Late Form 10B filing does not defeat section 11 exemption when delay is explained and verification remains possible

A 31-day delay in filing Form 10B was treated as a procedural lapse and not a ground to deny exemption under section 11 where the return was filed within the extended due date, the audit report was already available during processing, and the delay was satisfactorily explained by health-related difficulties affecting accounts handling. The substantive conditions for exemption were otherwise satisfied, and verification of the report remained possible in accordance with law. The delay was directed to be condoned, Form 10B accepted after verification, and the assessee held entitled to section 11 exemption.

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Issues: Whether a 31-day delay in filing Form 10B for claiming exemption under section 11 of the Income-tax Act, 1961 should be condoned and the exemption denied on a purely procedural lapse.

Analysis: The return had been filed within the extended due date and Form 10B was already on record during processing under section 143(1). The delay in filing the audit report was explained as arising from health-related difficulties affecting the person handling accounts. The substantive conditions for exemption were otherwise stated to have been satisfied, and the delay was treated as a procedural defect. Following the cited coordinate bench view, the benefit under section 11 was held not to be denied merely for late filing of Form 10B where the delay is satisfactorily explained and verification can be carried out in accordance with law.

Conclusion: The delay was directed to be condoned, Form 10B was accepted after verification, and the assessee was held entitled to the benefit of exemption under section 11.

Ratio Decidendi: A satisfactorily explained delay in filing Form 10B should not, by itself, defeat a claim for exemption under section 11 where the assessee has otherwise met the substantive conditions and the report is available for verification.

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