Trust's Appeal Allowed Despite Delay in Filing Audit Report, ITAT Rules in Favor

The ITAT bench allowed the appeal of the trust, directing the Assessing Officer to consider the audit report filed in Form No. 10B despite the delay in filing. The delay was deemed a minor breach and was condoned in line with the CBDT instruction and the decision of the Hon'ble P&H High Court, which permitted filing the audit report at the appellate stage under section 12A(1)(b) of the Act. The ITAT held that the provision in question was non-mandatory, thereby ruling in favor of the assessee and allowing the appeal.

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Issues:
Appeal against CIT(A) order for assessment year 2015-16 regarding non-filing of audit report in Form 10B along with return of income by a trust.

Analysis:
The appeal was filed by the assessee against the order of the ld CIT(A), NFAC, Delhi, for the assessment year 2015-16. The assessee, a trust, had failed to include the Form 10B audit report along with the return of income. The auditors rectified this mistake on 21.11.2019 after the due date of 30.9.2015. The ld CIT(A) dismissed the appeal citing ignorance of law as inexcusable. The assessee argued that reliance on auditors should not disadvantage them if not at fault. They referenced various court decisions and a CBDT instruction stating that filing the audit report along with the return is not mandatory. The assessee's audit report was filed before the appeal was adjudicated. The CBDT instruction allowed for condoning delays beyond the assessee's control. The Hon'ble P&H High Court held that filing the audit report at the appellate stage is permissible under section 12A(1)(b) of the Act.

The Co-ordinate Bench of Panaji Tribunal's decision was cited by the revenue to argue the mandatory nature of section 12A(1)(b). However, the ITAT bench noted the Hon'ble P&H High Court's decision allowing the filing of the audit report at the appellate stage, making the provision non-mandatory. The ITAT held that the delay in filing the audit report was a minor breach and, considering the CBDT instruction's provision for condonation of such delays, directed the Assessing Officer to consider the audit report in Form 10B for computing the assessee's income. Consequently, the appeal of the assessee was allowed, and the delay in filing the audit report was condoned.

In conclusion, the ITAT bench, after considering the submissions and legal precedents, allowed the appeal of the assessee, directing the Assessing Officer to consider the audit report filed in Form No.10B despite the delay, as the delay was considered a minor breach and was condoned in accordance with the CBDT instruction and the decision of the Hon'ble P&H High Court.

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