Siddhanath Mahadev Temple Trust Vs CIT(Exemption) (ITAT Surat)
Conclusion: Clause (ba) of sub-section (1) of section 12A was applicable for AY.2018-19 onwards and not for AY.2017-18, assessee-temple trust was entitled to tax exemptions under Sections 11 and 12 . Hence, the order of AO was not erroneous and prejudicial to the interests of revenue and therefore, it was not amenable to revision u/s 263.
Held: Assessee had not filed its return of income u/s 139. It filed the return of income, declaring total income of Rs.10,27,436/-only after receiving notice u/s 148. AO had passed the order accepting the returned income of Rs.10,27,436/- after considering explanation and details filed by assessee. CIT(E) referred to provisions of section 139(4A), 12A(1)(b) and stated that assessee was liable to file return of income for AY.2017-18 and also to file audit report in the prescribed proforma. Therefore, assessee was not eligible for exemption u/s 11. However, AO had accepted the returned income shown in the return u/s 148. Therefore, the order was erroneous and prejudicial to the interests of revenue u/s 263. CIT(E) issued show cause notice requesting to assessee to submit explanation and clarification. In reply to the above notice, assessee filed written submission and relied upon decision of ITAT, Delhi in case of United Educational Society vs. JCIT, 107 taxmann.com 127 wherein it was held that return filed u/s 148 had to be treated as return u/s 139 which would include section 139(4A) and once such return was treated as return filed u/s 139, then all provisions of the Act would apply including section 11 of the Act. Tribunal also held that new clause (ba) of section 12A(1) had been inserted by Finance Act, 2017 w.e.f. 01.04.2018, so that furnishing of return within the time u/s 139(4A) had been made applicable from AY.2018-19. CIT(E) also held that the amendment was clarificatory in nature and the decision of the Delhi Tribunal was not binding in this case. Hence, CIT(E) held that the order passed by AO was erroneous and prejudicial to the interests of revenue u/s 263. He set aside the order of AO and directed him to decide issue of allowability of exemption u/s 11 of the Act afresh. It was held that AO had rightly accepted the return of the assessee field u/s 148. Clause (ba) to sub-section (1) of section 12A was inserted by Finance Act, 2017 w.e.f. 01.04.2018. The said clause provided that w.e.f. 01.04.2018, and applicable for AY.2018-19 and subsequent years, that the person in receipt of income should furnish the return of income referred to in sub-section (4A) of section 139 within the time allowed under that section. The assessment year involved in this appeal was AY.2017-18 which was prior to insertion of clause (ba) of section 12A(1) by Finance Act, 2017. When the provisions were not in the statute, AO could not have invoked the provision and asked assessee to fulfil the conditions included therein. Therefore, AO had taken the correct view while passing the order and he had adopted one of the courses permissible in law. Moreover, clause (ba) of sub-section (1) of section 12A was applicable for AY.2018-19 onwards and not for AY.2017-18 with which we are concerned. Hence, the order of AO was not erroneous and prejudicial to the interests of revenue and therefore, it was not amenable to revision u/s 263. ITAT had, accordingly, held that AO was not justified in denying the benefit of exemption u/s 11 of the Act and it directed to AO to compute income in accordance with provisions of section 11 of the Act.
