Case Law Details
Barapur Gramodyog Vikas Samiti Vs ITO (ITAT Delhi)
The AO while completing the assessment noticed that the assessee claimed exemption u/s 10(23B) of the Act as the assessee was engaged in the business of production, sale, etc. of Khadi and Products of Village Industries. The AO was of the view that in view of proviso to section 10(23B) of the Act Khadi and Village Industries Commission has to grant the approval for not more than three assessment years beginning with the assessment year next following the financial year in which exemption was granted. Therefore, AO was of the opinion that in the present case approval was granted for more than three assessment years and the condition for claiming exemption u/s 10(23B) was not fulfilled and accordingly, he denied the exemption claimed by the assessee u/s 10(23B) of the Act.
ITAT observed that certificate issued by Khadi & Village Industries Commission clearly show that it relates to the period from 11.06.2012 to 31.03.2016 and followed by the letter issued by the Commission to the ITO, Bijnore, Uttar Pradesh clearly shows that the assessee is entitled to claim exemption u/s 10(23B) of the Act. The reason for denying the exemption by the AO is that the Commission has given certificate to the assessee for more than three years. It is pertinent to note that the time period for which the certificate has to be granted is not within the control of the assessee. In any case it is only a technical violation for which the assessee could not be penalized by denying the exemption otherwise allowable to the assessee. Thus, I hold that the assessee is entitled for exemption u/s 10(23B) of the Act. Accordingly, the Assessing Officer is directed to allow the claim for exemption u/s 10(23B) as claimed by the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the Assessee against the order of the Ld. CIT(Appeals)-(NFAC), Delhi dated 16.09.2021 for the AY 201617. The assessee filed written submissions on 10.05.2022 as the Counsel for the assessee is admitted in hospital and he is unable to attend the hearing and, therefore, requested to decide the appeal on the basis of written submissions or adjourn the matter for two months. The appeal of the assessee is disposed off based on the written submission furnished by the assessee.
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