TaxTMI 
TaxTMI 
2025 (5) TMI 2127
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....rudwara Sachkhand Shri Hazur Apchalnagar Sahib Act, 1956 by Notification in the official Gazette. The main object of the Trust is for religious purpose consisting of the everyday pooja, utsav of Sikh Gurudwara Suchkhand Shri Hazur Sahib, Nanded. The Trust is also running an educational institute in the name of "Bhakti Niwas" at Trimbakeshwar for the devotees who visit to Trimbakeshwar for performing various religious functions. The Trust is registered under the Charitable and Religious Trust Act, 1920 (Central Act XIV of 1920) and the Bombay Public Trusts Act, 1950. The Management of the Trust is looked after by the District Collector of Nanded, Superintendent of the Gurudwara as ex-officio member and three members nominated by the Board at its first meeting in the prescribed manner from amongst the Sikhs of Nanded. The rules and regulations of the trust are regulated by the Charity Commissioner of Maharashtra. The assessee trust filed its return of income for the year under consideration on 24.01.2017 declaring a total income at Rs.Nil. The case was selected for scrutiny under CASS for AY 2016-17 and accordingly, statutory notices under section 143(2) and 142(1) of the Income Tax ....
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.... decision of the Tribunal in assessee's own case for assessment year 2014-15 was also brought to the notice of the Ld. CIT(A) / NFAC. Based on the arguments advanced by the assessee and following the decision of the Coordinate Bench of the Tribunal in assessee's own case, the Ld. CIT(A) / NFAC deleted the addition made by the Assessing Officer on the ground of late filing of Form 10BB. He further noticed that there is no material brought on record by the Assessing Officer in support of his observation that the funds of the trust were not properly utilized, managed and supervised and held that the observation of the Assessing Officer is a bald observation. He further held that the filing of audit report in the prescribed form before completion of assessment proceedings is sufficient compliance under the provisions of the Act. He accordingly deleted the addition made by the Assessing Officer by observing as under: "7.1. I have carefully gone through the assessment order u/s 143(3), Grounds of appeal and statement of facts, the findings of AO in the assessment order and the written submissions and case laws uploaded by the assessee in support of the Grounds of appeal. All Grounds....
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....e is a religious and charitable trust engaged in the work of managing the administration and functioning of Sikh Gurdwara Sachkhand Shri Hazur Sahib, Nanded. It is to be noted that "The Nanded Sikh Gurudwara Sachkhand Hazur Apchchalnagar Sahib" as anonymous body constituted by the Govemment under the Nanded Sikh Gurudwara Sachkhand Hazur Apchchalnagar Sahib Act, 1956 by way of notification in the official Gazette of the Hyderabad Government vide Gazette Extraordinary No. 216. It is registered under the Charitable and Religious Trusts Act, 1920 (Central Act XIV of 1920) and the Bombay Public Trusts Act, 1950. The respondent-assessee filed the return of income for the assessment year 2014-15 declaring Rs. Nil income after claiming exemption of income under the provisions of section 10(230)(v) of the Income-tax Act, 1961 (the Act) Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax. Exemption Circle Aurangabad (the Assessing Officer) vide order dated 30-12-2016 passed us 143(3) of the Act of total income of Rs. 24,33,51,386/- denying the claim for exemption of Income u/s 10(23C) (v) on the ground that the respondent-assessee trus....
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....st. He further submitted that the ld. CIT(A) ought not to have held that the filling of the audit report before completion of the assessment proceedings constitutes a sufficient compliance under the provisions of the Act, as it is contrary to the plain provisions of the Act which stipulates under second proviso and third proviso of section 10(23C)(v) of the Act the audit report should be filed within due date of filing return of income u/s 139 of the Act. He further contended that the Id. CIT(A) ought not to have held that the findings of the Assessing Officer that the funds were not properly utilized, administered and supervised is bald in the absence of any material on record controverting the findings of the Assessing Officer He further submitted that the respondent-assessee trust was granted registration u/s 12AA only on 15-5-2017 which is applicable from financial year 2016-17 onwards Thus, in the absence of any registration u/s 12AA, the respondent-assessee trust is not entitled for benefit of exemption under the provisions of section 10(23C)(v) of the Act. 7. On the other hand, ld. AR for the respondent-assessee trust submitted that the observation of the ld. CIT(A) that ....
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.... requirement of law as the provision of Act is a directory in nature. Thus, the appeal of the respondent-assessee trust was allowed by the ld. CIT(A). 10. We find from maternal on record that the observation made by the Assessing Officer that the funds of the trust were not properly utilized, managed and supervised is mere bald observation as there was no material brought on record in support of the above allegation, Further, we find that the funds of the trust are managed by the member of the trustees headed by the District Collector, no mala fide can be attributable to Government authorities in the absence of any evidence. The Assessing Officer holding the position of quasi judicial authority, should refrain from making bald allegation without bringing on record conclusive evidence in support of such allegation From reading of the assessment order, it appears that the Assessing Officer is carried away by the fact that the respondent-assessee trust generated surplus of funds of 41% of gross receipts and inferred that the funds were not utilized for the object for which the respondent-assessee trust was formed. The Hon'ble Supreme Court in the case of Queen's Educational....
