Tribunal remands case for fresh adjudication, stressing natural justice. Appeal allowed for statistical purposes.

The Tribunal set aside the appellate order passed by the CIT(A) and remanded the matter back for fresh adjudication, emphasizing the importance of natural justice. The appeal was allowed for statistical purposes, with the Tribunal clarifying that it had not commented on the merits of the issue.

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Issues Involved:
1. Validity of the rectification order under Section 154 of the Income-tax Act, 1961.
2. Denial of benefit under Sections 11 to 13 of the Income-tax Act, 1961.
3. Ex-parte order passed by the CIT(A) without providing an opportunity to the assessee.
4. Compliance with the filing requirements for Form 10B and the return of income.

Issue-wise Detailed Analysis:

1. Validity of the Rectification Order under Section 154:
The assessee contested the rectification order dated 10.08.2020, which computed the income at Rs. 94,60,424/-, arguing that the order was flawed both factually and legally. The CPC, Bangalore, had processed the return under Section 143(1) and denied the benefit of Sections 11 and 12, leading to the rectification application under Section 154 being dismissed.

2. Denial of Benefit under Sections 11 to 13:
The CPC, Bangalore, disallowed the benefit of Sections 11 to 13, stating that the audit report in Form 10B was not filed along with the return of income, which is a requirement under Section 12A(1)(b) read with the first proviso to Rule 12(2) of the Income Tax Rules. The assessee argued that both the return and Form 10B were filed before the due date, and thus, the claim for deduction should be allowed. The CIT(A) upheld the CPC's decision, stating that the audit report was filed after the return, making the deduction under Section 11 not allowable.

3. Ex-parte Order by CIT(A):
The assessee claimed that the CIT(A) passed the order ex-parte without providing an opportunity to present its case. The Tribunal noted that adherence to the principles of natural justice is crucial and that the CIT(A) should have given the assessee an opportunity to explain its case. The Tribunal found a breach of natural justice principles as the assessee was condemned unheard.

4. Compliance with Filing Requirements:
The CIT(A) noted that the audit report in Form 10B was filed after the return of income, which led to the denial of the exemption under Section 11. However, the Tribunal observed that the assessee had filed both the return and the audit report before the due date, although not simultaneously. The Tribunal suggested that the assessee might approach the jurisdictional Commissioners of Income Tax for condonation of delay in filing Form 10B, as per the Board's circulars.

Conclusion:
The Tribunal set aside the appellate order passed by the CIT(A) and remanded the matter back to the CIT(A) for fresh adjudication on merits, ensuring that the assessee is given an opportunity to explain its case. The Tribunal emphasized the importance of natural justice and clarified that it had not commented on the merits of the issue. The appeal was allowed for statistical purposes.

Order Pronounced:
The order was pronounced in open Court on 23.02.2023 at Allahabad, U.P., after the conclusion of the hearing in the presence of the CIT-DR.

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