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Issues: (i) Whether the 3 day delay in filing the audit report in Form No.10B and the income tax return during the covid pandemic period is liable to be condoned; (ii) Whether the requirement of filing Form No.10B by the specified date is mandatory or directory for claiming benefit under Sections 11 and 12 of the Income tax Act, 1961.
Issue (i): Whether the short delay in filing Form No.10B and the return during the covid pandemic is subject to condonation.
Analysis: The facts show a three day delay in uploading Form No.10B and filing the return caused by pandemic related impediments (auditor located elsewhere, lockdown restrictions) and the limitation for filing appeals/condonation fell within the period covered by the extension of limitation announced in the Suo Moto proceedings addressing covid related relief. The coordinate bench decision in a similar matter and CBDT Circular No. 02/2020 provide administrative guidance relevant to condonation where pandemic disruptions occurred. The consolidated factual and legal position supports excusing brief pandemic related delays in the circumstances presented.
Conclusion: Delay in filing Form No.10B and the return for the three days in question is condoned and benefits of Sections 11 and 12 are to be allowed in favour of the assessee.
Issue (ii): Whether filing Form No.10B by the specified date is a mandatory condition precedent to claim exemption under Sections 11 and 12 or a directory requirement.
Analysis: Prior coordinate bench and relevant judicial precedents treat the timeline for filing Form No.10B as directory where the audited report was available to the assessing officer before completion of assessment. In the present case Form No.10B was furnished before completion of assessment proceedings and the short, pandemic related delay did not deprive the assessing officer of the necessary information for processing under Section 143(1). The balance of authority and the facts support treating the filing timeline as directory rather than jurisdictional in the circumstances.
Conclusion: The requirement of filing Form No.10B by the specified date is directory in nature for the facts of this case; denial of exemption for a three day delay is not justified and the claim under Sections 11 and 12 must be allowed in favour of the assessee.
Final Conclusion: Both issues are decided in favour of the assessee and the impugned order is set aside; the Assessing Officer is directed to grant the benefit of Form No.10B and extend the exemptions under Sections 11 and 12 for the assessment year concerned.
Ratio Decidendi: Where an audited report in Form No.10B is filed shortly after the specified date but is available to the assessing officer before completion of assessment, and the delay is caused by pandemic related impediments, the filing timeline is directory and the delay may be condoned allowing entitlement to exemptions under Sections 11 and 12 of the Income tax Act, 1961.
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