Ravi Rishi Educational Society Vs DCIT (ITAT Hyderabad)
The Income Tax Appellate Tribunal (ITAT), Hyderabad, decided four appeals filed by the assessee, an educational society registered as a charitable institution under Section 12AA. The appeals related to denial of exemption under Sections 11 and 12 for Assessment Years (AYs) 2019–20 and 2020–21, an order under Section 154 for AY 2020–21, and penalty under Section 271D for AY 2017–18.
For AYs 2019–20 and 2020–21, the assessee filed returns declaring nil income after claiming exemption. The returns were processed under Section 143(1), and exemption was denied due to non-filing of audit reports in Form 10B/10BB within the prescribed time. Consequently, the entire gross receipts were treated as taxable income. The Commissioner (Appeals) upheld this denial on the ground that the application for condonation of delay in filing the audit report had been rejected by the DGIT.
Before the Tribunal, the assessee contended that the entire receipts were applied towards charitable purposes and that even if exemption was denied, no taxable income would arise as there was no surplus. It further submitted that the delay in filing audit reports was due to search operations and the COVID-19 pandemic, and that the audit report was eventually filed during appellate proceedings.
