2023 (9) TMI 1486 - AT - Income Tax

Delay in uploading Form 10B audit report doesn't deny section 11 benefits if genuine and beyond assessee's control

Shri Namiyun Parswanath Jain Versus ITO (Exemptions) Jabalpur

ITAT Jabalpur held that delay in uploading Form 10B audit report does not warrant denial of section 11 benefits. The assessee obtained the audit report ... Denial of benefit u/s 11 - delay in uploading the Audit Report in Form.No.10B - AR explained that the delay is not an wanton act and the assessee has obtained audit report prior to filing of the return of income but was uploaded belatedly - HELD THAT:- AR explained that the delay is not an wanton act and the assessee has obtained audit report prior to filing of the return of income but was uploaded belatedly. Whereas the Audit Report in form No.10B was signed by the Chartered Accountant on 20.06.2018 and the CA was added in the e-filling portal for uploading form No.10B on 03.08.2018 and the assessee has filed the return of income on 06.08.2018 and also filed the revised return of income on 30-03-2018. The audit report in Form.No.10B was uploaded by the C.A. on 26.02.2020 and the assessee was dependent on the CA and there is a delay in filling/uploading the Audit report and thus caused hardship beyond the control of the assessee and reasons are genuine and it is a curable defect. We find the Hon'ble Tribunal on the similar issue where there was delay in filling the Form.No.10B and it treated as procedural defect and is curable and was restored to the lower authorities in the case of Savitri Foundation [2022 (8) TMI 1372 - ITAT MUMBAI] On the similar directions the disputed issue is restored to the file of the AO to adjudicate afresh after considering the Audit report and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. We allow the grounds of appeal of the assessee for statistical purposes. Issues Involved:The judgment involves issues related to condonation of delay in filing audit report, denial of benefit u/s 11, computation of delay u/s 139, treatment of corpus donation, and rectification petition u/s 154.Issue 1: Condonation of Delay in Filing Audit ReportThe appellant appealed against the order of the National Faceless Appeal Centre (NFAC) /CIT(A) passed u/s 154 and 250 of the Act. The appellant contended that the delay in uploading the audit report was due to genuine reasons beyond their control. The audit report was signed by the Chartered Accountant before the filing of the return of income. The appellant relied on judicial decisions and CBDT Circular to support their claim for condonation of delay. The Tribunal observed that delay in uploading the audit report was a procedural defect and curable. Citing a similar case, the Tribunal set aside the order and restored the issue to the Assessing Officer for fresh adjudication.Issue 2: Denial of Benefit u/s 11The appellant's claim for benefit u/s 11 was denied as the Form No.10B was not uploaded along with the return of income. The appellant argued that the audit report was available at the time of filing the return, and the delay in uploading was unintentional. The Tribunal, considering the genuine reasons for the delay and judicial precedents, held that non-filing of the audit report was a procedural defect and not a ground for denying the benefit u/s 11. The Tribunal directed the Assessing Officer to reevaluate the issue after considering the audit report.Issue 3: Computation of Delay u/s 139The appellant contested the denial of condonation of delay by CIT(exemption) u/s 119(2) based on the computation of delay. The appellant argued that the delay should be computed u/s 139 as per CBDT circular, making the delay fall within the condonable period. The Tribunal noted the appellant's reliance on the CBDT circular and directed the Assessing Officer to reconsider the issue in light of the circular.Issue 4: Treatment of Corpus DonationThe appellant raised a ground regarding the treatment of corpus donation as the only income of the trust claimed exempt under section 11. The appellant argued that even if the benefit of section 11 was not granted, the corpus donation should not be disallowed under section 143(1). The Tribunal considered the arguments and directed the Assessing Officer to review the treatment of corpus donation in accordance with relevant judicial decisions.Separate Judgement by Judges:The judgment was delivered by the Appellate Tribunal ITAT Jabalpur, with Shri Om Prakash Kant as the Accountant Member and Shri Pavan Kumar Gadale as the Judicial Member. The appeal was allowed for statistical purposes, and the case was remanded to the Assessing Officer for fresh adjudication.