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TMI Blog2024 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing twin conditions are Mandatory, firstly, furnishing a declaration to the assessing officer in writing that the provisions of Section 10B (8) are applicable to him; and secondly, the said declaration has been furnished on before the due date of filing the return of income under sub-section (1) of Section 139 of the IT Act. The Hon ble Supreme Court observed that the wording of the Section 10B (8) is very clear and unambiguous, therefore the audit report prescribed in form 10CCB of the Income-tax Rules, 1962 must be furnished before the due date of filing the return of income under sub-section (1) of section 139. Thus, in view of the decision of Hon ble Supreme Court, it is mandatory for the assessee to file the prescribed form No. 10 along with the return of income filed for the relevant year. The assessee has filed a copy of the grievance petition, which was filed on Income-tax Portal on 21.03.2022 where he has submitted that assessee could not file the form due to technical glitches on the portal of the Income-tax Department. Thus it is evident that delay is within the period of 365 days and the assessee was prevented by sufficient and reasonable cause in filing the Form No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act, 1961, when the issue is debatable. 2. Briefly stated, facts of the case are that the assessee is a trust registered under the Provisions of the Income-tax Act and is engaged in providing education, medical relief and relief to the poor etc. The assessee, for the first time accumulated its income and claimed exemption u/s 11(2) of the Income-tax Act, 1961 (in short the Act ). The assessee filed return of income on 14.03.2022 declaring Nil income as against the due date prescribed on 15.03.2022. Further, the assessee filed audit report u/s 12A of the Act and prescribed Form No. 10B on 15.02.2022 (on the due date). Further, the assessee was required to file Form No. 10, which is a statement to be furnished to the Assessing Officer for claiming exemption u/s 11(2) of the Act. However, the assessee submitted due to technical problem on the Income-tax Portal, the said form was filed belittling on 09.02.2023 as against the due date on 15.03.2022. The return of income filed by the assessee was processed u/s 143(1) of the Act on 25.11.2022 wherein the claim of exemption u/s 11(2) of the Act amounting to Rs. 51,21,991/- was disallowed and corresponding adjustment was made in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccumulated 36 or set apart is invested or deposited in the forms or modes specified in sub-section (5); (c) the statement referred to in clause (a) is furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year: ***************************************** 4.1 Thus, one of the conditions for getting benefit of section 11(2) is that an assessee is required to furnish a statement in the prescribed form No. 10, on the due date specified for filing return of income. In the instant, the due date for filing the prescribed form No. 10 was 15th of March, 2022, but the assessee filed said form on 09/01/2023 on the income tax Portal. It is submitted by the assessee the delay was due to technical glitches on the income tax Portal, for which the assessee had filed grievances on 31/03/2022, for which no proper solution was provided. Before us, the assessee has filed a copy of acknowledgement for such grievance filed on Income-tax Portal. Before us, the learned counsel for the assessee has referred to various decisions, which were cited before the Ld. CIT(A) and submitted that requirement to prescribe the time limit fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10B (8) of the IT Act, furnishing the declaration to the assessing officer is mandatory but furnishing the same before the due date of filing the original return of income is directory. In the present case, when the assessee submitted its original return of income under section 139(1) of the IT Act on 31-10-2001, which was the due date for filing of the original return of income, the assessee specifically and clearly stated that it is a company and is a 100% export-oriented unit and entitled to claim exemption under section 10B of the IT Act and therefore no loss is being carried forward. Along with the original return filed on 31-10-2001, the assessee also annexed a note to the computation of income clearly stating as above. However, thereafter the assessee filed the revised return of income under section 139(5) of the IT Act on 23-122002 and filed a declaration under section 10B (8) which admittedly was after the due date of filing of the original return under section 139(1), i.e., 31-10-2001. 7. It is the case on behalf of the Revenue that as there was a noncompliance of twin conditions under section 10B (8) of the IT Act, namely, the declaration under section 10B (8) was not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 139 are same/similar. It cannot be disputed that in a taxing statute the provisions are to be read as they are and they are to be literally construed, more particularly in a case of exemption sought by an assessee. 9. In such a situation, filing a revised return under section 139(5) of the IT Act claiming carrying forward of losses subsequently would not help the assessee. In the present case, the assessee filed its original return under section 139(1) and not under section 139(3). Therefore, the Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under section 139(1) and cannot transform it into a return under section 139(3), in order to avail the benefit of carrying forward or set-off of any loss under section 80 of the IT Act. The assessee can file a revised return in a case where there is an omission or a wrong statement. But a revised return of income, under section 139(5) cannot be filed, to withdraw the claim and subsequently claiming the carried forward or set-off of any loss. Filing a revised return under section 139(5) of the IT Act and taking a contrary stand and/or claiming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming an additional depreciation under section 32(1) (ii-a) of the Act. As per the settled position of law, an assessee claiming exemption has to strictly and literally comply with the exemption provisions. Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VIA of the Act operate in different realms and principles of Chapter III, which deals with incomes which do not form a part of total income , cannot be equated with mechanism provided for deductions in Chapter VIA, which deals with deductions to be made in computing total income . Therefore, none of the decisions which are relied upon on behalf of the assessee on interpretation of Chapter VIA shall be applicable while considering the claim under section 10B(8) of the IT Act. 12. Even the submission on behalf of the assessee that the assessee had a substantive statutory right under section 10B(8) to opt out of section 10B which cannot be nullified by construing the purely procedural time requirement regarding the filing of the declaration under section 10B(8) as being mandatory also has no substance. As observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4 However, we noticed that the CBDT issued 3 circulars No. 15, 16 No. 17 on 19th July 2020, whereby it authorized the Commissioners of Income-tax to admit applications for condonation of delay in filing Form 9A, Form 10, Form No. 10B 10BB for AY 2018-19 or for any subsequent Assessment Years, where there is the delay of up to 365 days and decide on merits after considering reasonable cause for delay. The relevant circular in relation to form No. 10 is reproduced as under: Circular No. 17/2022 F.No.197/89/2022-IT A-I Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi the 17th July, 2022 Sub: Condonation of delay under Section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 9A and Form No. 10 for Assessment Year 2018- 19 and subsequent years- Reg. In exercise of the powers conferred under section 11 9(2) of the Income-tax Act, 1961 (hereinafter referred to as 'Act'), the Central Board of Direct Taxes (CBDT) by Circular No. 3/ 2020 [F.No .1 97 / 55 / 20 18-ITA-I] dated 03.01.2020 authorized the Commissioners of Income-tax to admit applications of condonation of delay in filing Form No. 9A and Form No. 10 for A Y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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