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TMI Blog2021 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... ot required to be filed before his office, but has to be filed online in the Income Tax portal. Whereas, in the Income Tax portal the facility to file Form 10 online was not available. Thus it was not filed along with return of income and filed for the first time while submitting the rectification letter u/s. 154 on 11.1.2018. It is an admitted fact that the assessee has filed Form 10 manually before the AO within the due date of filing of return of income for the AY 2015- 16. However, these two assesses failed to file Form 10 electronically, then the AO denied exemption u/s. 11 on the reason that Form 10 was not electronically filed. In such circumstances, the Tribunal held that since the assessee has filed Form 10 manually before the due date of filing of return of income u/s. 139(1) and the filing of Form 10 electronically was on account of amendment of Rule 17 w.e.f. 1.4.2016. In the present case, the assessee has not filed Form 10 manually before the due date of filing return of income u/s. 139(1) of the Act. Being so, the decisions relied on by the ld. AR supra are of no assistance to the assessee. On this count, in our opinion, it is mandatory on the part of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act is not maintainable appeal that the appellant did not challenged the intimation issued by CPC u/s 143(1) of the Act. The appellant trust has filed rectification application u/s 154 letter against CPC intimation u/s 143(1) for disallowed claim of ₹ 6,99,58,902/- for non-filing Form 10 online, as e-filling form 10 which is mandatory w.e.f. from AY 2016-17. The Jurisdictional AO has rejected the rectification application that Form 10 was not filed electronically. There was no utility to file form 10 electronically for AY 2015-16 at online portal of income tax. Thus, dismiss of appeal by CIT (A) is bad in law. 2. On the basis of facts and the circumstances of the case and in law, the CIT (A) has not considered the CBDT circular no 7/2018 dated 20th December 2018 to grant condonation of delay for filing form 10 prior to assessment year 2016-17. Moreover, the appellant trust has filed form 10B electronically wherein it was mentioned about set apart amount was duly deposited as per section 11(5) of the act, the proof of deposit was submitted before CIT (A) and Jurisdictional AO. Thus, dismiss of appeal without considering the fact of the case is not correct. 3. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough email. 7. It is submitted that in the month of December 2017, that the appellant trust, while logging on to the Income Tax portal, came to know that demand amounting to ₹ 2,67,22,030/- was outstanding for AY 2015-16. The appellant trust, immediately sent a request for a copy of the Intimation u/s 143(1) to the CPC Bengaluru, on 24.12.2017. Simultaneously, on 25.12.2017, an online grievance was filed (UID 201712250466458), with a request to the CPC Bengaluru, to delete the outstanding demand raised, since investment of ₹ 6,99,58,902/- has been made as the provisions of section 11(5). In reply to the grievance filed, the CPC informed that rectification rights have been transferred to the jurisdictional assessing officer . 8. On 11.01.2018, the appellant trust filed a rectification application u/s 154, before the jurisdictional AO, namely, the DCIT Central Circle, Bellary, along with the following enclosures:- a) Copy of Tax Audit Report in Form 10B which was earlier e-filed on 28.08.2015 b) Copy of ITR acknowledgement for assessment year 2015-16, dated 30.08.2015. c) Copy of resolution passed by the Board of Trustees of the appellant tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1994] 208 ITR 568 (Raj) wherein it was held that the requirement to prescribe the time limit is only directory and not mandatory. Non-compliance within the stipulated time should not disentitle an assessee from the exemption to which he is otherwise entitled . The appellant cited the decision of the Hon Madras High Court in the case of Shri Chandraprabhuji Maharaj Jain v DCIT (Exemption) , wherein it has been held that where no assessment order under section 143(3) has been passed and the assessee has separately filed Form 10 along with Board Resolution, it is a fit case where the assessing officer should be directed to take note of Form 10 and take decision on merits . Reliance was also placed on the decision of the Mumbai High Court in the case of Nagpur Hotel Owners Association v CIT (Appeal) case No 1662 of 2019 , wherein it was held that if Form 10 is filed electronically before completion of assessment proceedings, then the exemption u/s 11(2) cannot be denied merely because the form was filed after the due date of filing of return of income u/s 139(1) . 13. The appellant also drew attention of the CIT(Appeals) to CBDT Circular No 10 of 2019 [F.No 197/ 55/ 2018-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing return of income. So, although electronic filing of Form 10 was not required, but manual filing of Form 10 was still required. Further, the claim of the appellant that circular of CBDT was not followed, the same needs to be rejected as the circular is relevant for the special circumstances relevant to assessment year 2016-17, and as such does not pertain to assessment year 2015-16. Without prejudice to the same, the appellant has not shown, that it had ever filed any such request for condonation of delay and that such delay had been condoned. Anyhow, these aspects could have been looked into if the appeal was against order u/s 143(1), but for rectification purposes the assessing officer could not have taken into account these aspects being brought to his knowledge . 16. The additional ground taken in appeal was also dismissed for the stated reason that this ground is not arising out of the rectification application filed by the appellant before the assessing officer. No such claim was made in the said rectification application. 17. Against this order of the CIT(Appeals), the assessee trust is in appeal before us. 18. In the first ground of appeal, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xistence of facts and circumstances which are not brought by the records of the case. 21. Further, what falls within the scope of rectification as visualized under the provisions of section 154, is the case of a mistake, and such mistake should be apparent from record. Judicial pronouncements on the subject have laid down the line of reasoning that the mistake should be obvious, clear, and patent and should not involve two opinions (CIT v PK Bhardwaj 279 ITR 326, CIT v Gujarat State Export Corporation Ltd 279 ITR 477). 