2022 (11) TMI 1494 - AT - Income Tax

Rectification u/s 154 - claim of exemption was made u/s. 10(23C)(vi) instead of section 10(23C)(iiiab) - HELD THAT - Admittedly it is undisputed that assessee had been imparting education and has been claiming exemption u/s. 10(23C)(iiiab) of the Act which has been considered and allowed in the preceding as well as in the subsequent assessment years vis- -vis the impugned year under consideration either in the intimation issued u/s. 143(1) of the Act or assessment completed u/s. 143(3) of the Act. It was an inadvertent mistake which occurred at the end of the assessee in the filing of return where the claim of exemption was made u/s. 10(23C)(vi) of the Act instead of section 10(23C)(iiiab) of the Act. It is also noted that upon receiving intimation u/s. 143(1) of the Act wherein the inadvertent claim made u/s. 10(23C)(vi) was disallowed and remedial measure was taken by the assessee by filing an application u/s. 154 for rectifying the mistake by making a claim under the correct section of sec. 10(23C)(iiiab) of the Act. We note that assessee had been consistently claiming exemption u/s. 10(23C)(iiiab) of the Act. Considering the ITAT Lucknow in the case of Desh Bharti public School Samiti 2022 (4) TMI 448 - ITAT LUCKNOW we note that mistake apparent from record is rectifiable under the provisions of section 154 of the Act which in the present case ought to have been allowed as claimed by the assessee. We set aside the finding of the Ld. CIT(A) and direct the Ld. AO to allow the claim of the assessee by applying the provisions of section 10(23C)(iiiab) of the Act. Accordingly grounds taken by the assessee in this respect are allowed.

Summary

Issues:
The appeal is against the order of Ld. CIT(A), NFAC, Delhi regarding rectification order u/s. 143(1) of the Income-tax Act, 1961.

Delay Condonation:
The appeal was time-barred by 22 days due to the pandemic period excluded by the Hon'ble Supreme Court. The delay was condoned, and the case was adjudicated.

Grounds Raised by Assessee:
The grounds raised by the assessee included failure to comply with conditions precedent, misinterpretation of provisions of s. 154 of the Income Tax Act, and rejection of claim u/s. 10(23C)(iiiab) of the Act.

Brief Facts:
The assessee, a University, claimed exemption u/s. 10(23C)(vi) of the Act which was rejected. A rectification application was filed to correct the claim to u/s. 10(23C)(iiiab) which was also rejected.

Arguments:
The assessee claimed exemption u/s. 10(23C)(iiiab) consistently and sought rectification of the inadvertent mistake. The Rule of Consistency was emphasized, and reliance was placed on past assessment orders.

Decision:
The Tribunal found it was an inadvertent mistake and rectifiable under s. 154 of the Act. The claim under sec. 10(23C)(iiiab) should have been allowed, following a similar decision by the ITAT Lucknow. The Ld. AO was directed to allow the claim, and the appeal of the assessee was allowed.

Conclusion:
The Tribunal allowed the appeal of the assessee, setting aside the finding of the Ld. CIT(A) and directing the Ld. AO to allow the claim under section 10(23C)(iiiab) of the Act.