2024 (3) TMI 827 - AT - Income Tax

Trust cannot be denied section 11 exemption for belated filing of Form 10B audit report

Shree Shyam Manohar Gaushala Vill Chopasani Versus Income Tax Officer, Exemption, Jodhpur, CPC, Bangalore

ITAT Jodhpur condoned a 37-day delay in filing appeal, accepting the assessee's explanation that intimation date was inadvertently left blank and email ... Condonation of filling appeal before ITAT - delay of 37 days in filing of the appeal - HELD THAT:- The bench noted that the assessee has explained the reasons that in fact there is no delay and the date of intimation was inadvertently left blank. Even the date of intimation and service there was an email id of the consultant who was now not looking to the affairs of the trust and the details of the trustee have been updated on the portal and thus even on this reasons there are reasonable cause in filling the appeal though belated. Based on these observations we found merits in the reasons advanced and we concur with the submission of the assessee and see that there were reasonable cause for the delay and thus, the delay in filing the appeal by the assessee before the ld. CIT(A) is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others [1987 (2) TMI 61 - SUPREME COURT] as the assessee is prevented by sufficient cause and the appeal of the assessee taken up for deciding on the merits of the case. Exemption u/s 11 - assessee had belatedly e-filed the Audit Report in Form 10B along with the return of income filed under sub section (1) of section 139 - whether the assessee denied the benefit of exemption as a trust merely on the reason that the audit report in Form no. 10 B filed belated? - HELD THAT:- For delay in filling the audit report in form no. 10 B we note that the assessee has filed the said audit report on 13.03.2024. Assessee placed on record that even the CBDT vide F.No. 225/358/2018/ITA.II dated 08.10.2018 wherein the due date extended upto 31.10.2018 and the assessee in this case e-filed the form no. 10B on 13.03.2024. This issue is decided in the case of Sarvodaya Charitable Trust Vs. ITO(E) [2021 (1) TMI 214 - GUJARAT HIGH COURT] where assessee, a public charitable trust registered u/s 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No.10B especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. Also see Shri Laxmanarayan Dev Shrishan Seva Khendra [2023 (7) TMI 293 - ITAT AHMEDABAD] and Sh. Rajkot Vishashrimali Jain Samaj [2023 (3) TMI 765 - ITAT RAJKOT] - Thus we direct the Jurisdiction Assessing Officer (JAO) to consider the Form no. 10B through belated and allow the claim of exemption u/s. 11. Appeal of assessee allowed. Issues Involved:1. Condonation of Delay in Filing Appeal2. Merits of the Appeal for A.Y. 2015-163. Merits of the Appeal for A.Y. 2018-19Summary:1. Condonation of Delay in Filing Appeal:The assessee filed an affidavit requesting the condonation of a 37-day delay in filing the appeal for A.Y. 2015-16. The delay was attributed to a bona fide belief that the CIT(A) would rectify an earlier order. Both parties were heard, and the delay was condoned based on the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC), as the assessee was prevented by sufficient cause.2. Merits of the Appeal for A.Y. 2015-16:The assessee argued that the CIT(A) erred in dismissing the appeal as already decided while the quantum appeal was pending. The AO had reopened the case under section 147 due to unexplained cash deposits and completed the assessment ex-parte under section 144. The CIT(A) had mistakenly treated the appeal as related to a penalty under section 271(1)(b). The Tribunal noted that the CIT(A) did not address the merits of the case and set aside the appeal to the file of the CIT(A) for a fresh decision.3. Merits of the Appeal for A.Y. 2018-19:The assessee filed its return declaring total income of Rs. 5,09,328, which was processed u/s 143(1) with total income determined at Rs. 1,35,18,419 due to non-filing of the Audit Report in Form 10B. The CIT(A) dismissed the appeal for a 1065-day delay in filing and on merits, stating that the exemption u/s 11 and 12 was not allowable due to the late filing of Form 10B. The Tribunal condoned the delay and noted that the CBDT had extended the due date for filing the audit report. It directed the Jurisdiction Assessing Officer to consider the belated Form 10B and allow the claim of exemption u/s 11, following precedents from the Gujarat High Court and other Tribunal decisions.Conclusion:The appeal for A.Y. 2015-16 was allowed for statistical purposes, and the appeal for A.Y. 2018-19 was allowed on merits.