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....he exemption u/s 10(23C)(v) of the Act. In view of findings given by us supra, none of reasons assigned by Assessing Officer, while denying the claim of exemption u/s 10(23C)(v) can be sustained in the eyes of law. We do not find any merits in the grounds of appeal filed by the Revenue. Accordingly, the grounds of appeal filed by the Revenue stand dismissed. 12. In the result, the appeal filed by the Revenue stands dismissed." 7.2.2. As seen above, the Hon'ble ITAT Pune has held that there was no material brought on record by the AO in support of his observation that the funds of the trust were not properly utilized, managed and supervised and held the observation of the AO as a bald observation. It further held that filing of audit report in the prescribed form before completion of the assessment proceedings is sufficient compliance under the provisions of the Act. 7.2.3. In view of the above facts and respectfully following the judgment of Hon'ble ITAT Pune (supra) and further in view of CBDT Circular 19/2020, addition of Rs. 28,02.93,045/- on the ground of late filing of Form 10BB is hereby deleted. Accordingly, Grounds of appeal are allowed. 8. In the result....
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....ing authority the required form 10B during the assessment proceedings. However, the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai v. Dilip Kumar & Company & Ors. in Civil Appeal No 3327 of 2007 has held that the exemption provisions are to be visited with strict interpretation of the statute. 8. Referring to the decision of the Hon'ble Supreme Court in the case of Principal Commissioner of Income vs M/s Wipro Limited in Civil appeal No. 1449 of 2022, he drew the attention of the Bench to the following observations of the Hon'ble Supreme Court: "14. In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under Section 10B (8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in Section 10B (8) of the IT Act. We hold that for claiming the benefit under Section 10B (8) of the IT Act, the twin conditions of furnishing a declaration before th....
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....rt in the said decision has held that charitable trust cannot be denied benefit of section 11 solely for not filing audit report in Form No.10B, as it is only a procedural requirement. 14. Referring to the decision of the Delhi SMC Bench of the Tribunal in the case of B.R. Hospital Research Institute vs. ITO (2024) 167 taxmann.com 389 (Delhi - Trib.), he submitted that the Tribunal, relying on various decisions, has held that conditions of filing Form 10B for availing benefit under section 11 are directory in nature and not mandatory; therefore, where assessee had not filed audit report in Form 10B along with return of income, however filed the same later on before Commissioner (Appeals), claim of assessee for exemption under section 11 was to be allowed. 15. So far as the decision in the case of Viswanath Traders vs. Union of India (supra) relied on by Ld. DR is concerned, he submitted that the case was relating to Bihar Goods & Services Tax Act, 2017. Further, the Hon'ble Supreme Court has dismissed the SLP filed. Therefore, the same is not applicable. 16. So far as the decision of the Hon'ble Bombay High Court in the case of Little Angels Education Society Vs. Union of In....
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....9. So far as the observations of the Assessing Officer that the funds of the assessee trust are not properly utilized, managed and supervised as required under the provisions of section 10(23C)(v) of the Act is concerned, we find the Ld. CIT(A) / NFAC following the decision of the Coordinate Bench of the Tribunal in assessee's own case has given a finding that the observation of the Assessing Officer is a bald observation. We find the Revenue is not in appeal on this issue as per the grounds of appeal and therefore, we are not concerned with the same. 20. So far as the grievance of the Revenue that the Ld. CIT(A) / NFAC has erred in allowing the appeal of the assessee by holding that filing of audit report in the prescribed form before completion of the assessment proceedings is sufficient compliance under the provisions of the Act is concerned, we find the Ld. CIT(A) / NFAC while deciding the issue has followed the decision of the Coordinate Bench of the Tribunal in assessee's own case for assessment year 2014-15. We find the Hon'ble Gujarat High Court in the case of CIT (Exemptions) vs. Laxmanarayan Dev Shrishan Seva Khendra (supra), while deciding an identical issue aft....
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....the Hon'ble Supreme Court held that it was mandatory on part of the assessee to file declaration before the due date of filing of return under Sub-section (1) of Section 139 of the Act, whereas, in the facts of the said case the assessee filed such undertaking along with the revised return under Sub-section (5) of Section 139 of the Act and in such facts, the Hon'ble Supreme Court held that the twin conditions prescribed under Section 10B(8) of the Act was mandatory to be fulfilled and it cannot be said that though the declaration is mandatory, the filing of such declaration within the due date of filing of return under Sub-section (1) of Section 139 of the Act would be directory. 7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) in Special Civil Application No.6097 of 2020 decided on 09th December, 2020 as well as the decision in case of Social Security Scheme of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this....
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....nment under Chapter 29 which attracts standard rate of customs duty. The adjudicating authority, namely, the Assistant Commissioner of Customs, distinguished Sun Export Case (supra), while accepting the plea of the department to deny the concessional rate. The Commissioner of Customs (Appeals) reversed the order of the Assistant Commissioner and came to the conclusion that Sun Export Case (supra) was indeed applicable. The department then approached the Customs, Excise and Service Tax Tribunal (CESTAT), which affirmed the order of the Commissioner of Customs (Appeals). Aggrieved the assessee filed appeal before the Hon'ble Supreme Court. Under these circumstances, the Hon'ble Supreme Court has held as under: "52. To sum up, we answer the reference holding as under: (1) Exemption notification should be interpreted strictly, the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be int....