Evehans Academy Vs ITO (Exemptions) (ITAT Bangalore)
Addition for Non-Filing of Form 10 Deleted – ITAT Bangalore Holds Taxability Arises Only in Year of Default
The issue before the Tribunal was the disallowance of ₹80 lakh made u/s 11(2) for non-filing of Form 10 pertaining to AY 2013–14.
The AO held that since the Assessee had utilized the accumulated fund of ₹80 lakh in AY 2018–19 without furnishing Form 10 for the original year of accumulation (AY 2013–14), the claim of application was invalid, treating the amount as income for AY 2018–19. The CIT(A) upheld the addition on the same reasoning.
Before the Tribunal, the Assessee contended that even if Form 10 was not filed in AY 2013–14, the amount could only be taxed in that year & not in AY 2018–19 when it was actually utilized. The Department could not produce any evidence or legal precedent to counter this position.
The Tribunal observed that failure to furnish Form 10 results in loss of accumulation benefit only in the year of default, i.e., AY 2013–14, & not in the year of utilization. Since the alleged lapse related to AY 2013–14, the addition made in AY 2018–19 was unsustainable. It therefore directed deletion of ₹80 lakh from total income.
Held: Non-filing of Form 10 affects only the year of accumulation, not the year of utilization – addition of ₹80 lakh deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
