TaxTMI 
TaxTMI 
2025 (5) TMI 1702
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....ond the due date of filing of income tax return u/s 139(4C) and also erred in conforming the addition for the reason that the assessee society has not filed the return of income. He failed to appreciate that the provisions of granting exemption u/s 10(23C)(vi) are beneficial provisions and have to be interpreted in favour of the assessee society. 3. On the facts and circumstances and in law, the Ld. CIT(A) erred in relying the case law which was related to the claiming of deduction u/s 80P of the Act and erred in properly appreciating the legal position that claiming of deduction u/s 80P is not identical as to the exemption u/s 10 of the Act. 4. On the facts and circumstances and in law the Ld. CIT(A) failed to see that even the Ld. AO has not adjusted the Deficit of Harda Nagar Bal Vikas Samiti and only assessed the surplus generated by both the school institutions. He also dismissed the ground relating to the charging of tax u/s 115BBE on the addition without considering that the addition was not under section 69A or 69C." 2. The precise facts of present appeal, as culled out from assessment- order and as per submissions made by Ld. AR for assessee, are such ....
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....tain documents, which is acknowledged by AO. The assessee also filed a copy of aforesaid Order dated 10.08.2018 passed by CIT(E) giving approval for exemption u/s 10(23C)(vi) and requested the AO to allow exemption. After considering assessee's submissions and documents, the AO, however, computed total income at Rs. 59,02,063/- as under without giving exemption requested by assessee: Return income (not filed) Rs. Nil Additions:- SARASWATI VIDYA MANDIR: Net surplus as per Income & Expenditure account Expenditure disallowed - Donation Rs. 30,44,864/- Rs. 1,33,500/- SARASWATI SHISHU MANDIR: Net surplus as per Income & Expenditure account Expenditure disallowed - Donation Rs. 27,19,994/- Rs. 3,705/- Total assessed income Rs. 59,02,063/- 4. Aggrieved, the assessee carried matter in first-appeal before CIT(A) but did not get any success. Now, the assessee has come in next appeal before us. 5. We have heard learned Representatives of both sides and considered their submissions and also perused the case-record. 6. Ld. AR for assessee submitted that the assessee's main grievance in present case is such that ....
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....er in event reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a tax payer where proceedings or other particulars before them indicate in some refund or relief is due to him. This attitude would in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed Ly law, officer's should:- (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs." 7.2 Ld. AR relied upon a decision of ITAT, Indore in Akshay Academy Vs. ITO, NFAC, Delhi (2024) 167 taxmann.com 382 (Indore - Trib.) wherein the assessee filed return of income claiming exemption u/s 10(23C)(iiiad) and during assessment-proceedings, the assessee informed AO that the exemp....
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....C), as noted above, that the assessees have been made dis-entitled from claiming exemption u/s 10(23C) from AY 2022-23 for non-filing of return u/s 139(4C). But there was no provision, prior to AY 2022-23, denying exemption to assessee in such cases. Therefore, the lower- authorities are clearly wrong in denying exemption to assessee on the premise of non-filing of return. 9. Having explained thus, Ld. AR also drew us to Para 6.3.2 of impugned order passed by Ld. CIT(A), reading as under: "6.3.2 In this connection the decision rendered by the Hon'ble ITAT Bangalaore in the case of Madhu Souharda Pathina ITA No.969/Bang/2023 for A.Y. 2017-18 dated 02.01.2024 is reproduced hereunder: "9. It is clear from the above section that for claiming deduction under Chapter VIA under the head, "Deductions to be made in computing total income", which covers section 80P also, the assessee has to file return of income. However, the assessee did not file return of income at all and therefore the assessee is not eligible for deduction u/s. 80P of the Act. The Hon'ble Kerala High Court in the case of Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. C....
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....s trite that a provision for deduction or exemption under a taxing Statute has to be strictly construed against the assessee and in favour of the Revenue. Thus viewed, a failure on the part of an assessee to comply with the pre-condition for obtaining the deduction cannot be condoned either by the statutory authorities or by the courts. Though the decision is rendered in respect of claim of deduction u/s 80P of the Act the case law is squarely applicable to the facts of the case, wherein also no return of income has been filed but requested to allow exemption u/s 10(23C)(vi). In view of the discussion made above and the decision rendered by the Hon'ble Kerala High Court duly relied by the Hon'ble ITAT Bangalore the disallowance made by the AO is upheld. This is not a issue of advantage taken by AO of ignorance of appella appellant, therefore the stand of the appellant has no merits. Ground no.1 of appeal is dismissed." Ld. AR submitted that the CIT(A) has made a wrong adjudication by relying upon decision of ITAT, Bangalore. He submitted that the said decision dealt a case of deduction u/s 80P whereas the present case of assessee concerns with exemption u/s 10(2....
