Onkar Society for Engineering & Technological Research Vs ITO (ITAT Kolkata)
The assessee appealed against the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2020-21, challenging the denial of exemption under Section 11 of the Income-tax Act. The assessee contended that the capital expenditure of ₹1,85,37,546, revenue expenditure of ₹4,68,18,969, and the statutory exemption of ₹91,79,434 under Section 11(1)(a) were wrongly disallowed on the ground that the return of income and Form 10B were allegedly not filed within time. The assessee also argued that its income should be computed on commercial principles and that the delay, if any, resulted from a fire in its office and disruptions caused by the COVID-19 pandemic.
Additional Ground on Section 143(1) Adjustment
The assessee raised an additional legal ground before the Tribunal, contending that the Centralised Processing Centre (CPC) made adjustments under Section 143(1) without issuing the mandatory prior intimation required under the first proviso to Section 143(1)(a). The assessee submitted that this was a pure question of law requiring no further investigation of facts and relied upon judicial precedents permitting such legal grounds to be raised before the Tribunal.
Background Facts
The assessee, a society registered under Section 12AA and engaged in running educational institutions, filed its return in Form ITR-7 on 31.03.2021 declaring nil income and filed Form 10B on 31.03.2021. The extended due date for filing the return was 15.02.2021. The CPC processed the return under Section 143(1), computed the total income at ₹6,11,96,227 by denying exemption under Section 11 amounting to ₹7,45,35,949, and also recorded that Form 10B had not been filed, although the assessee asserted that it had been filed on 30.03.2021. The assessee explained that a fire in its office destroyed records and that the COVID-19 pandemic delayed finalisation of accounts and filing compliance.
