9911796707
TMI Blog2023 (1) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal centre was not based upon the facts and circumstances of the case and cannot be sustained. 2. That denying of exemption u/s 11 and 12 and disallowing the amount applied during the previous year 2017-18 for revenue account Rs.86,26,702.00 and the capital account Rs.59,48,334.00 and taking unlawfully and arbitrarily the gross receipts as total income instead of net income was against basic tenets of the law and cannot be sustained. 3. That non-consideration of duly been filed audit report in Form no.10B and the I.T. return within due time of filing i.e. 31.03.2018 was not based upon the facts and circumstances of the case and cannot be sustained. 4. That submission or non-submission of audit report in Form no.10B is a debatable issue and it cannot be purview of the section 143(1) of the Income tax Act, 1961. 5. That the appellant trust keeps reserve it's right to add further ground(s) on or before the hearing of the appeal." 3. Brief facts of the case as emanated from the record are that the assessee is a charitable trust established with the main object of imparting education to student of rural areas without any profit motive. The trust was granted registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act,1961 Dated 12.09.2018 5 The Approval u/s.80G(5)(vi) of the Income Tax Act,1961 Dated 27.08.2019 6 The Approval u/s.10(23C)(vi) of the Income Tax Act, 1961 Dated 22.02.2020 7 A Declaration from Mr. Anil Dhanuka The Computerist who was entrusted for e-filing. 8 The Copy of the Communication of proposed Adjustment Dated 01.03.2019 of Learned Dy. Commissioner of Income Tax, CPC, Bengaluru. 9 The Copy of the Audit Report in Form No.10B for The Financial Year 2017-2018 10 The copy of the Assessment (Intimation u/s.143(1) for the assessment year 2018-2019 Corresponding Previous Year 2017-2018; i.e., year under Appeal 11 The copy of the CBDT Circular dated 23.04.2019 12 The copy of the I.T.R-7 of the Trust for the previous year 2017-2018 (Corresponding Assessment year 2018- 2019). 13 The copy of The Financial Audit Report for The Previous year 2017-2018 (Corresponding Assessment year 2018- 2019) i.e., year under Appeal. 14 Copy of Appeal Order u/s. 250 of the I T Act,61 of CIT(Appeals), of our other client on identical grounds 15 The copy of the general power of Attorney. 6. Further, the ld. counsel for the assessee referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given the job of uploading the Income Tax Return and Audit Report by the chairperson of the appellant trust but due to pressure of professional assignments he could not e-file them before 31.10.2018. It is further claimed that due to some personal exigencies, he could file the return only on 15.11.2018 and that by oversight the audit report also was e-filed only later on 30.03.2019. 5.1 It is noted that the said undated letter is not in the form of any affidavit and there is no proof of the identity of the person concerned. It is further seen the Income Tax Return was e-fled on 15.11.2018 using the credentials and DSC of Shri Sudip Ganguly, Chairperson of the appellant Trust and not by any other person/professional. It is pertinent to note that the verification part of Income Tax Return itself is dated 01.11.2018 which is clearly beyond the extended due date of 31.10.2018. Hence, this contention of delay being attributable to a third party is totally irrelevant to the issue. On this ground of failure to furnish the return of income on or before the prescribed due date u/s.139(4A) alone, the appellant's claim of deduction u/s.11 and 12 fails. 5.2 Further, the Audit Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elay has to be filed before the Assessing Officer concerned stating the reasons for delay which were beyond its control. Only on getting the delay condoned by the Assessing Officer that the appellant's claim for deduction u/s.11 and 12 could have been considered by CPC while processing the return u/s.143(1). Nevertheless, the appellant's failure to furnish the return of income by itself has resulted in the disentitlement of such deduction in appellant's case. 6.1. It is further seen that during the pendency of this current appeal against the intimation u/s.143(1), CBDT has issued a revised Circular No.2/2020 vide ref. in F.No.197/55/2018-1TA-I dated 3rd January, 2020 in supersession of its earlier instruction and provided for condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10B for Assessment Year 2018-19 and subsequent years. As per this circular, where there is delay of up to 365 days in filing Form No. 10B for Assessment Year 2018-19 or for any subsequent Assessment Years, the Commissioners of Income-tax are authorized to admit such belated applications of condonation of delay u/s 119(2) of the Act and decide on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income for A.Y.2018-19 within the time limit given as per section 139(1) as prescribed u/s.139(4A) and has also failed to furnish the Audit Report in Form 10B along with the Return of Income as required u/s.12A(1)(6) and 12A(1)(ba) read with Rule 17B. 9 It is therefore, held that the denial of deduction u/s.11 vide intimation u/s.143(1) by DCIT, CPC, Bangalore is strictly in accordance with the provisions of section 12A(1)(b) / (ba) of the Act. Therefore, there is no reason or ground to interfere with the order of the DCIT, CPC, Bangalore in this regard. Appellant's Ground No.1 to 5 fails and the denial of deduction u/s.11 vide intimation u/s.143(1) issued by the DCIT, CPC, Bangalore is fully confirmed 10. On the issue of charging of interest u/s.234A 234B and 234C, since it is a statutory charge, and is a settled issue as held in the case of Commissioner of Income Tax V Anjum M.H Ghaswala (2001) 252 1TR1 (SC) followed by the decision in the case of Karanvir Singh CGossal v. CIT [20121 25 taxmann.com 213 (SC), no interference is warranted thereon. 