Because it is an exemption provision, Section 54B of the Income Tax Act must be closely read
Fact and Issue of the case
These are the appeals filed by the assessee directed against the separate orders of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 24.03.2022 for the assessment years 2017-18 and 2018-19 respectively. ITA No.310/PUN/2022, A.Y. 2017-18 :
At the time of hearing of the above appeal, the appellant sought permission to withdraw the appeal on the ground that the issue in the present appeal in ITA No.310/PUN/2022 for A.Y. 2017-18 stands settled in favour of the appellant-assessee.
On the other hand, the ld. Department Representative had expressed no objection to permit the withdrawal of the appeal.
In the circumstances, we hereby grant permission to the appellant to withdraw the appeal. Accordingly, the above appeal in ITA No.310/PUN/2022 for A.Y. 2017-18 stands dismissed as withdrawn.
In the result, the appeal filed by the assessee in ITA No.310/PUN/2022 for A.Y. 2017-18 stands dismissed.
Now, come to the next two appeals of the assessee in ITA Nos.309 & 311/PUN/2022 for A.Ys. 2017-18 & 2018-19 for adjudication.
Since the identical facts and common issues are involved in both the above appeals of the assessee ITA Nos.309 & 311/PUN/2022 for A.Ys. 2017-18 & 2018-19, we proceed to dispose of the same by this common order. 8. For the sake of convenience and clarity, the facts relevant to the appeal of the assessee in ITA No.309/PUN/2022 for A.Y. 2017-18 are stated herein.
Briefly, the facts of the case are that the appellant is a company incorporated under the provisions of section 8 of the Companies Act, 2013. The appellant company is a non-profit organisation. It was formed with the object to aid, promote, guide, encourage, run, assist, invest, support, facilitate, activities in the field of education for students and to carry out research, conduct programmes, create and use technology to bring quality-invariant and affordable education for the students and to create awareness about education with the help of educational content, e-learning tools, experts and community to develop learning solution for meeting local market needs by associating with local partners. The appellant was registered u/s 12A of the Income Tax Act, 1961 (‘the Act’). The Return of Income for the assessment year 2017-18 was filed on 29.11.2017 declaring Rs.Nil income. The return of income was taken up for processing u/s 143(1) on 19.11.2018, wherein, the appellant was show caused that in the absence of Form No.10B, the benefit of exemption u/s 11 cannot be allowed. Subsequently, on 13.03.2019, an Intimation u/s 143(1) was issued, wherein, the benefit of exemption u/s 11 was disallowed for want of Form No.10B. Subsequently, on 02.04.2019, the appellant had filed Form No.10B electronically. Thereafter, vide application dated 14.10.2019, the appellant filed a petition seeking the rectification of the intimation u/s 143(1) and the same was rejected by the CPC vide order dated 25.11.2019. 10. Being aggrieved by the order u/s 154, an appeal was filed before the NFAC who vide impugned order after referring to CBDT Circular No.10/2019 dated 22.05.2019held that CPC had no power of condoning the delay in filing the Form No.10B and, accordingly, dismissed the appeal.
Being aggrieved, the appellant is in appeal before us in the present appeal.
Observation of the court
It is submitted before us that vide CBDT Circular No.10/2019 dated 22.05.2019, the CBDT extended the time for filing the Form No.10B till 30.09.2019 for the years prior to the assessment year 2018-19. Similarly, vide CBDT Circular No.28/2019 dated 27.09.2019, the CBDT extended the time for filing of the Form No.10B till 31.03.2020 for the assessment years 2016-17 and 2017-18, copy of the same placed at page no.95 of the Paper Book. Therefore, it is submitted that the CPC ought to have considered the belated filing of Form No.10B.
On the other hand, ld. Sr. DR placed reliance on the orders of the lower authorities.
We heard the rival submissions and perused the material on record. The CPC had denied the claim for exemption of income u/s 11 on the ground that the Form No.10B was not filed along with the return of income nor before processing of the return of income by the CPC. It was filed only on 02.04.2019. Therefore, it is evident that at the time of processing of the return of income by the CPC, there was no Form No.10B was available with the CPC. Thus, the CPC was justified in rejecting the claim for exemption of income u/s 11 of the Act. The contention of the ld. AR that vide CBDT Circular No.10/2019 dated 22.05.2019, the CBDT extended the time for filing of the Form No.10B till 30.09.2019 for the years prior to the assessment year 2018-19 is patently wrong, on perusal of the said CBDT Circular (supra) which his placed at page no.93 of the Paper Book and also set out by the NFAC in para 4.3 of the impugned order, it would be clear that vide clause (i) of para 4 of the said CBDT Circular (supra), the delay in filing of Form No.10B for the assessment years 2016-17 and 2017-18 has been extended till the due date specified u/s 143(1) in cases where the audit report for the previous year has been obtained before filing of the return of income and has been furnished subsequent to the filing of the return of income. In other case, the power of condonation of the delay in filing the Form No.10B had been delegated to the Commissioner of Income Tax and all such applications shall be disposed of by 30.09.2019 and the said date was extended upto 31.03.2020 vide CBDT Circular No.28/2019 dated 27.09.2019. Therefore, we do not find any merit in the appeal filed by the assessee.
In the result, the appeal filed by the assessee in ITA No.309/PUN2022 for A.Y. 2017-18 stands dismissed. ITA No.311/PUN/2022, A.Y. 2018-19 :
Since the facts and issues involved in above two appeals of the assessee in ITA Nos.309 & 311/PUN/2022 for A.Y. 2017-18 and 2018-19 are identical, therefore, our decision in ITA No.309/PUN/2022 for A.Y. 2017-18 shall apply mutatis mutandis to the appeal of the assessee in ITA No.311/PUN/2022 for A.Y. 2018-19 respectively. Accordingly, the appeal of the assessee in ITA No.311/PUN/2022 for A.Y. 2018-19 stands dismissed.
To sum up, all the above three appeals of the assessee stands dismissed, as term indicated above.
In the result, appeal of the assessee is allowed and ruled in favour of the assessee
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