TaxTMI 
TaxTMI 
2023 (7) TMI 278
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....red to as the 'Act'). 2. The revenue in this appeal has taken the following grounds of appeal: "1. Whether from the facts and circumstances of the case Ld. CIT(A), NFAC, Delhi has erred in facts by holding that assessee was entitled for exemption despite its failure to file return of income as per the provisions of section 12A(1)(ba) of the Income Tax Act 1961. 2. Whether from the facts and circumstances of the case Ld. CIT(A), NFAC, Delhi has erred in not appreciating the law and provision of section 12A(1)(ba) of the Income Tax Act 1961 clearly mandates that in order to be eligible for exemption return of income has to be filed within the time allowed u/s 139(4A) of the Act." 3. The sole issue taken by the revenue ....
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....eturn of income is filed on 15.11.2018 and audit report on form 10B e-filed on 30.03.2019. Now, before adverting to the grounds, we would first like to go through the relevant provisions which have a direct bearing on the issue of requirement of filing of audit report and income tax return by the trust or institutions registered u/s 12A of the Act. Section 12A(1)(b) and 12(1)(ba) of the Act reads as follows: "Conditions for applicability of sections 11 and 12. 12A. (1) The provisions of section-11 and section-12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- *** *** *** (b) where the total income of the trust or institution as ....
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.... for such purposes, or of income being voluntary contributions referred to in subclause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far may be, apply as if it were a return required to be furnished under sub-section (1).]]" 10. Now, going thr....
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....ned subject stating that while processing of ITR-7 for the A.Y. 2018- 19, in respect of the belated returns filed u/ s 139(4) of the Income Tax Act, 1961 (Act), the following is being communicated u/s 143(1)(a) of the Act:- "As per section 12A(1)(ba) of the Income -tax Act , 1961 the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of section 139, within the time allowed under that section. Otherwise the exemption u/s 11 i.e. sr. no 4(i) and 4 viii in schedule Part BTI is not allowed." Based on this, exemption u/s 11 of the Act has been denied to otherwise eligible trust, thereby creating huge demand. 2. In the matter, th....
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....(4A) of section 139 of the Income -tax Act, if the total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. Amendment to section 12A of the Income-tax has been made so as to provide for additional condition that the person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139 of the Income -tax Act." 3. Thus, for a trust registered U/s 12AA of the Act to avail the benefit of exemption u/s 11 shall inter-alia file its return of income within the time allowed u/s 139 of the Act. Accordingly, orders u/s 143(1)(a) in those cases in which demand has been raised on this issue may ple....