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Trusty may apply for release from Section 11 if the roi submitted under section 139 (4a)

Trusty may apply for release from Section 11 if the roi submitted under section 139 (4a)

Km Educational & Rural Trust in the development of vs Ito (Itat Chennai)

In the case of Km Educational & Wien-Development Trust vs. ItoThe Court of Income Tax Appeal (ITAT) Chennai dealt with the dismissal regarding the refusal to be exempted in accordance with Section 11 of the Income Tax Act of 1961 by the CPC Center (CPC). Assessee, a trust registered in accordance with Section 12a, made an income (ROI) for the year’s (AY) 2018-19 year after the deadline specified in accordance with Section 139 para. 1, but in the extended period allowed in accordance with section 139 (4a). The issue was whether Assessee could apply for dismissal in accordance with Section 11, despite the late submission of ROI.

CPC did not release the exemption based on section 11, claiming that Trust did not submit ROI within a specified period of Section 139 para. 1 of the Income Tax Act. However, Assessee made his return on November 30, 2018, after September 30, 2018, but before the extended date on November 30, 2018, in accordance with Section 139 (4a). Despite the delay in the application, Assessee argued that he should still qualify for dismissal in accordance with section 11, relying on CBDT Circular No. 173/193/2019-ITA-I from April 23, 2019. The circular explains that if trust gives his roi in time allowed in accordance with section 139 (4a), you should not refuse to turn off in accordance with section 11.

ITAT referred to the abovementioned CBDT circular and it was observed that it was binding on tax authorities. The Tribunal emphasized that CPC and the learned Commissioner of Income Tax (appeal) did not follow the Circular Directive in this matter. According to the circular, the requirement to apply for exemption in accordance with Section 11 is the submission of ROI at the time allowed on the basis of section 139, even if the notification is late, but within a specified time. The Tribunal stated that the refusal to release only on the date of notification in accordance with Section 139 para. 1 was incorrect.

ITAT postponed the order of the learned CIT (A) and referred the case back to CIT (A) to rectify, in accordance with the round round CBDT, and directed rectification of demand raised by CPC. The Tribunal noticed that Assessee should submit the necessary documents and written statements of CIT (A) in accordance with the requirements who must issue an order in accordance with the law.

To sum up, the ITAT decision in favor of trust strengthens the importance of compliance with CBDT guidelines. The judgment emphasizes that in the case of trusts registered in accordance with Section 12a, the exemption in accordance with Section 11 can be applied for the submission of roi during the time allowed in accordance with section 139 (4a), even if it is submitted after the first date.

Full text of the order ITAT CHENNAI

This is the appeal preferred by Trust Assesee against the decision of the learned income tax commissioner, appeal (hereinafter “LD.Cit (a)”), Addl. JCiT (A) -2, Vadodara, of 04/03/2024 for a year of assessment (hereinafter in the short “AY”) 2018-19.

2. The main complaint of Assessee is contrary to the operation of CPC rejecting the exemption U/S.11 of the Income Tax Act of 1961, income refund (ROI) within the time limit specified by u/p. 139 (1) of the Act.

3 Zero and demanded the return of rs.1.96 656/-. However, CPC during the processing of the return U/S.143 (1) of the Act on 30.09.2019 calculated the total income at 2.14.33 895/– and raised a demand of 92.83 542/- instead of refunding Rs.1, 96 656/- as Assessee claims. The reason for rejecting the exemption, which the Act says U/S.11, was that Assessee did not send his Itt/Roi, and the audit report on form 10b on time or before the deadline in accordance with the Act. In the appeal of LD.CIT (a), he noticed that Assessee had a refund on 30.11.2018, while the timely submission of the return U/S.139 (1) of the Act was 30.09.2018 and the audit report in Form 10 was submitted only within 31.10 .2018 (Because in accordance with the provisions of paragraph 44ab of the Act, the audit report had to be submitted a month before the date of submission of the ITR). LD.CIT (A) also noted that the competent authority accepted the delay in submitting a report from the U/S.10B audit report of 30.01.2024. But because Assessee submitted ITR after the date U/S.139 (1) of the Act, he maintained the operation of the CPC rejecting the exemption U/S.11 of the Act. Contrary to this challenged action, LD.CIT (A) Assessee is ahead of us. LD.Ar attacking LD.CIT (A) have contributed to our notification CBDT Okólnik no.Which explains that if Trust Assessee submits a delay in his ROI, but in time allowed U/S.139 (4a) of the Act, AO/CPC must allow the claim of U/p. 11 of the Act. Ibid circular sounds sound like below:

