Case Law Details
Conference of Religious India Vs Ward Exemption (ITAT Delhi)
ITAT Delhi held that benefit of exemption u/s. 11 of the Income Tax Act duly available as the income tax return was filed within the specified time limit of sub-section 139 of the Income Tax Act.
Facts-
The assessee is a charitable institution registered u/s. 12A of the Income Tax Act,1961 and is claiming exemption u/s. 11 of the Act. The assessee filed its return of income for the year under consideration on 23.02.2021 claiming by benefits u/s 11 of the Act. The return was accompanied by the audit report in form No.10B. Form No.10 was also filed before the due date of filing of return of income showing an accumulation of income of Rs.34 lacs.
The return was processed u/s. 143 (1) of the Act but the benefit of section 11 was not allowed and gross receipts of Rs.8559512/- have been taxed.
The assessee challenged the order before the CIT(A). It was brought to the notice of the CIT(A) that the return of income was filed on 23.02.2021 and the due date as extended was 15.02.2021.
The contention of the assessee was dismissed by the CIT(A) who was of the firm belief that the return has been filed beyond the due date as mandated in section 139 (1) of the Act. The CIT(A) also dismissed the claim of the assessee that it is squarely covered by the CBDT instruction and CIT(A) accordingly dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion-
In my considered opinion the language of Circular No.06/2020 is very clear and unambiguous in so far as the return of income filed u/s. 139 of the Act is concerned. I am of the considered view that if the return is filed within the specified time limit of sub-section 139 would be eligible for the benefit given by the CBDT circular and should avail the benefit of exemption u/s. 11 of the Act. In my considered opinion the CIT(A) erred in misinterpreting the aforementioned circular and, therefore, to that extent the order of the CIT(A) is erroneous and deserves to be set aside if the grievance of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is preferred against the order of the CIT(A), National Faceless Centre, (NFAC) dated 17.08.2022 pertaining to A.Y. 2020-21.
2. The grievance of the assessee read as under :-
1. The Ld. AO as well as CIT(A) has erred in law and on facts in upholding the adjustment made in the intimation u/s 143(1) not allowing the benefit of accumulation u/s 11(2) of the Income Tax Act, 1961. The intimation issued u/s 143(1) (rectified u/s154) raising a demand of Rs.9,5y£301- is wrong and bad in law in so far as it is beyond the jurisdiction of adjustment u/s 143(1) of the Act.
2. The CIT(A) has erred in law and on facts in not applying the circular of CBDT instructing the department to allow the benefit u/s 11 if return is filed within the time allowed u/s 139 of the ,Act. The assessee has filed ITR on 23.02.2021 before 31.03.2021 within the time allowed u/s 139 of the Act. The assesse contends that the circular are binding on the department and should have been followed.
3. The assessee contends that the powers of CIT(A) are co-terminus with that of the AO, he can do what the AO has not done or could not do. Thus the CIT(A) should have granted relief u/s 11 by following the beneficial circular of the CBDT.
4. The CIT(A) has erred in not condoning the delay in filing of return of income, by 7 days, following the Hon’ble Supreme Court decision on limitation, issued from time to time for taking lenient view during Covid 19 pandemic. The appellants pray that the delay may kindly be condoned and the benefit of sec. 11 may kindly be allowed.
5. The CIT(A) as well as AO has erred in law and on facts in not allowing accumulation of income amounting to Rs.34,00,000/- made under section 11(2) of the Act without considering the fact that Form No.10 as well as Form 10B was filed on 22.12.2020 before the due date of filing of return of income u/s 139(1) and return was filed u/s 139 i.e. before 31.03.2021, thus fulfilling was filed u/s 139 i e. before 31.03 2021, thus fulfilling the conditions for allowing the accumulation u/s 11(2) of the Act.
6. The total income computed is wrong and bad in law. The interest levied u/s 234A, 234B and 234C should be deleted.
7. The appellant prays that till the appeal is decided an interim relief may be provided by staying the demand.
8. The above grounds are without prejudice to one another.
9. The appellant may be allowed to add, amend, forgo or alter any of the above ground at the time of hearing
3. Briefly stated the facts of the case are that the assessee is a charitable institution registered u/s. 12A of the Act and is claiming exemption u/s. 11 of the Act. The assessee filed its return of income for the year under consideration on 23.02.2021 claiming the benefits u/s 11 of the Act. The return was accompanied with the audit report in form No.10B. Form No.10 was also filed before the due date of filing of return of income showing accumulation of income of Rs.34 lacs.
4. The return was processed u/s. 143 (1) of the Act but the benefit of section 11 was not allowed and gross receipts of Rs.8559512/- has been taxed.
5. The assessee challenged the order before the CIT(A). It was brought to the notice of the CIT(A) that the return of income was filed on 23.02.2021 and the due date as extended was 15.02.2021.
6. The assessee claimed that the return was filed before 31.03.2021 which is the time allowed u/s. 139 of the Act. It was also brought to the notice of the CIT(A) that the assessee has filed audit report in Form No.10B on 19.12.2020 and form No. 10 on 22.12.2020.
7. Strong reliance was placed on the instruction of CBDT F. No.173/193/2019 –ITA –I dated 23.04.2019 wherein the CBDT has clarified with regard to the time allowed for filing of the return of income subsequent to the insertion of clause (ba) in sub section 1 of section12A of the IT Act which includes the IT return filed within the time allowed u/s. 139 of the Act. The contention of the assessee were dismissed by the CIT(A) who was of the firm belief that return has been filed beyond due date as mandated in section 139 (1) of the Act. The CIT(A) also dismissed the claim of the assessee that it is squarely covered by the CBDT instruction (supra) and the CIT(A) accordingly dismissed the appeal of the assessee.
8. Before me the Counsel reiterated what has been stated before the lower authorities and once again relied upon the CBDT circular (supra). The DR strongly supported the findings of the CIT(A).
9. I have given a thoughtful consideration to the orders of the authorities below. The undisputed facts are that the assessee filed its return of income on 23.02.2021. It is also not in dispute that the due date for this assessment year has been extended till 15.02.021. This means that there was a delay of 7 days but considering the pandemic period and the decision of the Hon’ble Supreme Court by which the Hon’ble Supreme Court has extended the period of limitation across board, I am of the opinion that the delay of 7 days deserves to be condoned. In any case the return was filed before 31.03.2021 which is the last date for filing a belated return of income. It would be pertinent to refer to the above CBDT Circular which is as under :-
10. In my considered opinion the language of the aforementioned Circular is very clear and unambiguous in so far as the return of income filed u/s. 139 of the Act is concerned. Section 139 has several sub sections (1), (2), (3), (4), (4a), (5). I am of the considered view that if the return is filed within the specified time limit of sub section of 139 would be eligible for the benefit given by the above mentioned CBDT circular and should avail the benefit of exemption u/s. 11 of the Act. In my considered opinion the CIT(A) erred in misinterpreting the aforementioned circular and, therefore, to that extent the order of the CIT(A) is erroneous and deserves to be set aside the grievance of the assessee is allowed.
11. The second substantive grievance of the assessee is that the delay has not been condoned inspite of CBDT circular No.06/2020 dated 19.02.2020. The above said circular is as under :-
12. In the light of the mandate of the CBDT in the aforementioned circular I direct the CIT(A) exemption to consider the return of the assessee and allow the benefit as per the provisions of the law.
13. In the result, the appeal of the assessee is allowed in part for statistical purpose.
Order pronounced in the open court on 13.10.2022.
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