Appeal denied for late Form 10B filing, exemption revoked under Income Tax Act

The Tribunal dismissed the appeal against denial of exemption under section 11 of the Income Tax Act for Assessment Year 2018-19 due to belated filing of Form 10B. The appellant's consistent belated filing of Form 10B was deemed a technical breach justifying the denial of exemption, as per the mandatory requirement post the 2015 amendment. The Tribunal upheld the lower authorities' decision, advising the appellant to seek legal remedies in accordance with the Income Tax Act.

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Issues:
Appeal against denial of exemption under section 11 of the Income Tax Act for Assessment Year 2018-19 due to belated filing of Form 10B.

Analysis:
1. The appellant, a Trust registered under section 12AA of the Act, filed its Return of income for A.Y. 2018-19 declaring Nil income. However, the Assessing Officer denied exemption under section 11 of the Act and demanded tax of Rs. 16,55,288/- due to the belated filing of Form 10B. The NFAC upheld the disallowance, stating that the belated filing justified the action.

2. The CIT(A) held that as per Rule 12(2) of the Income Tax Rules, Form 10B must be submitted electronically from 01.04.2016 onwards. The appellant's argument for condonation of delay was dismissed as the CIT(A) lacked the power under section 119(2)(b) to grant such relief. The appellant was advised to seek remedy from the jurisdictional CIT/PCIT/DIT for condoning the delay.

3. The appellant contended before the Tribunal that the requirement to file Form 10B along with the Return of Income is directory, and failure to do so should not lead to denial of exemption under section 11. Citing relevant case laws, the appellant argued that the belated filing was a technical breach causing no revenue loss. However, the Revenue supported the lower authorities' decision, emphasizing the mandatory nature of filing Form 10B post the Finance Act, 2015 amendment.

4. The Tribunal noted the appellant's awareness of the filing requirement and the belated submission of Form 10B. Referring to Circular No. 7/2018, the Tribunal highlighted the obligation to file Form 10B electronically due to the amendment in 2015. The Tribunal agreed with the lower authorities that the CIT(A) rightly dismissed the appeal, as the appellant consistently filed Form 10B belatedly without seeking condonation. The Tribunal rejected the appellant's arguments and upheld the dismissal of the appeal.

5. In conclusion, the Tribunal dismissed the appeal, stating that the appellant's consistent belated filing of Form 10B did not warrant interference with the lower authorities' decision. The Tribunal emphasized the mandatory nature of filing Form 10B post the 2015 amendment and advised the appellant to seek appropriate legal remedies in line with the Income Tax Act.

This detailed analysis covers the issues raised in the legal judgment comprehensively, outlining the arguments presented by both parties and the Tribunal's reasoning for dismissing the appeal.

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