ITAT Mumbai Section 11 Exemption
Gramin Vibhag Shramik Shikshan Sanstha Palghar vs. Exemption Ward [ITA No.581/Mum/2025]
Appeared for Assessee by Mr. Yeshwant Gupta a/w Mr. Austin Meachery.
The Income Tax Appellate Tribunal (ITAT) in Mumbai recently ruled in favour of an assessee concerning the denial of exemption under Section 11 of the Income Tax Act for the Assessment Year 2021-22. The assessee, a trust engaged in charitable educational activities, filed its income tax return on March 23, 2022, declaring a total income of Rs.91,290. This return was processed under Section 143(1) of the Act, but the Centralized Processing Centre (CPC) disallowed the exemption under Section 11 to the extent of INR 3,16,97,382, citing the failure to submit registration details under Section 12AB.
The core issue was whether the assessee was eligible for the exemption under Section 11 for AY 2021-22, despite applying for registration under Section 12AB only on March 26, 2022 – a day before filing the return. The CPC argued that the delay in applying within the prescribed timeframe under Section 12A(1)(ac)(i) of the Act rendered the assessee ineligible for the exemption. Thereby, a demand of INR 1,49,51,840 was levied on the assessee trust.
Dissatisfied with this decision, the assessee appealed to the Tribunal. After reviewing the case, the Tribunal highlighted key points:
- The CBDT, through Circular 16/2021, had extended the deadline for filing Form 10A to March 31, 2022. Hence, the assessee’s application on March 26, 2022, was timely and not in violation of any deadline.
- The Tribunal noted that the CPC had erred by not accounting for this extension, which was a correctable mistake under Section 154 of the Income Tax Act.
Consequently, the Tribunal directed the Assessing Officer to grant the exemption under Section 11 for AY 2021-22. The appeal was allowed in favour of the assessee trust, setting a precedent for cases where compliance deadlines are influenced by CBDT notifications.
ITAT Mumbai Section 11 Exemption
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