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TMI Blog2024 (6) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... the said specified date, therefore, it s case would clearly fall beyond the scope and gamut of Para 4(i) of the CBDT Circular No. 10 dated 22.05.2019. On the basis of the aforesaid facts, the case of the assessee society before me would not fall within the meaning of Para 4(i) of the CBDT Circular (supra.). As the assessee s case with respect to condonation of delay in filing of Form 10B would not be covered by Para 4(i) (supra), therefore, the same would fall within the sweep of Para 4(ii) of the CBDT Circular No.10 (supra), which, as observed by me hereinabove, would be applicable to all other cases prior to A.Y.2018-19 where Form 10B is belatedly filed. Accordingly, I am of the considered view that the case of the assessee due to non-satisfaction of the conditions contemplated in Para 4(i) of CBDT Circular No. 10 would fall within the sweep of Para 4(ii) of the said circular (supra.). As the assessee-society does not cumulatively satisfy the set of conditions specified in Para 4(i) of the CBDT Circular No.10 and also had not filed any application for condonation of delay u/s.119(2)(b) of the Act as provided in Para 4(ii) of the said circular therefore, there remains no occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2016-17. The assessee society has assailed the impugned order on the following grounds of appeal: 1. On the facts and circumstances of the case as well as law, the ld. CIT(A) has erred in confirming the addition of Rs.2,32,649/- of surplus over expenditure, stating that Form No.10B not filed. 2. On the facts and circumstances of the case as well as law, the ld. CIT(A) has erred in confirming the addition of Rs.6,00,000 on account of unverified payment of salary. 3. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing. 2. Succinctly stated, the assessee trust is a charitable society registered u/s.12A of the Act with the CIT(Exemption), Raipur. The registration granted to the assessee society vide order dated 20.04.2005 is effective from 01.04.2005. 3. The assessee society had e-filed its return of income u/s.139(1) of the Act for A.Y.2016-17 on 10.10.2016, declaring nil income (after claiming exemption u/s.11 of the Act). Subsequently, the case of the assessee society was selected for scrutiny assessment u/s. 143(2) of the Act. 4. The A.O while framing assessment declined the assessee s claim for exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) shall not be initiated for furnishing of inaccurate particulars and concealment of income. No submission is offered by the AR. Hence, e surplus shown at Rs.2,32,649/- is added back to the returned income of assessee . Further, as the assessee society in the course of the assessment proceedings had failed to substantiate its claim for deduction of salary expenditure of Rs.6 lacs, the A.O. made an addition of the same u/s. 13(2)(c) r.w. Sec. 13(3) of the Act. 5. On appeal, the CIT(Appeals) did not find favour with the contentions advanced by the assessee. It was observed by the CIT(Appeals) that the assessee society had filed Form 10B r.w.r. 12(2) of the Income Tax Rules, 1962 on 06.12.2018 i.e. much after the due date for filing of its return of income u/s.139 of the Act. Also, the CIT(Appeals) observed that the assessee had failed to approach the jurisdictional commissioner/Director of Income tax to get the delay involved in filing of Form 10B condoned. Also, the CIT(Appeals) upheld the disallowance made by the A.O of the unsubstantiated claim for deduction of salary expenses of Rs.6 lacs that was raised by the assessee society. Accordingly, the CIT(Appeals) on the basis of his a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AR in order to support his aforesaid contention had relied upon the judgement of the Hon ble High Court of Madras in the case of Chandraprabhuji Maharaj Jain Vs. Deputy Commissioner of Income Tax (Exemption), Chennai (2019) 110 taxmann.com 11 (Madras) and order of the ITAT, Ahmedabad C Bench, in the case of Shree Charitable Trust Vs. ITO (Exemption), ITA No.172/Ahd/2022 dated 05.07.2023. 9. Apropos the disallowance of the assessee s claim for deduction of salary expenditure of Rs.6 lacs, the Ld. AR submitted that the same was the salary paid to Dr. Ashish Dubey towards consultancy/professional services that were rendered by him in the assessee s hospital. On being queried as to why no supporting documentary evidence substantiating authenticity of the aforesaid claim of salary expenditure was filed in the course of the proceedings before the lower authorities, the Ld. AR rebutted the observations recorded by the A.O in the assessment order to the said effect. It was submitted by the Ld. AR that complete details of the salary paid to Dr. Ashish Dubey a/w. nature of services that were rendered by him were furnished by the assessee vide his reply dated 25.11.2018 in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income of a trust or institution as computed under the Act without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have to be audited by an accountant as defined in the Explanation below subsection (2) of section 288 and the person in receipt of the income is required to furnish along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. 