Gujarat High Court
The Commissioner Of Income Tax ... vs Gujarat Energy Development Agency on 15 January, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/35/2024 ORDER DATED: 15/01/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 35 of 2024
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THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) AHMEDABAD
Versus
GUJARAT ENERGY DEVELOPMENT AGENCY
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Appearance:
MS MAITHILI D MEHTA(3206) for the Appellant(s) No. 1
MR CHINTAN DAVE, ADVOCATE FOR HLP ASSOCIATES LLP(9263) for
the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 15/01/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. By this appeal under Section 260A of the Income Tax Act, 1961, the appellant-revenue has proposed the following question as substantial question of law arising out of order dated 19th May, 2023 passed by the Income Tax Appellate Tribunal, 'A' Bench, Ahmedabad (for short 'the Tribunal') in ITA No.209/Ahd/2022 for Assessment Year 2018-19.
"I. Whether in the law and fact & circumstances of the case, the Hon'ble Tribunal was right in upholding the view of the Ld.CIT(A) that furnishing of audit report in Form No.10B alongwith return of income filed, is procedural requirement, especially in view of the decision of the Hon'ble Supreme Court in the case of M/s.Wipro Ltd in Civil Page 1 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined Appeal No.1449 of The appellant submits that in the instant case the tax effect involved is to the tune of Rs.54,00,41,875/- which is above the prescribed monetary limit specified under the CBDT's Circular No. 17/2019 dated 08.08.2019."
2. The brief facts of the case are as under.
2.1 The assessee is a registered charitable Trust under Section 12A of the Income Tax Act, 1961 engaged in the charitable activities for over 40 years.
2.2 In the return of income for Assessment Year 2018-19, the assessee declared total income at Rs.13,54,46,670/- as a business income. The assessee had also shown voluntary contribution of Rs.01,52,03,71,381/-. While processing the return under Section 143(1), Central Processing Centre, Bangalore, disallowed the claim of exemption under Section 11 of the Act as audit report in Form No.10B was not e-filed along with the return of income. An intimation was issued assessing the total income at Rs.01,65,58,18,047/- by making the addition of voluntary contribution to the declared income.
2.3 The assessee challenged the intimation Page 2 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined before CIT (Appeals) who, After considering the fact that filing of audit report in Form 10B was a procedural requirement and in light of various judicial pronouncements on the issue of delayed submission of Form 10B, allowed the claim of the assessee by observing that the audit report was e-filed to Assessing Officer in regular assessment proceeding on 06th December, 2018 and was made available before the Assessing Officer when he passed the assessment order under Section 143(3) on 06th April, 2021.
2.4 The appellant, therefore, being aggrieved by the order passed by the CIT (Appeals), preferred Appeal before the Tribunal.
2.5 The Tribunal, after considering the submissions of both the sides, referred to and relied upon the decision of this Court in the case of Social Security Scheme of GICEA v. Commissioner of Income Tax (Exemptions), Ahmedabad dated 21st December, 2022 in Special Civil Application No.17612 of 2022 wherein this Court has held as under.
"5. Having heard learned advocates for the respective parties and having gone through the material on record, the only question which falls for consideration is whether respondent committed an error in passing the order by not condoning the Page 3 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined delay in filing Form No.10B along with the return filed. In the decision of this Court in Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), this Court has observed that furnishing of audit report along with return filed is to be treated as a procedural requirement. It is though mandatory in nature the substantial compliance is required to be made. In the case of Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption) the assessee had produced the audit report after processing the return under Section 143(1). This Court in the said order has observed that the approach of the authority in these type of cases should be equitable, balancing and judicious. Technically speaking, respondent No.2 might be justified in denying the exemption under Section 11 of the Act by rejecting such condonation application, but an assessee, which is a public charitable trust for past 30 years which substantially satisfies the conditions for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay . Applying the said principle, the petition is allowed. The impugned order passed by respondent dated 12.3.2021 is quashed and aside. The impugned order of rectification under Section 154 of the Act dated 25.1.2019 is also quashed and set aside. The application for condonation of delay filed by the petitioner before the respondent is allowed."
3. Following the above decision of this Court, the Tribunal dismissed the Appeal.
4. Learned advocate Ms.Maithili Mehta for Page 4 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined the appellant submitted that in case of Principal Commissioner of Income Tax-III, Bangalore v. M/s.Wipro Limited of the Hon'ble Supreme Court rendered on 11th July, 2022 in Civil Appeal No.1449 of 2022 it was held that requirement of Section 10B(8) of the Income Tax Act which provides for requirement of furnishing declaration for claiming exemption under Section 10B is mandatory but the time limit within which such declaration is to be filed is also held to be mandatory. Relying upon the aforesaid decision, it was submitted that the assessee ought to have filed the audit report in Form 10B before the due date of filing of the return to claim the exemption under Section 12A of the Act.
5. Reliance placed by the learned advocate for the appellant on the decision of M/s.Wipro Limited (supra) would not be applicable in the facts of the case, as in the facts of the present case, the assessee has claimed the exemption under Section 11 read with Section 12A(1)(b) of the Act which required the assessee to file audit report in Form of 10B which has nothing to do with claiming 100% exemption of total income in respect of newly established 100% Export Oriented Undertakings under Section 10B. Section 10B(8) requires the assessee to file an undertaking Page 5 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined before the due date of furnishing of return of income under sub-section (1) of Section 139 before the Assessing Officer in writing that the provision of Section 10B may not be made applicable to him, otherwise the provision of this Section shall not apply to him for any of the relevant assessment year.
6. Considering the language of the provision of Section 10B(8) of the Act, the Hon'ble Supreme Court held that it was mandatory on part of the assessee to file declaration before the due date of filing of return under sub-section (1) of Section 139 of the Act, whereas in the facts of the said case the assessee filed such undertaking along with the revised return under sub-section (5) of Section 139 of the Act and in such facts the Hon'ble Supreme Court held that the twin conditions prescribed under Section 10B(8) of the Act was mandatory to be fulfilled and it cannot be said that though the declaration is mandatory, the filing of such declaration within the due date of filing of return under sub-section (1) of Section 139 would be directory.
7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of Page 6 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) in Special Civil Application No.6097 of 2020 decided on 09th December, 2020 as well as the decision in case of Social Security Scheme of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious and respondent No.2 might be justified in denying the exemption under Section 11 of the Act being a technical in nature by rejecting such application. But, in the facts of the case, when the assessee has already uploaded the audit report in Form 10B as required under Section 10(23)C read with Section 12A(1)(b) of the Act before the Assessing Officer prior to the original asessment order under Section 143(3) passed on 06th April, 2021.
8. In such circumstances, we are of the opinion that the Tribunal has not committed any error by not following the decision in case of M/s.Wipro Limited (supra) as referred to and relied upon by learned advocate for the appellant revenue, and has rightly followed the decision of Page 7 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024 NEUTRAL CITATION C/TAXAP/35/2024 ORDER DATED: 15/01/2024 undefined this Court in case of Social Security Scheme of GICEA (supra).
9. In view of the foregoing reasons, we are of the opinion that no question of law much less any substantial question of law arises from the impugned order of the Tribunal. The Appeal is accordingly dismissed.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) ANUP Page 8 of 8 Downloaded on : Mon Jan 22 20:30:32 IST 2024