Non-refotitus aims to refer to the representation received on the above-mentioned topics stating that during the ITR-7 processing for AY in years, 1961 (Act), the following is passed by U/s 143 (1) (a) Act:-

“According to Section 12a (1) (BA) of the Income Act -Tax, 1961 the person received income provided reimbursement of income for the previous year 139, during the time allowed as part of this section. Otherwise, release U/S-11 ie sr. No 4 (I) and 4 VIII In the schedule, the BTI part is not allowed. “

On this basis, the release of U/s 11 of the Act was refused differently qualifying trust, thus causing great demand.

2. In this case, the memorandum explaining the relevant financial account provisions, 2017 sounds like under:

“In accordance with the existing provisions of the aforementioned section, entities registered on the basis of section 12AA are obliged to submit reimbursement of income in accordance with Section (4A) from Section 139, if the total income without taking into account the provisions of Section 11 and 12 exceeds exceeding the maximum amount, which is not taxable from tax income. However, there is no clarity as to whether the reimbursement of income is to be submitted during the permitted time U/p. 139 of the Act, or otherwise. To ensure clarity in this respect, it is proposed to further change section 12a to provide for a further condition that the person received to income income will ensure an income refund at the time allowed in accordance with Section 139 of the Act. These changes are explaining.

These changes will come into force from April 1, 2018 and will apply accordingly in relation to the year of assessment 2018–19 and subsequent years. “

3

“Entities registered on the basis of Section 12AA are obliged to submit reimbursement of income on the basis of Uprising (4a) of Section 139 of the Income Act-if the total income without taking into account the provisions of Section 11 and 12 exceeds the maximum amount, which is not profitable with income tax. A correction was introduced to Section 12a of income tax to provide for an additional condition that a person receiving tax income to income tax will ensure an income refund at the time allowed on the basis of section 139 act. “

3. Therefore, in the case of the Act registered by the trust of U/S 12AA, to benefit from the benefits of release U/S 11, refunds the income during the permitted U/s 139 of the Act. Therefore, orders U/s 143 (1) (a) in cases where the demand has been raised in this matter may be repaired.

These are the approval of the chairman (CBDT). (Stress given by us)

4. In the strength of the above -mentioned LD.AR circular stated that because Assessee is registered u/p. 12aa of the Act, in order to apply for the benefit of excluding U/p. 11 of the Act, the legal requirement only to make a refund of income during permitted time u/ P. 139 of the Act and CPC, as well as LD cit (a) made arrears time as the date of the date U/p. 139 (1) act. According to him, such a time limit cannot be placed by CPC/LD CIT (A) and refuse to benefit from the release of U/s 11 of the Act. In other words, if Assessee submitted his ROI during the permitted time U/S.139 of the Act (i.e. even if it is delayed, before the time allowed U/S.139 (4a) of the Act), then the Act), CBDT circular (above ) He directed CPC to repair its orders U/S.143 (1) (A) Act, as well as raised requirements. Since the CBDT circular is binding on the income tax authority, we find that LD.CIT (a) made a mistake because Assessee submitted his Ittr/Roi for a long time before the time allowed U/s 139 (4a) of the Act. That is why we put down the challenged order of LD.CIT (A) and restored this problem back to the LD.CIT (A) file with the direction of transmission of the rectification order in accordance with the round round Round No. 173/193/193/193/193/193/193/193/193/193/ 193/193/193/193/193/193/193/193/193/193/193/193/193/193/193/193/193/2019-ITA-I from 23.04.2019 (above).

5. Needless to say, Assessee is diligently and submit written applications/relevant documents before LD.CIT (A), if it is recommended, and LD.CIT (A) in order to issue an order in accordance with the law.

6. As a result, the appeal lodged by Assessee is allowed for statistical purposes.

Order pronounced on 04th On December 2024 in Chennai.