Pachiyamman Ethirajammal Rajam Mudaliyandan Educational Trust Vs ITO (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT) Chennai has set aside the assessment order denying tax exemption to Pachiyamman Ethirajammal Rajam Mudaliyandan Educational Trust due to a delay in filing Form 10BB. The case involved a charitable trust running educational institutions, which had filed its income tax return for AY 2017-18, claiming exemption under Section 10(23C)(vi) of the Income Tax Act. However, the assessing officer rejected the exemption, citing the late submission of Form 10BB on December 4, 2019, instead of along with the tax return. The trust had applied for condonation of delay with the Commissioner of Income Tax (Exemptions) [CIT(E)], but the application remained undecided.
The CIT(A) upheld the assessment, agreeing that the exemption could not be granted as Form 10BB was not filed within the prescribed time. The trust argued before ITAT that the exemption should not be denied solely due to a procedural delay, especially when the form was available during assessment. The tribunal referred to CBDT Circulars 19/2020 and 6/2021, which mandate disposing of condonation applications within three months. Since the CIT(E) had not ruled on the condonation request, the ITAT held that the assessment could not be finalized without considering its outcome.
