Question And Answer
Subject: Delay in filing of ITR by Charitable Trust
Querist: Anup A S
Answered by:
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Date: June 2, 2023
Query asked by Anup A S

Respected Sir,

A charitable trust regd u/s 12A failed to file the ITR for AY 2021-22 before the due date for filing of ITR i.e. after 15/03/2022 . However it filed audit report, Form 10B before due date for filing of form 10B.  CPC  while processing u/s 143(1) has not allowed the entire expenditure as application of income and treated the gross receipts as taxable income and taxed accordingly.  In the intimation no reason given for the disallowance.  For filing appeal what grounds can be taken and  apart from appeal , any other alternative remedy available . Kindly enlighten.

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As we understand, you have filed a belated return. Therefore, you should be allowed a deduction under section 11 of the Act. You can take the ground that the denial of deduction under section 11 of the Act is when the assessee fails to file the Audit report on time. You may also take the ground that, this being a debatable issue the adjustment cannot be made under section 143(1) of the Act.

Savirti Foundation v. ITO ITA 1925/Mum/2021 dated August 01, 2022 (Mum) (Trib) relying on the case of the Jurisdictional High Court in the case of CIT v. Mumbai Metropolitan Regional Iron & Steel Market [2015] 378 ITR 103 (Bom) (HC) held that late filing of required documents would not disentitle an assessee from availing the benefits of section 11 of the Act.

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