Non-Appearance of Form 10B on E-Portal due to Technical Glitch not Taxpayer Mistake: ITAT Remands u/s 11 Exemption Matter [Read Order]

The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) remanded exemption under Section 11 of the Income Tax Act matter due to the non-appearance of Form 10B on the E-portal caused by a technical glitch, not the assessee’s fault.

Arya Vysya Sangha, the assessee was a registered charitable trust under section 12A of the Income Tax Act, 1961. The assessee filed income tax returns for the Assessment Years (AY) 2017-18 and 2019-20 declaring nil and claiming exemptions under sections 11 and 12 of the Income Tax Act.

The claim was rejected during the return processing on 18.05.2020, resulting in a tax demand of Rs. 22,03,397. The assessee appealed before the First Appellate Authority (FAA). The assessee's appeal was dismissed due to failure to submit Form 10B within the prescribed time and a lack of details regarding the registration under section 12A in the income tax return.

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Aggrieved by the FAA order, the assessee challenged the FAA order before the Bangalore, ITAT arguing that Form 10B was duly submitted, evidenced by a screenshot from the portal. Further, the assessee’s counsel claimed that the non-display of the form on the portal was a technical issue outside their control.

On the contrary, the revenue counsel submitted that the assessee did not submit the registration details under section 12A of the Income Tax Act in filing income tax returns, so the Centralized Processing Centre (CPC) was justified in denying the exemption.

The revenue counsel argued that the non-submission of Form 10B within the prescribed time on the e-filing portal was also sufficient grounds to disallow the claim for exemption.

The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Keshav Dubey (Judicial Member) observed that the assessee is a registered society under section 12A of the Income Tax Act and had been compliant in filing the required forms, including Form 10B, before the due date.

The tribunal observed that while Form 10B was digitally signed on 16.09.2019, the reason for its non-appearance on the e-filing portal was unclear and appeared to be a technical issue within the department's system.

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Considering the totality of the case, the tribunal remanded the matter back to the CIT(A) for fresh consideration. The CIT(A) was directed to re-examine the evidence presented by the assessee, particularly the Form 10B submission, and decide under the law.

Thus, the appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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