CIT(A) Ignored CBDT Relief for Delayed ITR Filing: ITAT Remands Matter Back for Order Rectification [Read Order]

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) remanded the matter back to CIT(A) for rectification order citing a circular of the Central Board of Direct Taxes (CBDT) which granted relief for delayed filing of Income Tax Return (ITR).

KM Educational & Rural-Development Trust (assessee) is a trust filed Income Tax Return (ITR) belatedly and claimed refund of Rs. 1,96,656. The central processing center (CPC) disallowed the exemption claim stating that the return of income and audit report was not filed within the due date.

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The commissioner of tax (appeals)[CIT(A)] noted that the audit report was filed then after one month the return of income filed by the assessee. The CIT(A) also noted that the audit report should be filed one month prior to the due date of filing of ITR as per provisions of section 44AB of the Income Tax Act.

Despite the CIT(A) noting that the competent authority condoned the delay in filing of the Audit report, upheld the order of CPC denying the exemption under section 11 of the Income Tax Act. Aggrieved by the order of CIT(A), the assessee filed an appeal before ITAT.

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The counsel for the assessee submitted that the ITR filed can be allowed even if it was filed belatedly but within time allowed under section 139(4A) of the Income Tax Act. The counsel relied on the CBDT circular dated 23.04.2019 for the above contention.

Therefore, the counsel argued that the ITR filed within time allowed section 139(4A) can be allowed and sought to direct the CPC to rectify the order.

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The two-member bench comprising Aby T. Varkey (Judicial Member) and Jagadish (Accountant Member) observed that CBDT circular is binding on the income tax authority. The tribunal further observed that the CIT(A) erred in not following the CBDT circular.

Therefore, the tribunal set aside the order and remanded back to the CIT(A) with direction to pass a rectification order. The appeal was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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