Case Number: ITA 2161/DEL/2022
Appellant: Conference of Religious India, New Delhi
Respondent: Ward Exemption 1(3), New Delhi
Assessment Year: 2020-21
Date Filed: September 5, 2022
Order Type: Final Tribunal Order
Date of Order: October 13, 2022
Pronounced On: October 13, 2022
Summary:
This case involves the Conference of Religious India, a charitable institution based in New Delhi, which filed an appeal against the Income Tax Officer, Ward Exemption 1(3), New Delhi. The primary issue revolves around the denial of exemption under section 11 of the Income-tax Act, 1961, due to a delay in filing the return of income.
The Conference of Religious India (CRI), located at CRI House, Masigarh, Jamia Nagar, Okhla, New Delhi, is a charitable institution registered under section 12A of the Income-tax Act. For the assessment year 2020-21, the CRI filed its return of income on February 23, 2021, claiming exemption under section 11. The return was accompanied by the audit report in Form No. 10B and Form No. 10, showing an accumulation of income of Rs. 34 lakhs.
The return of income was processed under section 143(1) of the Act, but the benefit of section 11 was disallowed, and the gross receipts of Rs. 85,59,512 were taxed. The CRI challenged this order before the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC). The CRI argued that the return was filed before March 31, 2021, the last date for filing a belated return, and relied on the Central Board of Direct Taxes (CBDT) instruction F. No. 173/193/2019-ITA-I dated April 23, 2019.
The CRI, represented by Sh. K. V. S. R. Krishna, CA, contended that the return was filed within the time allowed under section 139 of the Act, considering the extensions due to the COVID-19 pandemic. They emphasized that the audit report in Form No. 10B was filed on December 19, 2020, and Form No. 10 was filed on December 22, 2020. The CRI argued that the delay of 7 days beyond the extended due date of February 15, 2021, should be condoned, especially given the Supreme Court’s extension of the period of limitation across the board due to the pandemic.
The Department, represented by Sh. Om Parkash, Sr. DR, supported the CIT(A)’s decision to deny the exemption, arguing that the return was filed beyond the due date as mandated in section 139(1) of the Act.
The Tribunal, presided over by Sh. N.K. Billaiya, Accountant Member, reviewed the submissions and the materials on record. The Tribunal noted that the CRI filed its return on February 23, 2021, just 7 days beyond the extended due date of February 15, 2021, but within the final date for filing a belated return of March 31, 2021.
The Tribunal referred to the CBDT instruction F. No. 173/193/2019-ITA-I dated April 23, 2019, which clarified that returns filed within the time allowed under section 139 are eligible for the benefits of section 11. The Tribunal concluded that the CIT(A) misinterpreted the CBDT instruction and the provisions of the Act, resulting in an erroneous denial of the exemption.
The Tribunal allowed the appeal in part for statistical purposes, directing the CIT(A) to reconsider the return of the CRI and allow the exemption under section 11, as per the provisions of the law and the CBDT circular. The Tribunal emphasized the importance of procedural correctness and fairness, especially during the challenging pandemic period.
Order Pronounced: October 13, 2022
Judge: Sh. N.K. Billaiya (Accountant Member)
The detailed order underscores the need for accommodating procedural delays during exceptional circumstances like the COVID-19 pandemic and ensuring that charitable institutions receive the benefits they are entitled to under the law.
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