Exemption under section 11 and registration condition under section 12A(1)(ba): filing under 139(1) or 139(4) preserves benefit.

An assessee claiming income tax exemption for charitable activities must satisfy the registration condition that requires filing the income-tax return within the prescribed time; after the Finance Act amendment effective 01.04.2023 filing either an original or a belated return under the relevant return provisions meets that condition. The tribunal applied those principles to hold that a return filed on the last date permitted for the relevant year satisfied the registration requirement and therefore the exemption claim was allowed under the examined facts.

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Issues: Whether an assessee who filed its return of income within the time allowed under section 139(4) for the relevant assessment year is entitled to claim exemption under section 11 of the Income-tax Act, 1961 in view of the condition in section 12A(1)(ba) and the CBDT circular dated 23.04.2019.

Analysis: The Tribunal examined the statutory requirement in section 12A(1)(ba) read with sections 139(1) and 139(4) and noted the CBDT clarification dated 23.04.2019. The assessee, a charitable educational institution, filed its return and audit report on 31.05.2021 which was within the due date prescribed under section 139(4) for the assessment year concerned. The Tribunal considered relevant coordinate-bench decisions and distinguished the departmental decision relied upon by noting it was rendered ex-parte without considering the CBDT circular. The Tribunal held that filing the return within the time allowed under section 139(4) satisfies the condition in section 12A(1)(ba) for claiming exemption under section 11, in light of the CBDT circular and applicable amendments.

Conclusion: The assessee is entitled to claim exemption under section 11 of the Income-tax Act, 1961 for the assessment year in question because the return was filed within the time allowed under section 139(4), satisfying the condition in section 12A(1)(ba); the appeal is allowed and the assessing officer is directed to grant the benefit of section 11.

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