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....ed that the CIT(E) passed his order on 10.08.2018 and the condition imposed by him, even if any credence to be given, shall have prospective application only. In the case of assessee, there was no way of filing return on or after 10.08.2018 for AY 2017-18, therefore it is impossible to satisfy the condition imposed by CIT(E). Alternatively, Ld. AR submitted that the assessee has no problem at all in filing a physical return to AO if the bench directs so or the AO desires so. 13. We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which our attention has been drawn. The core dispute in present case relates to the allowability of exemption u/s 10(23C)(vi). Admittedly, the assessee is having requisite approval granted by CIT(E) vide order dated 10.08.2018 for AY 2017-18 under consideration. The only reason for denial of exemption advanced by lower-authorities is that the assessee has not filed return of income in terms of section 139(4C). It is a fact that the assessee has not filed any return of income to Income-tax Department for AY 2017-18 under consideration. But the Ld. AR for assessee has giv....
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....(b) of the Act. Thus, what we have to adjudicate is, whether assessing officer was right in not applying the provisions of section 11 while computing income of the assessee. It is an admitted fact that the assessee is a society, who has been granted registration under section 12A of the Act by CIT looking to its objects of charitable purpose, i.e., it is engaged in imparting education and running various educational institutions. Thus, the registration u/s 12A is fait accompli and consequently the computation of income has to be in accordance with sections 11 to 13 of the Act. The assessee society had not filed its return of income and it was only in response to notice issued by the Assessing Officer under section 148, the assessee has filed its return of income alongwith the audited Balance Sheet and Profit & Loss Account. Now, whether the income of the assessee society is to be computed in accordance with the provisions of section 11 of the Act, as it has not filed the return as required under section 139(4A) of the Act, but has filed return in response to notice under section 148. 20. Section 139 falls under Chapter XIV-'Procedure for assessment' which provides ....
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....f furnishing the return within the time allowed under section 139(4A) has been made applicable from A.Y. 2018-19 as has been specifically stated in the Finance Act, 2017 and not for the A.Y. under consideration. We are also not in agreement with the contention of the Ld. DR that this amendment is clarificatory in nature. As rightly pointed out by the Ld. Counsel that this amendment has been made by the Finance Act, 2017 effective from A.Y. 2018-19, meaning thereby that this clause has not been made applicable even for the A.Y. 2017-18, the return of which were still to be filed. Thus, the Legislature has thought fit to make this amendment applicable from next assessment years onwards and not even to the current A.Y. 2017-18." [Emphsis supplied] (ii) ITAT, Hydrabad in Anjuman E Khadimul Muslimeen Refah-E Aam Vs. DCIT (2024) 167 taxmann.com 74 (Hyderabad - Trib.): "1. We have heard the rival contentions, perused the material available on record and gone through the order of the Ld. First Appellate Authority. The revenue authorities did not allowed the exemption claimed u/s 11 of the Act of Rs.82,83,576/- contending that the assessee had not filed the ROI....
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....fied u/s 139(1) of the Act. 4. The Ld. DR could not point out any relevant provision or section under the Income Tax Act which disentitles the assessee from claiming exemption u/s. 10(23C)(iiiab) of the Act for non-filing/late filing of the income tax return. Therefore, the action of the lower authorities in denying the exemption to the assessee on this ground is not sustainable. 5. The second issue as to whether the filing of the return in wrong form i.e. Form u/s 139(4D) instead of Form u/s. 139(4C) becomes irrelevant. In view of the above stated legal position the action of the lower authorities in denying exemption to the assessee cannot be held to be justified. The impugned order of the Ld. CIT(A) is set aside and the Ld. AO is directed to grant exemption to the assessee as claimed u/s. 10(23C)(iiiab) of the Act. 6. In the result, the appeal of the assessee stands allowed." 15. From the judicial decisions discussed above, we can safely conclude that the amendment in section 10(23C) by way of insertion of 20th proviso prescribing dis-entitlement of exemption u/s 10(23C)(vi) for non-filing of return, is applicable from AY 2023-24 and the sa....