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2023 (11) TMI 735 - AT - Income TaxExemption u/s 11 - adjustment u/s 143(1) by CPC - trust has not e-filed the audit report in Form 10B one month prior to the due date for filing return u/s. 139(1), hence exemption claimed u/s. 11(1)(d) and Sr. No. 4i to 4viii of Part B- TI is not allowable - Assessee argued audit report could not be filed within the stipulated date due to several glitches in the New E filing portal and also the CA faced technical glitches in filing the same. The filing of audit report is directory and not mandatory and exemption cannot be denied merely for that reason. HELD THAT - As intimation u/s. 143(1) deals only with prima facie adjustments in respect of apparent information in the return and when a claim requires further inquiry, it cannot be disallowed without giving opportunity to the assessee. This issue is settled in the case of Veerappampalayam Primary Agricultural Co-op. Credit Society 2021 (4) TMI 1169 - MADRAS HIGH COURT in favor of the revenue, accordingly this ground is dismissed. Assessee submits that the income has to be computed on the total income and not on the entire gross receipts - Tax should be charged on the total income and not on the entire gross receipts. Further, intimation is passed u/s. 143(1) by the CPC. Assessee has filed return declaring income which has not been examined by the lower authorities and therefore for computation of income as per the Act, the matter should go back to the AO for computation of total income in the above terms. Accordingly, this issue is remitted to the AO for the purpose of verification and computation of total income as per law after giving reasonable opportunity of being heard to the assessee. The assessee is directed to file necessary documents and not to seek unnecessary adjournment. Claiming benefit of exemption duirng regular assessment or Appellate Stage - Audit report could not be filed in time due to technical glitch in the e-portal of the department - The assessee has submitted the reasons for non-filing of audit report within the stipulated date due to technical glitches in filing the audit report on the e-portal of the department and this grievance was submitted to the CPC. The ld. AR placed reliance on the judgment of the Hon ble Supreme Court where it is held that period from 15.3.2020 to 28.2.2022 shall stand excluded and in cases where limitation would have expired during the above period, time limit of 90 days or actual balance time (whichever is higher) shall be available from 01.03.2022 for filing appeals etc. Form 10B which was filed along with return on 15.03.2022 due to technical glitches in filing the Form 10B in the e-portal of the department as explained above by the assessee. In view of Hon ble Supreme Court judgment cited supra there is no delay in filing of Form 10B by the assessee and it is within the time allowed. The AO is directed to grant exemption claimed by the assessee in accordance with law. Appeal by the assessee is partly allowed for statistical purposes.
Issues involved:
The judgment involves issues related to the denial of exemption under sections 11 and 12 of the Income Tax Act, the computation of income on gross receipts, the filing of audit report in Form 10B, and the principles of natural justice. Issue 1 - Denial of Exemption under Sections 11 and 12: The assessee, a public charitable trust, filed its income tax return for AY 2021-22 along with audit report in Form 10B after the due date. The CPC denied exemption under sections 11 and 12 of the Act due to the belated filing of the audit report. The assessee contended that technical glitches in the e-portal caused the delay. The Tribunal noted that the filing of Form 10B was within the time allowed as per a Supreme Court judgment, and directed the AO to grant the exemption claimed by the assessee. Issue 2 - Computation of Income on Gross Receipts: The CPC computed the total income of the assessee based on gross receipts, which the assessee contested. The Tribunal referred to a previous decision and held that tax should be charged on the total income, not on gross receipts. As the lower authorities did not examine the income declared by the assessee, the matter was remitted to the AO for computation of total income as per law. Issue 3 - Filing of Audit Report in Form 10B: The assessee raised objections regarding the denial of exemption due to the late filing of the audit report in Form 10B. The Tribunal considered the technical glitches faced by the assessee and a Supreme Court judgment regarding the exclusion of certain periods for limitation purposes. It directed the AO to grant the exemption claimed by the assessee in accordance with the law. Issue 4 - Principles of Natural Justice: The assessee contended that the order of the CIT(A) was erroneous and against the principles of natural justice as it did not consider the appellant's contentions properly. The Tribunal dismissed one of the grounds based on a judgment from the Madras High Court. However, it allowed the appeal partly for statistical purposes, considering the arguments presented by the assessee. *This summary provides a detailed overview of the judgment, addressing each issue involved and the Tribunal's decision on each aspect.*
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