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of <h1>Section 11 exemption valid despite late Form 10/10B filing as requirement is directory not mandatory</h1> <h3>Income Tax Officer (E), Bhavnagar, Versus Ramji Mandir Religious And Charitable Trust,</h3> Income Tax Officer (E), Bhavnagar, Versus Ramji Mandir Religious And Charitable Trust, - TMI Issues Involved:1. Filing of Form No. 10 and/or 10B within the prescribed due date.2. Direction to the Assessing Officer to allow the claim under Section 11 of the Income Tax Act.3. Contradiction in the CIT(A)'s findings regarding the CPC's power to make adjustments.Summary of Judgment:Issue 1: Filing of Form No. 10 and/or 10B within the prescribed due dateThe Revenue contended that the Ld. CIT(A) erred in treating the non-filing of Form No. 10 and/or 10B within the due date as a procedural lapse, arguing that the Hon'ble Supreme Court in M/s. Wipro Ltd. held that exemption provisions must be strictly and literally complied with. The Tribunal observed that the assessee had filed the original return within the due date, and the revised return, which corrected an error in the quantum of deduction under Section 11(2), was filed later. The Tribunal cited various judicial precedents, including CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust and CIT vs. Nagpur Hotel Owners Association, which held that the requirement of filing the audit report is procedural and should not deny the exemption if submitted during assessment proceedings.Issue 2: Direction to the Assessing Officer to allow the claim under Section 11 of the Income Tax ActThe Tribunal upheld the Ld. CIT(A)'s direction to the Assessing Officer to allow the claim under Section 11 after due verification. The Tribunal noted that the assessee had filed the original return and Form 10 within the due date, and the revised return was filed to correct an error. The Tribunal emphasized that the procedural lapse of delayed filing should not result in the denial of exemption, referencing the case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) and other precedents.Issue 3: Contradiction in the CIT(A)'s findings regarding the CPC's power to make adjustmentsThe Tribunal found no contradiction in the Ld. CIT(A)'s findings. It clarified that the CPC's adjustment was based on the belated filing of Form 10B, which was corrected by the Ld. CIT(A) by treating it as a procedural lapse. The Tribunal concurred with the Ld. CIT(A)'s view that the exemption under Section 11 should not be denied merely due to the delayed filing of Form 10B, provided it was available before the completion of assessment.Conclusion:The Tribunal dismissed the Department's appeal, affirming the Ld. CIT(A)'s order to allow the assessee's claim under Section 11 after due verification and treating the delayed filing of Form 10B as a procedural lapse. The Tribunal reiterated that procedural requirements should not obstruct the substantive right to exemption, aligning with various judicial precedents.
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