Satish Chandra, J. - (1.) THIS is an appeal filed by the Department under Section 260A of the Income Tax Act, 1961 against the judgment and order dated 29 -6 -2007 passed by the Income Tax Appellate Tribunal, Lucknow in Income Tax Appeal No. 106/Luck./2006 for the assessment year 2001 -02.
(2.) HEARD Sri D.D. Chopra, learned Counsel for the appellant and Sri Amit Singh Bhadauria holding brief of Sri J.N. Mathur, learned Counsel for the respondent. The above -mentioned appeal was admitted on 11 -4 -2008 with the following substantial questions of law: 1. Whether on the fact and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in allowing exemption under Section 11 of the Income Tax Act to the appellant without appreciating the fact that the original return was filed on 27 -3 -2002 though the due date was 31 -10 -2001 and was not even accompanied by Audit Report in Form No. 10B. 2. The Income Tax Appellate Tribunal failed to appreciate the fact that the assessee could claim the benefit of revised return filed on 30 -10 -2002 only when the original return was filed within the due date and therefore, the Assessing Officer rightly treated the belated return filed on 30 -10 -2002 as non est. 3. The Income Tax Appellate Tribunal erred in law and on facts in confirming the order of the Commissioner of Income Tax (Appeals) in allowing exemption under Section 11 of the Income Tax Act without appreciating the fact that in the instant case the original return filed by the assessee was neither under Section 139(1) nor in compliance to notice under Section 142 of the Income Tax Act and, therefore, the revised Return filed on 30 -10 -2002 along with the Audit Report in Form No. 10 -B was non est. The Hon'ble Tribunal erred in granting exemption under Section 11 of the Act to the assessee even though assessee failed to comply with the provisions of the Act in letter and spirit.
(3.) WHETHER on the fact and in the circumstances of the case the Income Tax Appellate Tribunal erred in deleting the addition of Rs. 67,28,272 shows as surplus as per Income & Expenditure Accounts relating to the two branches of the assessee society. 4. The brief facts of the case are that the assessee is a registered Society registered under the Societies Registration Act, 1860 since 12 -11 -1991. It is running two branches of 'Lucknow Public School', one at A -Block; and another at B -Block, Rajajipuram, Lucknow. The assessee had applied long back for exemption under Section 10(23C)(vi) but no decision on it was taken till the date of the assessment order or the order passed by the First Appellate Authority. However, the Society was also registered under Section 12A of the Income Tax Act, 1961 and was claiming exemption under Section 11 of the Act. For the assessment year under consideration, the respondent (hereinafter referred to as 'assessee') has filed its return for the assessment year under consideration on 27 -3 -2002, showing the "nilincome" after claiming the exemption under Section 10(23C) of the Income Tax Act. This original return was filed in Form 2D 'Saral'. Later on, when the assessee came to know that no exemption is available under Section 10(23C)(vi), he filed a revised Return in Form 3 -A along with Form 10B enclosing also the Audit Report. In this Return, the assessee has claimed exemption under Section 11 of Income Tax Act. The Assessing Officer observed in his order that the original Return was not filed as the same was belated, so he treated the said Return filed under Section 139(4) where in the exemption under Section 11 was not claimed but the claim was made under Section 10(23C) which was not available to the assessee. Regarding the revised Return, which was filed on 30 -10 -2002, he treated the same as" non est' and took no cognizance of Form 10 -B or Audit Report etc. Finally, without giving any exemption, he made the addition of Rs. 67,28,272 shown as surplus income. In appeal, First Appellate Authority has deleted the said addition which was confirmed by the 1TAT by the impugned order. Not being satisfied, the department is in present appeal.;