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TMI Blog2025 (3) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. The assessee is registered u/s 12A of the Act vide registration no. CIT/Dgp/12A/2013-14/1944-1946 dated 29.08.2013. The assessee submitted that form no.10B and claimed exemption u/s 11 of the Act accordingly. The assessee is engaged in imparting education. In the return filed by the assessee on 17.02.2017, no exemption was claimed on account of Amount accumulated or set apart for specified purposes' u/s 11(2) of the Act. 04. Assessee during the assessment proceedings submitted a revised computation on 11.01.2018, claiming therein the exemption u/s 11(2) of the Act to the tune of Rs. 3,78,41,876/-. The assessee also filed form no. 10 online on 29.08.2018, in respect of such accumulation. The assessee filed condonation petition for condoning the delay in filing the form no.10 on 15.11.2018. However, the same was dismissed by the ld. CIT(E) on 20.12.2018. Finally, the ld. AO assessed the income at Rs. 3,80,90,390/- by rejecting the claim of the assessee u/s 11(2) of the Act. 05. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by observing that section 13(9) of the Act was inserted by Finance Act, 2015, with effect from 01.04.2016, was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal no.655 of 2022 order dated 21.03.2023, Seth Chagan Mall Hira Lall Dugar Charitable Trust vs. Income-tax Officer, Exemption [2024] 168 taxmann.com 326 (Kolkata - Trib.)/[2025] 210 ITD 266 (Kolkata - Trib.)[16-10-2024]. 08. After hearing the rival contentions and perusing the materials available on record, we find that the return of income has been filed beyond the due date u/s 139(1) of the Act, however, it was filed well within the time allowed u/s 139(4) of the Act. We note that in the return filed u/s 139(1) of the Act, the assessee has not claimed exemption u/s 11(2) of the Act in respect of accumulations made, however during the course of assessment proceedings, a claim was lodged before the ld. AO by filing the revised consolidated computation of income. The assessee also filed the form no.10 for accumulation on 29.08.2018. Now the issue before us is whether the assessee is entitled to said exemption although the return as well as form no.10 has been filed belatedly. So far as the return of income filed on 17.02.2017is concerned, we are of the view that the same is filed within the time limit allowed u/s 139 of the Act which includes the return filed u/s 139(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3C) of section 10 of the Act will be available to the trusts where they furnish updated return of income. Accordingly, it is proposed to clarify that the exemption under section 11, 12 and sub-clause (iv)/(v)/(vi)/(via) of clause (23C) of section 10 of the Act will be available only if the return of income has been furnished within the time allowed under sub-section (1) or sub- section (4) of section 139 of the Act. d. Hence, it is proposed to, a) amend the twentieth proviso of clause (23C) section 10 of the Act to provide that the fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or subclause (via) shall furnish the return of income for the previousyear in accordance with the provisions of sub-section (4C) of section 139 of the Act, within the time allowed under sub-section (1) or sub-section (4) of that section. b) amend clause (ba) of sub-section (1) of section 12A of the Act to provide that the person in receipt of the income shall furnish the return of income for the previous year in accordance with the provisions of subsection (4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income tax. However, there is no clarity as to whether the said return of income is to be filed within time allowed under section 139 of the Act or otherwise. In order to provide clarity in this regard, it is proposed to further amend section 12A so as in provide for further-condition that the person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139 of the Act. These amendments are clarificatory in nature. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-19 and subsequent years." 3. Additionally, an excerpt of circular No. 2/2018 dated 15-2-2018 "Explanatory Notes to the Provisions of the Finance Act, 2017" on insertion of clause (ba) in Sub-section (1) of section 12A is quoted as under: "The entities registered under section 12AA are required to file return of income under sub-section (4A) of section 139 of the Income-tax Act, if the total income without giving effect to the provisions of sections 11 and 12 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee by holding and observing as under: - "4.3 The ld.AR argued that the CIT(A) failed to consider Circular No.2/2018 issued vide F.No.370142/15/2017-TPL dated 15.02.2018 explaining Finance Act, 2017 and the explanatory notes to the provisions of the Finance Act, 2017 and subsequent clarification issues by CBDT in F.No.173/193/2019-ITA-I dated 23.04.2019 with reference to time allowed for filing of return of income, subsequent to insertion of clause (ba) in sub-section 1 of section 12A of the Act. She produced the relevant copy of Circular No.2/2018, wherein the Explanatory notes to the provisions of Finance Act, 2017 was explained as under:- "15.4 Further, as per the provisions of said section, the entities registered under section 12AA are required to file return of income under sub-section (4A) of section139 of the Income-tax Act, if the total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. However, there was no clarity as to whether the said return of income was to be filed within time allowed under section 139 or otherwise. 