Delayed Form 10B filing before assessment completion is only a procedural defect and cannot defeat section 11 exemption.

Delayed filing of Form 10B before completion of assessment was treated as a procedural defect, not a substantive bar to exemption under section 11. The Tribunal applied the jurisdictional High Court principle that, from assessment year 2016-17 onwards, the audit report requirement is mandatory in substance but the timing and manner of filing are procedural. Because the report was filed before the assessment was concluded, the statutory requirement was held satisfied. On that basis, denial of the section 11 exemption was unsustainable and the assessee remained entitled to the claimed benefit.

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Issues: Whether delayed filing of Form 10B could deny the assessee exemption under section 11 of the Income-tax Act, 1961 for the assessment year 2016-17.

Analysis: The assessee had filed Form 10B subsequently, before the assessment was concluded. Relying on the jurisdictional High Court decision that, from assessment year 2016-17 onwards, filing of the audit report is mandatory in substance but procedural as to the mode and stage of filing, the Tribunal held that the non-filing along with the return was only a procedural omission. Since the requisite report was available before completion of assessment, the statutory requirement stood satisfied.

Conclusion: The denial of exemption under section 11 was unsustainable and the assessee was entitled to the benefit claimed.

Ratio Decidendi: For assessment year 2016-17 onward, delayed filing of the audit report/Form 10B before completion of assessment is a procedural defect and does not, by itself, defeat exemption under section 11 when substantive compliance is otherwise met.

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