Exemption Cannot Be Denied For Non Filing of Form 10B: ITAT Allows ₹1.21 Crore Relief Claim Of IAPPD [Read Order]

The Income Tax Appellate Tribunal granted relief of ₹1.21 crore,holding that exemption cannot be denied merely for alleged non-filing of Form 10B when the assessee was actually required to furnish Form 10BB.

The assessee, a charitable institution had filed its return of income for Assessment Year 2017-18 declaring nil income while claiming exemption under the Income tax Act. While processing the return of income under Section 143(1) of the Income tax Act.

The Central Processing Centre (CPC) had denied the exemption claimed by the assessee under Section 11 of the Income tax Act for ₹1,21,56,852, as the assessee had failed to furnish the audit report in the form of Form 10B for the relevant assessment year.

The assessee had filed a rectification application under Section 154 of the Income tax Act, which was rejected. The Commissioner of Income Tax (Appeals) had also agreed with the CPC's view that the assessee had failed to furnish the audit report in the form of Form 10B for the relevant assessment year.

The assessee submitted that as it was registered under Section 10(23C)(iv) therefore the requirement was to fill up the form in 10BB and not 10B. The contention was that the form had already been furnished and the denial of the exemption by CPC had also been erroneous.

The assessee further argued that during processing under Section 143(1), adjustments cannot be made on debatable issues relying on the decision of the Rajesh Jhaveri Stock Brokers Pvt. Ltd. v. ACIT.

After considering the submissions and the facts and record the Tribunal comprising Yogesh Kumar [Judicial Member] and Amitabh Shukla [Accountant Member] had ruled that the assessee had fallen under Section 10(23C)(iv) and hence the requirement was to furnish the form in 10BB and not 10B. The Tribunal had also ruled that the exemption had been consistently granted to the assessee in the preceding and subsequent years.

Ignoring the instructions of the lower authorities, the Tribunal directed the Assessing Officer to allow the exemption claim of ₹1,21,56,852, observing that denial of the same on the sole ground that the form 10B had not been filed was not justified in the facts of the case.

The appeal of the assessee was accordingly allowed.

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