Circular no. 7/2018 doesn’t empowers CIT to exempt assessee from filing of Form 10 with AO: ITAT

Case Details: Navodaya Education Trust v. DCIT - [2021] 130 taxmann.com 256 (Bangalore - Trib.)

Judiciary and Counsel Details

• • • Chandra Poojari, Accountant Member and Smt. Beena Pillai, Judicial Member
    • Rahul Kaul, Adv. for the Appellant. K. Devarathna Kumar, CIT (DR) (ITAT) for the Respondent.

Facts of the Case

Assessee-trust filed its return of income electronically, declaring nil income. An amount of Rs. 6.99 crores were shown as set apart for application towards specified purposes as per provisions of section 11(2). Return was processed, and set apart amount was added to income of assessee on the ground that Form 10 was not filed on time.

According to the assessee, it had not filed Form 10 with the jurisdictional AO as the ACIT, Raichur had informed the assessee that the same was not required to be filed before his office but had to be filed online in the Income-tax portal. Whereas, in the Income-tax portal, the facility to file Form 10 online was not available at that time. Thus, it was not filed along with the return of income and filed for the first time while submitting the rectification application.

ITAT Held

The Tribunal held that it was an admitted fact that the assessee had not filed Form 10 before the AO within the due date of filing of return of income for AY 2015-16. It was also an admitted fact that the portal of the Income-tax Department did not contain any facility for online filing of Form 10, in AY 2015-16, and it was only with effect from 1-4-2016 that this facility was made available for tax filers.

As per CBDT Circular No. 7/2018, the Commissioner could condone the delay in filing Form 10 electronically with the department. While entertaining such application, the Commissioner is required to satisfy that the assessee was prevented by reasonable cause in filing Form 9A and Form 10 within the stipulated time. But this Circular does not preclude the assessee from filing Form 10 manually before the jurisdictional AO.

The assessee is not exempted in filing Form 10 manually by this Circular. It only gives power to the Commissioner to permit the assessee to file Form 10 electronically belatedly. However, in the instant case, the assessee had not filed Form 10 manually within the stipulated time, i.e., before the due date for filing return of income and therefore, the assessee couldn’t avail the benefit of CBDT Circular to cover its own mistake.

Case Review

• • Shree Dadar Jain v. ITO [2019] 111 taxmann.com 272 (Mum. – Trib.) (para 29) distinguished

List of Cases Referred To

• • CIT v. Anjuman Moinia Fakharia [1994] 75 Taxman 517/208 ITR 568 (Raj.) (para 12)
  • Chandraprabhuji Maharaj Jain v. Dy. CIT (Exemption) [2019] 110 taxmann.com 11/266 Taxman 399 (Mad.) (para 12)
  • Nagpur Hotel Owners Association v. CIT [Appeal case No. 1662 of 2019] (para 12)
  • CIT v. Matriseva Trust [2003] 128 Taxman 261/[2000] 242 ITR 20 (Mad.) (para 14)
  • CIT v. Maharana of Mewar Charitable Foundation [1986] 29 Taxman 476/[1987] 164 ITR 439 (Raj.) (para 14)
  • Padanilam Welfare Commissioner Trust v. Dy. CIT [2012] 20 taxmann.com 113 (Chennai) (para 14)
  • CIT v. Institute of Banking Personnel Selection (IBPS) [2003] 131 Taxman 386/264 ITR 110 (Bom.) (para 14)
  • Bank of America N.T. & S.A. v. Dy. CIT [1993] 66 Taxman 426/200 ITR 739 (Bom.) (para 19)
  • Chandrakant N Tolia v. Asstt. CIT [2009] 316 ITR 312 (Mad.) (para 19)
  • Khatau Junker Ltd. v. K.S. Pathania [1992] 61 Taxman 157/196 ITR 55 (Bom.) (para 19)
  • CIT v. Sitaram Textiles Ltd. [2000] 113 Taxman 241/[2001] 248 ITR 139 (Ker.) (para 19)
  • Coates v. Dy. CIT [1995] 214 ITR 498 (Cal.) (para 19)
  • CIT v. Shikharchand Jain [2003] 132 Taxman 109/263 ITR 221 (MP.) (para 19)
  • CIT v. Manubhai M Patel [2008] 296 ITR 143 (Guj.) (para 19)
  • CIT v. PK Bhardwaj [2006] 153 Taxman 321/279 ITR 326 (Punj. & Har.) (para 21)
  • CIT v. Gujarat State Export Corpn. Ltd. [2006] 151 Taxman 118/[2005] 279 ITR 477 (Guj.) (para 21)
  • Parle Hindu Devalaya Mandal v. Dy. CIT [IT Appeal No. 766 (Mum.) of 2019, dated 4-3-2020] (para 24)
  • Shree Dadar Jain v. ITO [2019] 111 taxmann.com 272 (Mum. – Trib.) (para 25)
  • CIT v. Jai Parabolic Springs Ltd. [2008] 172 Taxman 258/306 ITR 42 (Delhi) (para 39)
  • Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1/284 ITR 323 (SC) (para 39).