The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has remanded a case back to the Assessing Officer (AO) for a fresh assessment concerning the delay in filing an audit report under Form 10BB by a public charitable trust running educational institutions.
The trust, registered under sections 12AA and 10(23C)(vi) of the Income Tax Act, 1961, had filed its income tax returns for the assessment year (AY) 2017-18, declaring ‘NIL’ income. During the assessment, it was found that the trust had failed to file the required audit report in Form 10BB within the stipulated time.
The trust had filed the audit report in Form 10B on March 29, 2018, which was beyond the due date, and had not filed Form 10BB, which is mandatory for claiming exemption under section 10(23C)(vi) of the Act. The trust later submitted Form 10BB electronically on December 4, 2019, and requested condonation for the delay.
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The Assessing Officer (AO) denied the exemption claim and treated the trust’s income as taxable under the rates applicable to an Association of Persons (AOP). Additionally, the AO disallowed a depreciation claim of Rs. 37,08,051 on fixed assets, as these assets had been claimed as the application of income in previous years, allowing only Rs. 1,040 for assets acquired during the year.
Although the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)],, there were no favourable results, and thus the assessee appealed before the ITAT for relief.
The assessee’s counsel contended that the delay in filing Form 10BB should not disqualify the trust from claiming exemption, as the form was available during the assessment proceedings. The representative also pointed out that the CIT(E) had not yet ruled on the condonation request.
The ITAT noted that, according to Circular Nos. 19 of 2020 and 6/2021 issued by the Central Board of Direct Taxes, applications for condonation of delay in filing Form 10BB should be disposed of within three months from the end of the month in which the application is received. But in this case, the CIT(E) had not decided on the trust’s condonation petition by the time of the CIT(A)’s order on May 30, 2024.
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The ITAT set aside the impugned order and remanded the case back to the AO for a fresh assessment, directing the AO to consider the CIT(E)’s decision on the condonation petition once it is made. The ITAT directed the assessee to inform the AO about the status of its condonation application.
The ITAT, comprising Manoj Kumar Aggarwal (Accountant Member) and Manu Kumar Giri (Judicial Member), allowed the assessee’s appeal for statistical purposes.
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