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TMI Blog2024 (4) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... jecting the claim had directed the assessee to avail the remedy u/s. 119 HELD THAT:- There is no denial to the fact that the claim for deduction u/s. 11 of the Act was not made in the return of income. The assessee had claimed deduction u/s. 10(23C) of the Act in the return. As the Form 10B essential for claiming exemption u/s. 10(23) was not furnished, the CPC had rightly rejected the claim. Therefore, the adjustment as made by the CPC, while processing the return, cannot be faulted. The contention of the assessee that the issue was debatable has no substance. The matter was only factual in nature and the CPC had made the adjustment u/s. 10(23C) as the mandatory Form 10BB was not available. As no deduction u/s. 11 of the Act was claimed in the return, the CPC never had the opportunity to examine the admissibility or rejection of this claim. Exemption u/s. 11 of the Act claimed in the appellate proceedings before the Ld.JCIT(A) was not entertained - It is seen from the intimation u/s. 143(1) of the Act that Form 10B was filed along with the return of income. However, no exemption u/s. 11 of the Act was claimed rather the assessee had claimed exemption u/s. 10(23C)(iv) of the Act as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Addl./Joint Commissioner of Income-tax (Appeals)-8, Mumbai [ JCIT(A) in short] for Assessment Year (AY) 2022-23. 2. The assessee is a Charitable Trust and filed its return of income for AY 2022-23 on 17/10/2022 declaring total income of Rs. 1,48,175/-. The said return was processed by CPC Bengaluru u/s. 143(1) of the Act on 03/03/2023 and income was determined at Rs. 13,64,912/-. This was due to denial of exemption u/s. 10(23C) of the Act by the CPC. The assessee had filed an appeal against the intimation u/s. 143(1) of the Act, which has been decided vide the impugned order and the appeal of the assessee was dismissed. The assessee is in second appeal before us and the following grounds have been taken in this appeal: 1. The Ld. CIT(A) has erred in law and on facts of the case in confirming the order passed u/s. 143(1) of the Act in spite of the fact that the issue before both the lower authorities was debatable and not any mistake apparent on record or information. Hence, both the lower authorities erred in exceeding the jurisdiction in making an adjustment u/s. 143(1)(a) of the Act. 2. The Ld. CIT(A) has erred in law and on facts of the case in not granting exemption of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nial of the genuine claim of exemption u/s. 11 of the Act, was not justified. 3.1. Though the appeal was filed against the additions made u/s. 143(1) of the Act while processing the return, the main grievance of the assessee is that the additional claim of deduction u/s. 11 of the Act made before the Ld.JCIT(A) was not entertained, who while rejecting the claim had directed the assessee to avail the remedy u/s. 119 of the Act. According to the Ld.AR, the remedy u/s. 119 of the Act was merely an additional remedy and this did not affect the power of the appellate authorities in entertaining the additional claim for deduction u/s. 11 of the Act as made before the Ld.JCIT(A). In this regard, reliance was placed on the decision(s) of Hon ble Gujarat High Court in the case of Association of India Panelboard Manufacturer vs. DCIT reported at (2023) 157 taxmann.com 550 (Guj) and in the case of the PCIT vs. UTI Bank reported at 398 ITR 514 (Guj). He further submitted that Assessing Officer was duty bound to determine the correct income of the assessee, as held in the case of S.R. Koshti vs. CIT reported at (2005) 276 ITR 165 (Guj). 4. The Ld.DR, on the other hand, submitted that no claim f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities. 1. The Board may from time to time... 2. Without prejudice to the generality of the foregoing power,- (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class, by general or special order, authorize (any income tax authority, not being a [ *** ] Commissioner(Appeals) to admit an application or claim for any exemption, deduction, refund, or any other relief under this Act after expiry of the period specified by or under this Act for making such application or claim and deal with the some on merits in accordance with law. From the above, it is clear that the first appellate authorities have not been entrusted with powers of condoning delay in such cases. The intention of legislature with respect to such cases is very clear that the remedy in such situation lies in the section 119 of the Act. (c) For making the claim of exemption u/s 11, the appellant was either required to file the Revised return or if time for revision is not available, make a claim before the competent authority (Pr. CIT) for condonation of delay. In the instant case it appears that the appellant has neither revised the return nor made any ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption while processing the return u/s. 143(1) of the Act for the reason that Audit Report was not filed along with the return of income. It was on consideration of these facts, that the Hon ble Gujarat High Court had held that the assessee was eligible for deduction and entitled to exemption u/s. 11 of the Act as the Audit Report was available with the Assessing Officer when he processed the return u/s. 143(1) of the Act and requirement of law was satisfied. Thus, the facts of that case are found to be totally different from the facts of the present case. In the present case, no exemption u/s 11 of the Act was claimed in the return of income rather deduction was claimed u/s 10(23C)(iv) in the return. The audit report in Form 10B is a common audit report for deduction u/s 10(23C) and for section 12A of the Act. Hence, Form 10B was not a conclusive proof for deduction u/s 11 of the Act. Therefore, the decision of Hon ble Jurisdictional High Court cannot be imported to the facts of the present case. Further, the Hon ble Court had observed that section u/s 119(2)(b) was only an additional remedy for the assesse which cannot be compulsorily resorted by the assesse. The assesse was all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned earlier, the Ld.JCIT(A) did not allow the claim of the assessee and advised to avail the remedy u/s. 119 of the Act. 5.6 As already mentioned earlier, it is not clear from the intimation as to why the adjustment of Rs. 12,16,737/- was made while processing the return u/s. 143(1) of the Act. The exact reason for disallowing the claim of the assessee has also not been mentioned in the intimation. The audit report in Form 10B is a common audit report for deduction u/s 10(23C) and for section 12A of the Act, which entitles for deduction u/s 11 of the Act. Therefore, the CPC may have made a query as to under which section the deduction was claimed before disallowing the claim of the assessee. The Revenue is, therefore, directed to intimate the exact reason for disallowing the claim of the assessee while processing the return. Thereafter, the assessee may file an application u/s. 154 of the Act to rectify the mistake in the intimation, as deemed proper. The assesse is also free to avail the remedy u/s. 119 of the Act, if he so desires. 5.7. The other ground taken by the assessee regarding breach of principle of natural justice is found infructuous as the Ld.JCIT(A) had allowed pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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