The filing of Form 9A is directory, not mandatory, if submitted before assessment completion. CBDT Circulars 7/2018 and 6/2020 empower the CIT(E) to condone delays in filing both Form 9A and returns of income for specific assessment years.

ORDER

PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 12/06/2024 in respect of the A.Y. 2016-17 and raised the following grounds:

“1. The order passed by the learned Commissioner of Income Tax (Appeal), NFAC under section 250 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case.

2. The appellant denies itself to be assessed at an income of Rs. 1,24,32,110/- as against the returned income of Rs. NIL/-, on the facts and circumstances of the case.

3. Grounds on disallowance of exemption claimed u/s 11(2), Rs.1,11,73,827/-:

a. The authorities below have failed to appreciate that filing of form 9A within the time specified under section 139(1) of the Act is only directory in nature and not mandatory, on the facts and circumstances of the case.

b. The authorities below ought to have allowed the accumulation as the appellant has satisfied all other condition and the exemption cannot be denied merely on a technical breach of delay in filing form 9A, on the facts and circumstances of the case.

c. The appellant in the subsequent years has not claimed the money spent out of the accumulation fund as application of income, thus, there is no loss to the revenue and is revenue neutral, on the facts and circumstances of the case.

d. Without prejudice and not conceding that filing of form 9A is directory in nature, the learned CIT(A) ought to have awaited the order of the learned CIT(E) in view of the condonation application filed by the appellant before the learned CIT(E) on 26.02.2020, on the facts and circumstances of the case.

4. Grounds on disallowance of depreciation, Rs.12,58,280/-:

a. The authorities below have erred in disallowing the claim of depreciation of Rs.12,58,280/- on the fact and circumstances of the case.

b. The authorities below have failed to appreciate that the appellant has not claimed application of income towards capital expenditure in previous years, thus no disallowance of depreciation could be made for the impugned year, on the facts and circumstances of the case.

c. The learned assessing officer has verified the claim of depreciation for the assessment year 2017-18 and has allowed such claim, thus leading to the inference that the purchase of capita assets was not claimed as application, on the facts and circumstances of the case.

5. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case.

6. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above.

7. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest of justice and equity.”

The brief facts of the case are that the assessee is a charitable trust registered under the provisions of the Income Tax Act. The assessee filed its return of income on 30/03/2017 and declared a Nil income after claiming exemption u/s. 11 of the Act. Thereafter the case has been selected under CASS and notice u/s. 143(2) was issued. Subsequently, a notice u/s. 142(1) was issued. The assessee filed their response electronically. The AO proposed to deny the exemption for which the assessee filed their reply and sought for the condonation in filing the form 10B which was also granted by the AO. Thereafter the assessee filed her application before the Ld.CIT(E) for condoning the delay in filing