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2024 (7) TMI 20 - AT - Income TaxIssues: 1. Denial of exemption claimed under Section 10(23C)(iiiad) of the Income Tax Act, 1961. 2. Requirement of filing Form 10BB for claiming exemption. 3. Validity of rectification order passed by the Assessing Officer (AO). 4. Interpretation of judgment by the jurisdictional High Court regarding exemption under Section 10(23C)(iiiad). Issue 1: Denial of exemption claimed under Section 10(23C)(iiiad): The appellant, a charitable trust running 12 educational institutions, filed for exemption under Section 10(23C)(iiiad) for the assessment year 2016-17. The Central Processing Centre (CPC) did not allow the exemption, citing the failure to submit Form 10BB along with the return of income. The Assessing Officer (AO) passed a rectification order denying the claim due to non-filing of Form 10BB after the appellant's rectification application. The National Faceless Assessment Centre (NFAC) upheld the AO's decision. The appellant contended that the denial of exemption was unjustified as they had filed all necessary documents, and the denial was contrary to law and facts. The Accountant Member allowed the appeal, emphasizing that the appellant's case aligned with a judgment by the jurisdictional High Court, directing the AO to grant the exemption. Issue 2: Requirement of filing Form 10BB for claiming exemption: The appellant argued that they were not obligated to file Form 10BB as it is required only when claiming specific exemptions under Section 10(23C). The AO's insistence on the form for the appellant's case was deemed unjustified. The Accountant Member agreed with the appellant's position, stating that the denial of exemption based on non-submission of Form 10BB was unfounded and ordered the AO to act in accordance with the appellant's rectification petition. Issue 3: Validity of rectification order passed by the Assessing Officer: The AO's decision to deny the appellant's claim for exemption through a rectification order was challenged by the appellant. The Accountant Member found the AO's reasoning flawed and directed the AO to implement the appellant's rectification application, emphasizing that the matter was settled by the jurisdictional High Court's judgment. Issue 4: Interpretation of judgment by the jurisdictional High Court regarding exemption under Section 10(23C)(iiiad): The Accountant Member referenced a judgment by the jurisdictional High Court regarding the availability of exemption under Section 10(23C)(iiiad) to support the appellant's case. The judgment highlighted that each institution's annual receipts being below the prescribed limit allowed for the exemption. The Accountant Member applied the judgment's ratio to the appellant's case, concluding that the appellant was entitled to the exemption as claimed. The appeal was allowed, and the AO was directed to comply with the appellant's rectification petition. The Accountant Member's detailed analysis of the issues involved in the judgment showcases a thorough examination of the legal aspects and the application of relevant precedents to resolve the matter in favor of the appellant.
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