2025 (6) TMI 1984 - AT - Income Tax

Denial of exemption u/s.11 - appellant had failed to fill up Part B3 of Schedule Part BTI - CIT(A) confirmed the adjustment by holding that the appellant had filed Form 10B instead of Form 10BB - HELD THAT -CIT(A) is not empowered to confirm the addition for a different reason. The CBDT vide order dated 7th October 2021 had condoned the delay in filing Form 10BB up to the period of 31st March 2024. Therefore the reasoning of the CIT(A) is not valid in law and also the CIT(A) had failed to examine the reasons assigned by the CPC while processing the return of income. Therefore the matter is restored to the file of the CIT(A) for denovo disposal of the appeal after affording an opportunity of being heard to the appellant. Appeal filed by the assessee stands partly allowed.

Summary

The Appellate Tribunal (ITAT Cochin) heard an appeal by a charitable trust against the CIT(A)'s order dated 19.02.2025 for AY 2023-24, which upheld the CPC's denial of exemption under section 11 of the Income-tax Act, 1961. The CPC disallowed the exemption because the appellant failed to fill Part B3 of Schedule BTI and filed Form 10B instead of Form 10BB. The CIT(A) confirmed this denial, relying on the incorrect form submission.The Tribunal held that the CIT(A) "is not empowered to confirm the addition for a different reason," noting that the CBDT had condoned the delay in filing Form 10BB up to 31.03.2024 by order dated 7th October 2021. Thus, the CIT(A)'s reasoning was "not valid in law" and failed to consider the CPC's stated reasons adequately. The matter was accordingly restored to the CIT(A) for de novo disposal after affording the appellant an opportunity of being heard.The appeal was "partly allowed" with remand for fresh adjudication.