Procedural defect in filing Form 10B curable; exemption under section 11 restored after rectification.

Filing the audit report in Form 10B with a trust's return was treated as a procedural requirement, so its omission made the return defective but curable. Once the defect was cured by filing Form 10B, exemption under section 11 could not be denied merely for non-enclosure with the original return. The resultant denial in processing under section 143(1)(a) was therefore held rectifiable under section 154, and the Assessing Officer was directed to allow the exemption after giving effect to the filed audit report.

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Issues: Whether the denial of exemption to the assessee-trust for not enclosing Form No. 10B with the return was a rectifiable procedural defect and whether the assessment order could be rectified under section 154.

Analysis: The return had been processed under section 143(1)(a) by denying exemption under section 11 because the audit report in Form No. 10B was not filed along with the return. The Tribunal accepted the view that, in the light of the binding High Court authority relied upon, filing the audit report was a procedural requirement and the omission made the return defective but curable. Since the defect had been removed by filing Form No. 10B, the assessee was entitled to the benefit of exemption and the assessment order required rectification.

Conclusion: The issue was decided in favour of the assessee. The order denying exemption was held to be rectifiable, and the Assessing Officer was directed to allow the exemption after giving effect to the filed audit report.

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