Back
INCOME TAX APPELLATE TRIBUNAL (CHENNAI BENCH)
ABY T. VARKEY, JM
assessee Trust – Appellant
Versus
Ld.CIT(A) – Respondent
Income Tax Appeal for AY 2022-23
For the Appellants/Petitioners: Not mentioned
For the Respondents: Not mentioned
Technicalities in filing should not bar legitimate claims for income accumulation under tax law.
Headnote:(A) Income Tax Act, 1961 - Sections 11(2) and 139(1) - Appeal against the disallowance of accumulation of income by the Ld.CIT(A) for failure to file Form 10 - The assessee Trust filed the RoI along with mandatory Form 10B before the due date, but Form 10 was not processed due to technical issues - The Ld.CIT(A) erroneously assumed non-filing of Form 10B - Court refers to CIT v. SPIC Educational Foundation, emphasizing that technicalities should not prevent legitimate claims. (Paras 2, 3, 6, 8)
Facts of the case:
The assessee Trust, established under the Income Tax Act, filed its return of income for AY 2022-23, claiming accumulation of income of Rs.54 lakhs. However, the claim was denied due to the alleged non-filing of Form 10.
Findings of Court:
The Trust had indeed filed Form 10B on time, and the rejection of the claim was based on an erroneous assumption.
Issues: The main issue was whether the Trust's claim for accumulation of income could be denied due to non-filing of Form 10, which was not accurately flagged by the CPC.
Ratio Decidendi: The court held that the Ld.CIT(A) misdirected himself regarding the filing requirements and that the Trust's claim should not be denied on technical grounds.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. disallowance of income accumulation due to non-filing of form 10. (Para 2 , 3 , 4) |
| 2. technical issues in filing should not affect the claim. (Para 6 , 7) |
| 3. court's directive on the erroneous assumption regarding filing. (Para 8) |
| 4. final decision to allow the appeal. (Para 9) |
ORDER आदशे
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee Trust against the order of the Learned Commissioner of Income Tax (Appeals)/Addl./JCIT (A)-1, (hereinafter referred to as “the Ld.CIT(A)”), Jaipur, dated 27.09.2024 for the Assessment Year (hereinafter referred to as "AY”) 2022-23.
2. The main grievance of the assessee is against the action of the Ld.CIT(A) disallowing the accumulation of income u/s.11(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) on the ground that Form 10B was not filed within the due date u/s.139(1) of the Act.
3. The brief facts are that the assessee is a public Charitable Trust formed on 21.10.2010 u/s.12AB of the Act has been regularly filing his return of income (RoI) along with the Audit Report in Form 10B. For AY 2022-23, the assessee had filed the RoI on 07.09.2022 along with Audit Report (Form 10B) admitting ‘Nil’ income. According to the assessee, while filing RoI & Audit Report, the assessee Trust uploaded Form 10 [accumulation of income] and was of the bona fide belief that it has uploaded the Form 10 in the Income Tax Portal, but to its dismay when the return was processed by the CPC, and intimation dated 31.03.2023 was passed, it came as a shock to the assessee that accumulation of income to the tune of Rs.54 lakhs has been denied, for not uploading the Form 10. Realizing that, may be due to technical glitches, Form 10 couldn’t have been uploaded electronically when RoI was filed on 07.09.2022 u/s.139(1), the assessee again refilled the Form 10 on 02.06.2023 and pointed out that the omission in filing Form No.10 [i.e. accumulation of income u/s.11(2) of the Act to the tune of Rs.54 lakhs] was purely on account of complexity while uploading the said Form while uploading the RoI & Audit Report in Form 10B.
4. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)/JCIT(A) against the action of the CPC denying the claim of the assessee Trust, which was dismissed on the ground that for claiming exemption u/s.11 of the Act, it is mandatory to file Form No.10B i.e. Audit Report within the specified time.
5. Aggrieved, the assessee is in appeal before this Tribunal.
6. We have heard both the parties and perused the material available on record. It is noted that the assessee is a public Charitable Trust formed in the year 2010 and was enjoying registration u/s.12AB of the Act and carrying on charitable activities. The assessee Trust is noted to have filed its RoI for AY 2022-23 on 07.09.2022 u/s.139(1) of the Act admitting ‘Nil’ income along with mandatory Form 10B i.e. Audit Report. In the RoI filed on 07.09.2022, the assessee Trust is noted to have duly disclosed under Schedule-I, the details of amount accumulated as per sec.11(2) of the Act as well as the same was duly disclosed in Form No.10B (Audit Report) at Column Nos.5 & 6 [refer Annexure-B] wherein we note that the sum of Rs.54 lakhs has been clearly mentioned therein as amount accumulated as per sec.11(2) of the Act. It is further noted that the assessee Trust while filing the ITR on 07.09.2022 has uploaded the Audit Report in Form No.10B [which was well before the due date u/s.139(1) of the Act] but the CPC in its intimation u/s.143(1) of the Act on 31.03.2023 has disallowed the accumulation of income of Rs.54 lakhs, only on the reason that assessee Trust didn’t file Form No.10 [accumulation of income].
7. According to the assessee, while uploading RoI & Audit Report [Form 10B], the assessee also uploaded Form 10 [accumulation of income] and was of the bona fide belief that it has uploaded the Form 10 in the Income Tax Portal, but to its dismay when the return was processed by the CPC, and intimation d
