2024 (6) TMI 867 - AT - Income Tax

Disallowance of deduction u/s 11(2) - filing of Form No. 10 manually - delayed filing of Form 10 electronically (i.e. online) - HELD THAT - The Bench noted that the adjustment made u/s 143(1) by A.O at CPC resulting in an addition in the ROI of Rs. 43, 911/- only on a technical flaw particularly in view of the facts that the statutory provisions requiring filing of Form10 etc. online along with the ROI only came into being on and from this A.Y. 2016-17. Thus this new provision was not in knowledge of the assessee resulting in filing of Form No. 10 manually in time prescribed u/s 139(1) before Territorial Jurisdictional A.O. The same was filed on 21-04-2016. This fact has not been disputed by the ld. DR thus even the CBDT issued a direction to condone the delay for the Asst. Years 2016-17 2017-18 2018-19 and to accept Forms 9A 10 by condoning the delay if the ROI filed on or before 31 March of the respective asst. years. In this case since the ROI was filed within time provided u/s 139(1) and Form No. 10 was also filed manually before filing of the return before the Territorial Jurisdictional A.O therefore the delay even if at all was caused in electronically filing the Form-10 for rectification the same ought to have been condoned in the facts of the case. As relying on case of Unviersity of Burdwan C/o S. N. Ghosh Associates 2022 (11) TMI 1494 - ITAT KOLKATA and the fact that the assessee has filed the form in manually the same is directed to be considered and the assessee is directed to upload the form if not done electronically so far within 30 days from the receipt of this order. With this observation the appeal of the assessee is allowed.

Summary

Issues Involved:

1. Validity of the appellate order dated 23-11-2022.
2. Disallowance of deduction under section 11(2) due to delayed electronic filing of Form 10.
3. Adjustment made under section 143(1) by CPC resulting in an addition of Rs. 14 Lacs.
4. Applicability of CBDT Circular No. 6/2020 for condoning delay in filing Form 10.
5. Whether the appeal should have been decided along with the appeal against the rectification order under section 154.
6. Treatment of corpus donations and their exemption under section 11(1)(d).
7. Rectifiability of issues related to delayed furnishing of forms under section 154.

Detailed Analysis:

1. Validity of the Appellate Order Dated 23-11-2022:
The appellant argued that the appellate order dated 23-11-2022 was "bad in law, bad in facts and in violation of the principle of natural justice" due to no opportunity being given. The Tribunal noted that the appellant failed to file Form 10 electronically within the prescribed time, leading to the disallowance of the deduction under section 11(2).

2. Disallowance of Deduction Under Section 11(2) Due to Delayed Electronic Filing of Form 10:
The CIT(A) held that the deduction under section 11(2) was disallowed because Form 10 was not filed electronically within the due date as per Rule 12(2) read with Rule 17(2). The Tribunal upheld this finding, noting that the statutory requirement for electronic filing came into effect from the assessment year 2016-17.

3. Adjustment Made Under Section 143(1) by CPC Resulting in an Addition of Rs. 14 Lacs:
The adjustment made by CPC was based on the non-filing of Form 10 electronically. The Tribunal noted that the appellant had filed Form 10 manually within the prescribed time before the jurisdictional AO. The Tribunal found that the adjustment was a technical flaw and should have been rectified under section 154.

4. Applicability of CBDT Circular No. 6/2020 for Condoning Delay in Filing Form 10:
The Tribunal highlighted that the CBDT Circular No. 6/2020 directed the condonation of delay for the assessment years 2016-17, 2017-18, and 2018-19 if the return of income (ROI) was filed on or before 31 March of the respective assessment years. Since the appellant filed the ROI within the time provided under section 139(1) and Form 10 manually, the Tribunal held that the delay should have been condoned.

5. Whether the Appeal Should Have Been Decided Along with the Appeal Against the Rectification Order Under Section 154:
The appellant argued that the CIT(A) erred by not deciding the appeal along with the second appeal filed against the rectification order under section 154. The Tribunal found merit in this argument, indicating that simultaneous consideration could have resulted in a judicious outcome.

6. Treatment of Corpus Donations and Their Exemption Under Section 11(1)(d):
The appellant contended that the amount transferred to the Jirnodhar Reserve Fund Account was a corpus donation and should be exempt under section 11(1)(d). The Tribunal noted that the appellant had been maintaining separate accounts for corpus donations and that the amount in question was a retransfer to the reserve fund, thus qualifying as a corpus donation.

7. Rectifiability of Issues Related to Delayed Furnishing of Forms Under Section 154:
The Tribunal referred to the decision in the case of University of Burdwan vs. ACIT (ITAT Kolkata), which held that mistakes apparent from the record are rectifiable under section 154. The Tribunal directed that the manually filed Form 10 should be considered, and the appellant should be allowed to upload the form electronically within 30 days from the receipt of the order.

Conclusion:
The Tribunal allowed the appeal, directing the consideration of the manually filed Form 10 and permitting the appellant to upload it electronically within 30 days. The Tribunal emphasized the applicability of CBDT Circular No. 6/2020 and the rectifiability of the issues under section 154.