:
The appellant argued that the Commissioner of Income Tax (Appeals) erred in not allowing the set-off of the brought-forward deficit from earlier years against the current year's surplus. The Tribunal did not provide a detailed analysis on this specific issue but included it in the remand for fresh consideration.

6. Non-Filing of Form 10B Within the Due Date:
The appellant contended that Form 10B was duly filed and digitally signed before the due date, but it was not reflected in the e-filing portal. The Tribunal found that the appellant had complied with the filing requirements and that the issue might be due to a technical glitch in the department's portal. The matter was remitted back to the CIT(Appeals) for fresh consideration with instructions to verify the filing of Form 10B.

7. Non-Disclosure of Registration Under Section 12A in the Return of Income:
The appellant failed to disclose the registration under section 12A in the return of income, leading to the denial of exemption claims. The Tribunal noted that the appellant is a registered society and the omission was a result of oversight. The Tribunal directed the CIT(Appeals) to re-examine the issue and verify the registration details.

Conclusion:
The Tribunal allowed both appeals for statistical purposes, remanding the matters back to the CIT(Appeals) for fresh consideration and decision as per law. The Tribunal emphasized the need for the appellant to update necessary details and cooperate with the proceedings, ensuring that reasonable opportunities for hearing are provided.

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