Appeal allowed for delayed forms, deduction of expenses considered, case remanded for reevaluation.

The appeal by the assessee society against the denial of exemptions under sections 11 and 12 of the Income-tax Act, 1961, due to delayed filing of forms was allowed by the ITAT Raipur. The ITAT directed the Assessing Officer to consider the claim for deduction of expenses incurred by the society, leading to a remand of the case for reevaluation. The decision aligned with a previous case where exemption was denied but deduction of expenses was accepted. The matter was remanded for reconsideration based on commercial principles.

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Issues Involved:
The issues involved in the judgment are the denial of exemptions under sections 11 and 12 of the Income-tax Act, 1961, due to delayed filing of Form No. 10 and Form No. 10B by the assessee society, leading to a consequential demand raised by the Assessing Officer (AO) and the rejection of the application seeking condonation of delay in filing the forms by the Commissioner of Income-Tax (Exemption), National Faceless Appeal Center (NFAC), Delhi.

Summary of Judgment:
1. The appeal was filed by the assessee society against the order passed by the Commissioner of Income-Tax (Exemption), NFAC, Delhi, which arose from the order passed by the AO under Sec. 154 of the Income-tax Act, 1961, for the assessment year 2016-17. The assessee challenged the denial of exemptions under sections 11 and 12 of the Act.

2. The assessee society filed its return of income for A.Y. 2016-17, followed by a revised return declaring income in the status of AOP/BOI. Forms 10 and 10B were filed after the return of income, leading to the denial of exemptions by the AO and a consequential demand raised.

3. The application for condonation of delay in filing Form No. 10 was rejected by the CIT(Exemption), Bhopal, and the claim for exemption was declined due to failure to file forms within the stipulated period.

4. The matter was appealed by the assessee society before the ITAT Raipur, where arguments were presented regarding the deduction of expenses incurred by the society, despite the denial of exemptions under sections 11 and 12.

5. The ITAT held that assessing the gross receipts of the assessee society as its income was a mistake apparent from the record, and directed the AO to consider the claim for deduction of expenses as debited in the income and expenditure account, to the extent allowable under the Act.

6. The judgment referred to a similar case decided by the ITAT, Raipur, where the claim for exemption was declined but the claim for deduction of expenses was accepted, leading to the restoration of the matter to the AO for consideration.

7. Consequently, the appeal of the assessee society was allowed for statistical purposes, and the case was remanded to the AO to reevaluate the claim for deduction of expenses as per commercial principles.

Order pronounced in open court on 21st day of August, 2023.

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