Exemption can’t be denied to Trust merely on ground of Non-Submission of Form 10 Online: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai has held that the tax exemption cannot be denied to the Trust on the ground that it failed to upload Form 10 through online since the provisions of section 139 mandating such filing was implemented w.e.f. 1st April 2016 only.

The assessee is a charitable trust registered under section 12AA of the Income Tax Act, 1961. During the relevant year, the assessee filed its income tax return electronically declaring nil income and claimed around Rs. 22 lakhs as an exemption.

While processing the return of income filed by the assessee, the Central Processing Centre (CPC) denied assessee’s claim of exemption under section 11(2) of the Act since the declaration in Form no 10, was not filed electronically along with the return of income. An application filed by the assessee stating that since Form no 10 online, was furnished manually before the Assessing Officer on the due date of return of income i.e., 28th September 2015, was also rejected by the authorizes.

On appeal, the Tribunal noted that the assessee’s claim of exemption under section 11(2) of the Act has been rejected only due to non-filing of declaration in Form no 10 in electronic mode.

“However, the facts on record clearly reveal that the assessee has filed Form no 10, manually before the Assessing Officer on 28thSeptmber 2015, the very same date the return of income for the assessment year 2015–16, was filed by the assessee. On a perusal of rule–17, as it existed prior to its amendment/substitution by Income Tax (1st Amendment) Rule, 2016, w.e.f. 1st April 2016, the provision only required filing of Form no 10, before the expiry of the time allowed under subsection (1) of section 139 of the Act for furnishing return of income. Only w.e.f. 1st April 2016, amended rule 17 provided for filing Form no.10 electronically before the due date of return of income under section 139(1) of the Act. That being the case, assessee’s claim of exemption under section 11(2) of the Act cannot be rejected only for the reason that Form no.10, was not filed electronically,” the Tribunal concluded.

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