2024 (11) TMI 1415 - AT - Income Tax

ITAT Ahmedabad rules Form 10B filing procedural, grants Section 11 exemption for AY 2019-20, citing Gujarat HC ruling.

Bhavnagar Dashashrimali Meshree Vanik Gnati, Versus Asst. Director of Income-tax, CPC, Bengaluru Bhavnagar

The ITAT Ahmedabad allowed the appeal filed by the Assessee against the CIT(A)-1, Bengaluru, regarding the disallowance of an exemption under Section 11 ... Rejection of exemption u/s 11 - delay in filing Form 10B - HELD THAT:- We find that in the case of Association of Indian Panelboard Manufacturer [2023 (3) TMI 1374 - GUJARAT HIGH COURT] held that although the requirement of furnishing report was mandatory, filing there of is a procedural aspect. Even though the Form 10B was filed at a later stage, when it was part of the record of the AO in course of the processing of the return of income, the AO could not have denied the exemption claimed by the assessee u/s 11(1) and 11(2) on the ground that Form No. 10B has not been filed. Form 10B was available by the time the order of the ld. CIT(A) was passed who could have considered the factum of filing of FORM 10B. Assessee is eligible for deduction u/s 11 as the Form 10B has been duly filed. Decided in favour of assessee. The Appellate Tribunal ITAT Ahmedabad, comprising Dr. B.R.R. Kumar, Vice-President, and Ms. Suchitra Kamble, Judicial Member, addressed an appeal filed by the Assessee against the order of the CIT(A)-1, Bengaluru, dated February 27, 2024, concerning the Assessment Year 2019-20. The primary issue was the disallowance of an exemption of Rs. 10,67,766 under Section 11 of the Income-tax Act, 1961, due to the alleged procedural lapse of not filing Form 10B along with the return of income.The Assessee contended that the requirement to file Form 10B is procedural, not mandatory, and argued that the substantive requirement of auditing accounts was met, as evidenced by the UDIN for Form 10B. The Assessee also claimed that the lower authorities failed to consider explanations and information provided, breaching the Principles of Natural Justice.The Tribunal referenced the Gujarat High Court's decision in Association of Indian Panelboard Manufacturer Vs. Deputy Commissioner of Income-tax, which held that while furnishing the report is mandatory, its filing is procedural. The High Court ruled that the Assessing Officer should not deny the exemption if Form 10B is part of the record during the return processing. Consequently, the Tribunal concluded that the Assessee is eligible for the deduction under Section 11, as Form 10B was duly filed.The appeal was allowed, and the order was pronounced in open Court on November 21, 2024.