Tribunal grants exemption despite belated form filing, emphasizes importance of timely information

The Tribunal allowed the appeal filed by the assessee, overturning previous decisions and directing the granting of the exemption u/s. 11 of the Act. The Tribunal held that the belated filing of Form No. 10 along with the revised return should not have led to the denial of exemption u/s. 11. The decision emphasized the mandatory nature of filing Form 10 and the importance of assessing authorities having necessary information for assessment. The order was pronounced on 12-07-2023.

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Issues:
The judgment involves issues related to rectification under section 154 of the Income Tax Act, 1961, denial of benefit of section 11, filing of Form No. 10, and claim of deduction u/s 11(2) of the Act.

Rectification Application and Denial of Exemption:
The assessee filed a revised return along with Form No. 10 for the Assessment Year 2019-20, seeking the benefit of exemption u/s. 11(2) of the Act. However, the rectification petition was rejected on the grounds that Form No. 10 was not e-filed before the due date specified u/s. 139(1) of the Act, leading to the denial of exemption u/s. 11(2) by the lower authorities.

Appeal and Grounds Raised:
Aggrieved by the rejection, the assessee appealed before the National Faceless Appeal Centre, which dismissed the appeal stating that the filing of Form 10 after the due date specified u/s. 139(1) rendered the claim ineligible for exemption u/s. 11(2) of the Act. The appellant raised grounds challenging the upholding of the rejection of the rectification application and the denial of the deduction claimed u/s 11(2) of the Act.

Arguments and Legal Precedents:
The appellant contended that though Form 10 was filed belatedly, it was submitted along with the revised return, and technical issues on the e-filing portal caused the delay. The appellant cited relevant High Court and Supreme Court judgments to support the claim for exemption u/s. 11(2) of the Act.

Decision and Rationale:
Upon careful consideration, the Tribunal observed that the appellant had filed the original return with the required documents, and the subsequent filing of Form No. 10 along with the revised return should not have led to the denial of exemption u/s. 11. The Tribunal referred to legal precedents emphasizing the mandatory nature of filing Form 10 and the need for assessing authorities to have the necessary information before completing the assessment. Consequently, the Tribunal set aside the lower authorities' order and directed the allowance of the claim of exemption u/s. 11 of the Act, thereby allowing the grounds of appeal raised by the assessee.

Conclusion:
In conclusion, the Tribunal allowed the appeal filed by the assessee, overturning the previous decisions and directing the granting of the exemption u/s. 11 of the Act. The order was pronounced on 12-07-2023.

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