Political party required to furnish return within due date u/s 139 for claiming exemption u/s. 13A: ITAT Delhi

ITAT Delhi held that in order to claim exemption under Section 13A of the Income Tax Act by the political party it is necessary to furnish return of income by the ‘due date’ as per Section 139 of the Income Tax Act.

Facts- The Applicant is a Political Party registered u/s. 29A of the Representation of the People Act, 1951. AO completed an assessment u/s. 143(3) of the Income-tax Act, 1961 at an income of Rs.1,99,15,26,560/-, as against Nil income declared by the assessee. The difference between the returned and assessed income is solely for the reason that assessee’s claim for exemption u/s. 13A of the Act has been denied by AO, and, accordingly, the entire income of Rs.1,99,15,26,560/- has been held to be taxable. AO has faulted the claim of exemption u/s. 13A of the Act on two grounds viz., that the return of income filed by the assessee on 2^nd February, 2019 u/s. 139(4) of the Act contravenes the time limit prescribed in the third Proviso to Section 13A of the Act; and, that clause (d) of the first Proviso to Section 13A of the Act has been violated since the assessee has received donations of Rs.14,49,000/- in cash from various persons, each donation being in excess of Rs.2,000/-.

Conclusion- Held that in order to claim exemption under Section 13A of the Act, it is necessary to furnish return of income by the ‘due date’ as per Section 139

It is incongruent for a Political Party to canvass that inspite of accepting Donations in cash exceeding Rupees two thousand each, clause (d) is not violated merely because it has maintained the details as per clause (b) of the first Proviso. Each of the conditions laid down in clauses (a), (b), (c) and (d) of the first Proviso are to be mandatorily complied with in order to claim exemption under Section 13A of the Act.

Held that the income tax authorities have not made any error in denying the exemption claimed by the assessee under Section 13A of the Act due to violation of clause (d) of the first Proviso as well as third Proviso to Section 13A of the Act. Consequently, in our view, the Applicant has been unable to make out a strong prima facie case against the interpretation of Section 13A of the Act as adopted by the Revenue to deny the exemption, so far it is relevant for the purposes of examining the merits of the present Application.