22. The scope of making adjustments under section 143(1), is somewhat similar to the power to rectify a mistake apparent from the record under section 154 (Khatau Junker v Pathania [1992] 196 ITR 55, Bom). The Hon ble Bombay High Court has held as under:- 17. In fact, the wording of this provisions itself makes this very clear. Under clause (ii) of the proviso to section 143(1)(a), any loss carried forward, deduction, allowance or relief has to be allowed on the basis of the information available in such return or accounts or documents accompanying it. Similarly, under clause (iii) of the proviso, to disallow any deduction, allowance or relief cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowed under the proviso to section 143(1)(a). If any further enquiry is necessary, or if the Income-tax Officer feels that further proof is required in connection with the claim for deduction, he will have to issue a notice under sub-section (2) of section 143. 23. It was submitted that in the present case the adjustment made by the CPC Bengaluru, was on account of non-filing of Form 10 electronically. It is an admitted fact that the portal of the Income Tax Department did not contain any facility for online filing of Form 10, in AY 2015-16 and it was only with effect from 1.04.2016 that this facility was made available for tax filers. The CIT (Appeals) has admitted the same in para 4.2 of his impugned order. It is submitted that the CIT (Appeals) has failed to address the issue at hand. The record available before the CPC Bengaluru, was the return of income for assessment year 2015-16 and the tax audit report in Form 10B both of which had been filed by the appellant trust prior to the due date. As mentioned earlier, para 9(vi) of the Return of Income shows that an amount of ₹ 6,99,58,902/- is set apart for application towards specified purposes as per provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection to verify Form no.10 filed by the assessee manually, as stated by the learned Counsel for the assessee and allow assesses claim of exemption under section 11(2) of the Act. 25. The ITAT Mumbai in Shree Dadar Jain Paushadhshala Trust Vs. ITO (E) vide order dated 19.08.2019 for AY 2014-15 wherein the assessee company had failed to submit form 10 before filing of return u/s 139(1) of the Act. The assessee company duly submitted manual Form 10 during the assessment proceedings and electronically submitted Form 10 during the appellate proceedings. The Tribunal observed that in supersession of earlier Circular/Instruction issued in this regard, with a view to expedite the disposal of applications filed by trusts for condoning the delay and in exercise of the powers conferred u/s. 119(2)(b) of the Act, the Central Board of Direct Taxes authorized the Commissioners of Income-tax, to admit belated applications in Form No. 9A and Form No.10 in respect of AY 2016-17 where such Form No. 9A and Form No.10 are filed after the expiry of the time allowed under the relevant provisions of the Act. Considering the view in totality of the entire factual matrix and circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered on different facts. 28. We have heard the rival submissions. In this case, exemption u/s. 11(2) was rejected by the CPC while processing return u/s. 143(1) of the Act on the reason that assessee has not electronically filed Form 10 along with return of income. As per provisions of Rule 17 r.w. Rule 12(2) of the Income-tax Rules, 1962, Form 10 was required to be furnished electronically. Since the assessee has not filed Form 10 electronically, the claim of assessee for exemption u/s. 11(2) was denied. The assessee has even failed to file Form 10 manually within the stipulated time. It has been filed with the jurisdictional AO along with copy of Board Resolution while submitting the request for rectification u/s. 154 on 11.1.2018, though it was dated 25.8.2015. The assessee trust has not filed Form 10 with the jurisdictional AO at the time of filing return of income. According to the assessee, it has not filed Form 10 with the jurisdictional AO as the ACIT, Raichur has informed the assessee that the same is not required to be filed before his office, but has to be filed online in the Income Tax portal. Whereas, in the Income Tax portal the facility to file Form 10 online w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that this was brought to the attention of the CIT (Appeals) vide letter dated 18th March 2020. However, the CIT (Appeals) in his impugned order has not considered this issue. 33. The ld. DR submitted that the issue under consideration is applicability of provision under Section 154 and not a challenge to an order under Section 143(1) of the Act. The circular of CBDT referred to by the is relevant for the special circumstances relevant to AY 2016-17 and as such does not relate. to AY 2015-16 i.e., the year under consideration. The assessee has not shown that it had ever filed any such request for condonation of delay before any authority and that the same was condoned. However, these aspects could have been looked into if the appeal was against order under Section 143(1) of the Act but for rectification purposes the AO could not have taken into account these aspects being brought to his knowledge. Since the relief sought would not fall within the scope of section 154, the action of the AO in rejecting the rectification application was to be upheld. 34. We have heard both the parties and perused the material on record. As per CBDT Circular No.7/2018, the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) CIT v Maharana of Mevar Charitable Foundation 11.9871 164 ITR 439 (Raj) c) Padanilam Welfare Commissioner Trust v DOT Chennai ITA No 444/Mds/2010 as well as d) CIT v Institute of Banking Personnel [2003] 131 taxmann 386 (BOM). 37. Further, it was submitted that section 143(1) states that an adjustment can be made if an incorrect claim is apparent from information contained in the return of income. The CPC Bengaluru, could have allowed the appellant trust to set off this accumulated loss / application even if the claim u/s 11(2) was considered unacceptable due to non-filing of Form 10 electronically. 38. It is submitted that by ignoring the information contained in letter submitted before CIT(Appeals), Panaji Goa, the CPC Bengaluru committed an error, which is rectifiable by recourse to section 154. Admittedly, this was not raised in the rectification application before the AO. However, this was raised by means of additional ground before the Cl'(Appeals). 39. The ld. AR submitted that the CIT(Appeals) has not given any finding whether the action of CPC Bengaluru in ignoring information is rectifiable u/s. 154 or not. He has dismissed the additional g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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