15.5 In order to provide clarity in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the entities registered under section 12AA are required to file return of income under subsection (4A) of section 139, if the total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. However, there is no clarity as to whether the said return of income is to be filed within time allowed u/ s 139 of the Act or otherwise. In order to provide clarity in this regard, it is proposed to further amend section 12A so as to provide for further condition that the person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139 of the Act. These amendments are clarificatory in nature. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 201 8-19 and subsequent years." 3. Additionally, an excerpt of circular 02/2018 dated 15.02.2018 "Explanatory Notes to the Provisions of the Finance Act, 2017" on insertion of clause (ba) in Sub section (1) of section 12A is quoted as under: "the entities registered under section 12AA are required to file return of income under sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d stage but upon complying with the requirement of such provision, has to be treated as return of income. In the present case, the CBDT has already clarified vide F.No.173/193/2019- ITA-I dated 23.04.2019, which is reproduced above that the assessee is entitled for exemption u/s. 11 of the Act, if such return of income is filed within the time allowed u/s. 139 of the Act. It means that it covers all the provisions of section 139 of the Act and it is not limited to section 139(1) of the Act. Hence, we allow the appeal of assessee and direct the AO to allow exemption u/s. 11 of the Act in this case of the assessee. 6. In the result, the appeal filed by the assessee is allowed." 010. Therefore, we are inclined to hold that the return filed by the assessee is to be treated as filed within the time allowed u/s 139 of the Act, which includes the return filed u/s 139(1) as well as return of income filed u/s 139(4) of the Act. So far as the filing of form no.10 is concerned during the assessment proceedings on 29.08.2018, we are of the considered view that the late filing of the said form is a procedural delay on the part of the assessee and cannot be used as ground for denying the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be furnished under Clause (b) of section 12A, shall be in Form No.10B. 13. Now, on perusal of the Form 10B, we notice that the same is required to be submitted electronically, one month prior to the due date of the filing of return of income. Admittedly, in the case in hand, the audit report on form 10B has been uploaded on 30.03.2019 which is even after the date of filing the return of income on 15.11.2018. Now, before us, it has been contended by the ld. counsel for the assessee that filing of audit report is directory in nature and even if report is submitted in time before the conclusion of the assessment proceedings, the same needs to be considered. Though the assessee referred to the various decisions, we find it pertinent to refer to the judgment of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust v. ITO(Exemption) (supra) wherein Para 32 of the said judgment reads as follows: 32. We may also refer to the decision of this Court in CIT v. Gujarat Oil and Allied Industries Ltd. [1993] 201 ITR 325 (Gujarat), wherein it is held that the provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, though, it was not possible to entertain the audit report while processing the return u/s 143(1)(a) of the Act, but the ld. CIT(A) was well within its power to have entertained the said report and examined the same as could have been done by the A.O. Assessment year: 2018-19 Bangarh Educational Welfare Trust. 16. We, therefore, in the given facts and circumstances and respectfully following the judgment of Hon'ble Gujarat High Court in the case Sarvodaya Charitable Trust v. ITO(Exemption) (supra), we are of the considered view that since the case of assessee is for A.Y 2018-19 and CBDT came up with a circular dated 23.04.2019 specially for A.Y 2018-19 providing that return of income to be filed within the time allowed u/s 139 of the Act, the assessee has complied with the conditions provided in sub-clause (b) and (ba) to section 12 and there is no dispute at the end of the revenue authorities that the assessee is carrying on charitable activities, for which it has been granted registration u/s 12A of the Act, the benefit of section 11 and 12 should be given to the assessee and deductions claimed by the assessee are, therefore, allowed. Thus, Ground Nos.1 to 4 of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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