Institute of Driving & Traffic Research Vs ITO (ITAT Delhi)
In a significant ruling by the Income Tax Appellate Tribunal (ITAT), Delhi, the court sided with the Institute of Driving & Traffic Research (IDTR) against the Income Tax Officer (ITO), reprimanding the lower authority for its “blatant violation” of a previous Tribunal order. The case centered on a procedural dispute over the filing of a crucial tax form, Form No. 10, which the assessee submitted manually instead of electronically. The final order by the ITAT deleted a disallowance of ₹25,50,000 and directed the tax authorities to accept the assessee’s claim.
The dispute arose during the Assessment Year 2016-17. The IDTR, a society registered under Sections 12A and 80G of the Income Tax Act, 1961, transferred ₹25,50,000 to a utilization fund as per Section 11(2) of the Act. For this transfer to be considered a deemed application of income, the assessee was required to file Form No. 10. While the form was filed on time before the due date for the return, it was submitted manually, not electronically as mandated from April 1, 2016. The Assessing Officer (AO) seized on this procedural lapse, passing an assessment order on December 7, 2018, that denied the deemed application of income and added the entire ₹25,50,000 to the assessee’s taxable income.