11. Levy of late filing fee u/s.234F is also found tenable on facts and in law. In fact, in the return of income at S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at date] the report of such audit in the prescribed form49 duly signed and verified by such accountant and setting forth such particulars as may be prescribed;] (ba) the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of subsection (4A) of section-139, within the time allowed under that section. *** *** *** 9. Section 12A(1)(ba) of the Act provides that the provisions of section 11 and 12 shall apply in relation to income of any trust or institution if the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of section 139 i.e. within the time allowed under that section. Now, since reference has been made to section 139(4A) of the Act and the same is reproduced below: "S. 139(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with the provisions of sub-section (4A) of section 139, within the time allowed under that section. Otherwise the exemption u/s-11 i.e. sr. no 4(i) and 4 viii in schedule Part BTI is not allowed." Based on this, exemption u/s 11 of the Act has been denied to otherwise eligible trust, thereby creating huge demand. 2. In the matter, the memorandum explaining the relevant provisions of the Finance Bill, 2017 reads as under: "as per the existing provisions of said section, the entities registered under section 12AA are required to file return of income under subsection (4A) of section 139, if the total income without giving effect to 05 Standards & Norms, Legal Series Vol. XII, Issue 1, April 2019 CBDT CLARIFICATION ON PENALTIES FOR DELAYED FILING OF RETURN IN ITR-7 the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. However, there is no clarity as to whether the said return of income is to be filed within time allowed u/ s 139 of the Act or otherwise. In order to provide clarity in this regard , it is proposed to further amend section 12A so as to provide for further condition that the person in receipt of the income charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were received from various assessees on this issue. Taking note of this issue, the said CBDT Circular has issued and while dealing with this issue, the returns filed within the time allowed u/s 139 of the Act have been directed to be accepted for the purpose of considering benefit of deduction u/s 11 of the Act. Now, since only section 139 of the Act has been mentioned and does not specify whether it is about u/s 139(1) of the Act or section 139(5) of the Act, the view beneficial to the assessee needs to be accepted and, since section 139(1) and section 139(5) are part of section 139 only and in this section 139 and sub-section (5) provides the mechanism to file a belated return, therefore, for A.Y 2018-19, even if the assessee files the return before the last date of filing of belated return the same should be treated as due compliance to section 12A(1)(ba) of the Act. For the year under appeal, the belated return could have been filed before 31.03.2019, and since the assessee has filed the return on 15.11.2018, therefore, considering the directions of CBDT Circular dated 23.04.2019, which are binding on the Revenue authorities, we are of the view that the assessee has fulfille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to produce the audit report at a later stage either before the Income-tax Officer or before the appellate authority by assigning sufficient cause." 14. In the above judgment, Hon'ble Court has held that filing of audit report is directory in nature and its substantial compliance would suffice. The ld. Departmental Representative failed to place before us any other binding precedents of Hon'ble Jurisdictional High Court or the Hon'ble Apex Court. Therefore, considering the ratio laid down in the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust vs. ITO(Exemption) (supra), we find that though the audit report has been uploaded after the filing of return of income but the said report has been signed by the auditor on 28.10.2018 and the copy of this report is placed at 40- 41 of paper book and the date of audit report is prior to the filing of the return of income, therefore, it is presumed that conducting of audit for preparation of audit report is before e-filing of the return of income but as claimed by the assessee due to technical glitches, the report was uploaded after filing the return of income. 15. Though the Hon'ble Court holds that the report should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