2. As per Rule 17B of the Income-tax Rules, 1962 (hereafter Rules ) the audit report of the accounts of such a trust or institution is to be furnished in Form No. 10B. As per Rule 12(2) of the Rules, such audit report is to be furnished electronically. The failure to furnish such report in the prescribed form along with the return of income results in disentitlement of the trust from claiming exemption under sections 11 and 12 of the Act. 3. Representations have been received by the Board/field authorities stating that Form No. 10B could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be filed before the date specified u/s.139 of the Act is not found to be satisfied. I, say so, for the reason that the date specified u/s.139 of the Act in the case of the assessee society for filing of its return of income for the year under consideration, i.e., A.Y.2016-17 was 17.10.2016 (as was extended from 30.09.2016). 12. As the date specified u/s. 139 of the Act for filing of return of income in the case of the assessee society before me for A.Y.2016-17 was 17.10.2016 (supra), while for it had e-filed/uploaded the audit report in Form 10B on 06.12.2018, which is much beyond the said specified date, therefore, it s case would clearly fall beyond the scope and gamut of Para 4(i) of the CBDT Circular No. 10 dated 22.05.2019. On the basis of the aforesaid facts, I am of the considered view that the case of the assessee society before me would not fall within the meaning of Para 4(i) of the CBDT Circular (supra.). 13. As the assessee s case with respect to condonation of delay in filing of Form 10B would not be covered by Para 4(i) (supra), therefore, the same would fall within the sweep of Para 4(ii) of the CBDT Circular No.10 (supra), which, as observed by me hereinabove, would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions provided in Para 4(i) (supra) is to approach the CIT(Appeals) for condoning the delay u/s. 119(2)(b) of the Act subject to there being reasonable cause for not having filed the application within the stipulated time. Also, on the similar footing, as the assessee society had failed to cumulatively satisfy the said conditions provided in Para 4(i) (supra), therefore, the order of ITAT, Ahmedabad C Bench in the case Shree Charitable Trust Vs. ITO (Exemption) (supra) would not carry its case any further. Thus, the Ground of appeal No.1 raised by the assessee society is dismissed in terms of the aforesaid observations. 16. I shall now deal with the grievance of the assessee society that both the lower authorities had erred in declining/sustaining the disallowance of the assessee s claim for salary expenditure of Rs.6 lacs. As is discernible from the records, the assessee had claimed to have paid a salary of Rs.6 lacs to Dr. Ashish Dubey, cardiologist (trustee of the assessee society). As the assessee society had failed to place on record documentary evidence to substantiate the authenticity of its claim of salary expenditure, therefore, the A.O had disallowed the aforesaid expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry expenditure of Rs.6 lacs. 18. Be that as it may, I am of the view that though the assessee society had not placed on record supporting documentary evidence to substantiate the authenticity of its claim of salary expenditure of Rs.6 lacs paid to Dr. Ashish Dubey, but at the same time I cannot remain oblivion of the fact that the A.O had not called upon the assessee society to furnish any specific details with respect to its aforesaid claim of expenditure. In my considered view the matter in all fairness requires to be restored to the file of the A.O who is directed to verify the authenticity of the aforesaid claim of the assessee society. Needless to say, the A.O shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee society which shall remain at liberty to substantiate its claim on the basis of fresh documentary evidence, if any. Thus, the Ground of appeal No.2 raised by the assessee society is allowed for statistical purposes in terms of the aforesaid observations. 19. Ground of appeal No.3 being general in nature is dismissed as not pressed. 20. In the result, appeal of the assessee is partly allowed for statistical purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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