2023 (1) TMI 41 - AT - Income Tax

Rectification of error u/s 154 - Filing of ITR in wrong form and capacity - Exemption u/s 11 - Denial of exemption on failure to file of audit report in Form No.10B - HELD THAT:- We find that the appellant had filed the return of income in Form No.5. However, no documents were filed along with the return of income justifying the claim for exemption u/s 11 of the Act. It is only after receipt of intimation, the appellant took a plea that its income was exempt u/s 11 by virtue of registration u/s 12A of the Act. Even the audit report was admittedly not filed along with the petition u/s 154 or before the NFAC. The CPC while processing the return of income u/s 143(1) can take into consideration only the return of income an accompanied document, when the appellant had filed the return of income in Form No.5, the natural inference to be drawn is that the assessee is a partnership firm.

When the return was filed as if it is a firm, it follows that computation of tax liability should be made on the basis that it is a partnership firm. The CPC cannot go beyond the return of income. In the circumstances, we are of the considered opinion that the AO had rightly rejected the 154 petition as well as the NFAC justified in confirming the action of the Assessing Officer. Therefore, the appeal filed by the assessee stands dismissed.