2024 (10) TMI 480 - AT - Income Tax

Exemption u/s 11 - denial of exemption on the ground that the details of registration u/s 12A were not provided - filing of return and audit report within the time limit prescribed u/s 139(1) was not established - HELD THAT - We find that in the light of CBDT order dated 27.09.2019, the observation of the ld. Addl./JCIT(A)-5, Chennai is not correct since the last date for filing of the return and audit report for asstt. year 2019-20, which was 30.09.2019, was extended up to 30.10.2019 admittedly the same were filed on 23.10.2019, therefore, the return of income as well as audit report in Form 10B was filed within the prescribed time allowed by the CBDT and, therefore, the delay which was not there, cannot be the basis of denial of exemption u/s 11 as mentioned by the ld. Addl./JCIT(A)-5, Chennai. The acknowledgement of income tax return and Form 10B audit report dated 23.10.2019 was produced before us. We therefore find force in the argument of assessee that the ld. Addl./JCIT(A)-5, Chennai has erred in holding that the return of income and audit report was filed belatedly. Since the income tax return and audit report in Form 10B was filed within the prescribed time, ld. Addl./JCIT(A)-5, Chennai ought not to have disallowed this ground of appeal. - Thus direct the JAO to delete the adjustment - Decided in favour of assessee.

Issues:
1. Denial of exemption u/s 11 due to alleged non-compliance with conditions under sections 12A(1)(b) and 12A(1)(ba).
2. Consideration of alternate claim for exemption u/s 10(23C)(iiiab).
3. Dispute over the filing date of income tax return and audit report.
4. Adjudication of Revenue's appeal challenging the allowance of exemption.

Analysis:

1. The appellate tribunal addressed the issue of denial of exemption u/s 11 to the assessee due to alleged non-compliance with conditions under sections 12A(1)(b) and 12A(1)(ba). The tribunal found that the filing of the income tax return and audit report within the prescribed time limit was crucial for compliance. The tribunal noted that the last date for filing was extended by the CBDT, and as the documents were filed within the extended deadline, the denial of exemption by the lower authority was deemed incorrect.

2. The tribunal considered the alternate claim for exemption u/s 10(23C)(iiiab) by the assessee. It was observed that the appellant, an educational society receiving significant government grants, was eligible for this alternate claim. The tribunal highlighted that the impediment under section 11(7) did not apply to the alternate claim under section 10, and thus, the tribunal directed the deletion of the adjustment and granted relief to the appellant.

3. A dispute arose regarding the filing date of the income tax return and audit report, with the Revenue contending that the documents were filed belatedly. However, the tribunal, after examining the CBDT order extending the filing deadline, concluded that the documents were filed within the prescribed time. Consequently, the tribunal allowed the cross objection filed by the assessee and directed the deletion of the adjustment made by the lower authority.

4. The Revenue's appeal challenging the allowance of exemption was adjudicated by the tribunal. The Revenue argued that neither exemption u/s 11 nor u/s 10(23C)(iiiab) should be allowed due to the alleged belated filing of documents. However, the tribunal, having already allowed the cross objection and established the timely filing of documents, dismissed the Revenue's appeal, finding no merit in the Revenue's contentions.

In conclusion, the tribunal dismissed the Revenue's appeal while allowing the cross objection filed by the assessee. The judgment clarified the compliance requirements for exemption claims and emphasized the importance of timely filing of income tax returns and audit reports in determining eligibility for exemptions under the Income Tax Act.

← Previous Next →