AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 1348
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....ddition of Rs.6,00,000 on account of unverified payment of salary. 3. The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing." 2. Succinctly stated, the assessee trust is a charitable society registered u/s.12A of the Act with the CIT(Exemption), Raipur. The registration granted to the assessee society vide order dated 20.04.2005 is effective from 01.04.2005. 3. The assessee society had e-filed its return of income u/s.139(1) of the Act for A.Y.2016-17 on 10.10.2016, declaring nil income (after claiming exemption u/s.11 of the Act). Subsequently, the case of the assessee society was selected for scrutiny assessment u/s. 143(2) of the Act. 4. The A.O while framing assessment declined the assessee's claim for exemption u/s.11(2) of the Act, for the reason that the same was to be allowed only if Form 10B a/w. return of income were furnished electronically within the "due date" specified u/s.139(1) of the Act. For the sake of clarity, the reasons for declining the assessee's claim of exemption u/s.11 as stated in the assessment order u/s. 143(3), dated 10.12.2023 are culled out as under (relevant extract) : ".......The ....
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....the A.O. made an addition of the same u/s. 13(2)(c) r.w. Sec. 13(3) of the Act. 5. On appeal, the CIT(Appeals) did not find favour with the contentions advanced by the assessee. It was observed by the CIT(Appeals) that the assessee society had filed Form 10B r.w.r. 12(2) of the Income Tax Rules, 1962 on 06.12.2018 i.e. much after the "due date" for filing of its return of income u/s.139 of the Act. Also, the CIT(Appeals) observed that the assessee had failed to approach the jurisdictional commissioner/Director of Income tax to get the delay involved in filing of Form 10B condoned. Also, the CIT(Appeals) upheld the disallowance made by the A.O of the unsubstantiated claim for deduction of salary expenses of Rs.6 lacs that was raised by the assessee society. Accordingly, the CIT(Appeals) on the basis of his aforesaid observations dismissed the assessee's appeal. 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal. 7. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pres....
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....d/2022 dated 05.07.2023. 9. Apropos the disallowance of the assessee's claim for deduction of salary expenditure of Rs.6 lacs, the Ld. AR submitted that the same was the salary paid to Dr. Ashish Dubey towards consultancy/professional services that were rendered by him in the assessee's hospital. On being queried as to why no supporting documentary evidence substantiating authenticity of the aforesaid claim of salary expenditure was filed in the course of the proceedings before the lower authorities, the Ld. AR rebutted the observations recorded by the A.O in the assessment order to the said effect. It was submitted by the Ld. AR that complete details of the salary paid to Dr. Ashish Dubey a/w. nature of services that were rendered by him were furnished by the assessee vide his reply dated 25.11.2018 in response to the notice issued by the A.O u/s. 142(1) of the Act, dated 19.06.2018, Page 14 to 21 of APB. The Ld. AR further submitted that as the A.O had not specifically called for any documentary evidence to substantiate the authenticity of the aforesaid claim of expenditure; therefore, for the said reason, the same could not be filed before him. The Ld. AR further in order to bu....
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....ection (2) of section 288 and the person in receipt of the income is required to furnish along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. 2. As per Rule 17B of the Income-tax Rules, 1962 (hereafter 'Rules') the audit report of the accounts of such a trust or institution is to be furnished in Form No. 10B. As per Rule 12(2) of the Rules, such audit report is to be furnished electronically. The failure to furnish such report in the prescribed form along with the return of income results in disentitlement of the trust from claiming exemption under sections 11 and 12 of the Act. 3. Representations have been received by the Board/field authorities stating that Form No. 10B could not be filed along with the return of income for AY 2016-17 and AY 2017-18. It has been requested that the delay in filing of Form No. 10B may be condoned. Previously, vide instruction in F. No. 267/482/77-IT(part) dated 09-02-1978, the CBDT had authorized the ITO to accept a belated audit report after recording reasons in cases where some dela....
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....2. As the date specified u/s. 139 of the Act for filing of return of income in the case of the assessee society before me for A.Y.2016-17 was 17.10.2016 (supra), while for it had e-filed/uploaded the "audit report" in Form 10B on 06.12.2018, which is much beyond the said specified date, therefore, it's case would clearly fall beyond the scope and gamut of Para 4(i) of the CBDT Circular No. 10 dated 22.05.2019. On the basis of the aforesaid facts, I am of the considered view that the case of the assessee society before me would not fall within the meaning of Para 4(i) of the CBDT Circular (supra.). 13. As the assessee's case with respect to condonation of delay in filing of Form 10B would not be covered by Para 4(i) (supra), therefore, the same would fall within the sweep of Para 4(ii) of the CBDT Circular No.10 (supra), which, as observed by me hereinabove, would be applicable to all other cases prior to A.Y.2018-19 where Form 10B is belatedly filed. Accordingly, I am of the considered view that the case of the assessee due to non-satisfaction of the conditions contemplated in Para 4(i) of CBDT Circular No. 10(supra) would fall within the sweep of Para 4(ii) of the said circular (....
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....d conditions provided in Para 4(i) (supra), therefore, the order of ITAT, Ahmedabad "C" Bench in the case Shree Charitable Trust Vs. ITO (Exemption) (supra) would not carry its case any further. Thus, the Ground of appeal No.1 raised by the assessee society is dismissed in terms of the aforesaid observations. 16. I shall now deal with the grievance of the assessee society that both the lower authorities had erred in declining/sustaining the disallowance of the assessee's claim for salary expenditure of Rs.6 lacs. As is discernible from the records, the assessee had claimed to have paid a salary of Rs.6 lacs to Dr. Ashish Dubey, cardiologist (trustee of the assessee society). As the assessee society had failed to place on record documentary evidence to substantiate the authenticity of its claim of salary expenditure, therefore, the A.O had disallowed the aforesaid expenditure made with respect to a person falling within the meaning of Section 13(3) of the Act. Although the assessee society vide its reply dated 25.11.2018 (supra) had filed with the A.O the details as regards the aforesaid expenditure a/w. nature of services rendered by Dr. Ashish Dubey but had failed to substantiate....