TMI Blog2023 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... intimation is required to be served on the assessee, either in writing or electronically, as contained in 1st proviso to section 143(1)(a) of the Act. Ld. Counsel has evidently demonstrated before us, the failure on the part of CPC to issue such prior intimation to the assessee before making an adjustment by way of disallowing the claim of exemption u/s. 11 of the Act. Thus, there are two aspects which emerges on this issue as to whether the disallowance made is a permissible adjustment contained in sec. 143(1)(a) and whether this adjustment, if permissible, has been made in compliance to 1st proviso to sec. 143(1)(a) of the Act. As perusal of the provisions contained in sec. 143(1)(a) of the Act, we find that on both the aspects, the revenue fails. This position has not been controverted by Ld. Sr. DR also In case, where there is no response received from the assessee then, within thirty days of the issue of such intimation, department is free to make such adjustment or disallowance. The documentary evidence placed on record and the e-proceedings downloaded from the Income Tax portal, no where suggests that such a process has been followed. Thus, we find that the impugned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of 15% of gross - Rs. 85,07,520/- Receipts u/s. 11(1)(a) 3.1. Since return of the assessee was a belated return in terms of provisions contained in Sec. 139(4A), Centralised Processing Centre of Income Tax, Bengaluru (CPC) while processing the return, made an adjustment by not allowing the claim of the assessee u/s. 11 towards application of income. CPC, Bengaluru computed the total income of the assessee at Rs. 5,67,16,797/- which is nothing but the total receipts of the assessee for the year under consideration. From the perusal of intimation u/s 143(1) dated 30.11.2021, in details relating to return, following facts are stated (i) Registration/approval details - 12A/12AA (ii) Forms - No forms filed (iii) ITR Form Type - ITR 7 original (iv) Date of filing - 31.03.2021 (v) Due date - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on claimed u/s. 11 has been rightly rejected. In addition to the oral arguments by Ld. Sr. DR, a written submission has also been placed on record by way of an e-mail dated 21.05.2023 sent to the Registry, wherein the oral arguments have been compiled. Copy of this e-mail was made available to the ld. Counsel of the assessee also. 5. Per contra, Ld. Counsel for the assessee submitted that CPC while processing the belated return of the assessee has accepted the revenue expenditure of Rs. 4,56,99,706/- and capital expenditure of Rs. 1,41,57,274/- as claimed by the assessee in its return, which is evident from pages 21 and 24 of the impugned intimation. He also stated that CPC has duly acknowledged the fact that assessee is a registered trust u/s. 12A of the Act. He further pointed out to the fact that Form 10B has been filed electronically on 30.03.2021 though the intimation u/s. 143(1) states that No form filed . 5.1. Ld. Counsel placed reliance on the instruction of CBDT vide File no. F. No. 173/193/2019-ITA-I dated 23.04.2019, wherein CBDT clarified with regard to the time allowed for filing of return of income subsequent to the insertion of clause (ba) in sub-section (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me or loss shall be computed after making the following adjustments, namely:- (i) Any arithmetical error in the return; (ii) An incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure [or increase in income] indicated the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under [section 10AA or under any of the provisions of Chapter VI-A under the heading C.-Deductions in respect of certain incomes , if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, wherein reference is made to sec. 139 in respect of filing of return for the purpose of claiming benefit of exemption u/s. 11 for trust registered u/s. 12AA of the Act. Clarification given by the CBDT instruction gets verified when we refer to the amendment brought in section 12(1)(ba) which now incorporates the time allowed in sub-section (1) or sub-section (4) of section 139 for the purpose of compliance of sub-section (4A) of the said section in respect of furnishing of return of income. 7.1. Assessee in the present case has filed a belated return u/s. 139(4) of the Act which the department has not held it to be a defective return u/s. 139(9) and has processed it by accepting the revenue and capital expenditure though denying the exemption claimed u/s. 11 and computed the total income equal to the total receipts of the assessee for the year. Once a return has been processed as a valid return, there are restrictions within section 143(1)(a) which lists down six specific adjustments which can be made in the processing of return. 7.2. Further, in respect of any adjustment which is proposed to be made, a prior intimation is required to be served on the assessee, either in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 24, in both the columns, the figures claimed by the assessee towards revenue and capital expenditure have been stated which evidently demonstrates that the same have been accepted in the processing of the return. 8.2. Since we have given our observations and findings by taking recourse to CBDT instruction extracted above, read with sect. 139(4) and sec. 12(1)(ba), we do not find any relevance to discuss and adjudicate on the applicability of Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 (TOLA), as contended by Ld. Sr. DR in respect of filing of return and Form 10B beyond the extended due date covered by TOLA. 8.3. Considering the above discussion, factual matrix, documentary evidence placed on record, CBDT Instruction and circulars and the applicable provisions of law, we are of the considered view to allow the grounds of Cross objection raised by the assessee and dismiss the grounds raised by the revenue in its appeal. Accordingly, Cross Objection by the assessee is allowed and the appeal of the revenue is dismissed. 9. In the result, appeal of the revenue is dismissed and Cross Objection o the assessee is allowed. Order pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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