Ammini Foundation Vs DCIT (ITAT Cochin)
In a ruling with implications for charitable trusts and institutions, the Income Tax Appellate Tribunal (ITAT), Cochin bench, has held that the Centralized Processing Centre (CPC) is not justified in automatically denying exemption under Section 11 of the Income Tax Act, 1961, solely on the ground of delayed filing of the audit report in Form 10B during the centralised processing of income tax returns under Section 143(1)(a).
The tribunal’s decision came in the case of Ammini Foundation, a charitable trust registered under Section 12AA of the Act, which operates an Engineering College in Kerala. The trust had filed its income tax return for Assessment Year 2017-18 within the due date prescribed under Section 139(1), claiming exemption under Section 11 for income applied towards charitable purposes, amounting to Rs. 7,19,24,640.
However, the CPC in Bangalore, while processing the return electronically under Section 143(1)(a), denied the claimed exemption in its intimation dated March 9, 2019. The reason for the denial, as submitted by the assessee, was the non-filing of the audit report in Form 10B along with the return of income. The assessee subsequently filed the audit report on June 29, 2020, well after the return submission and the processing by the CPC.
