Section 11 exemption cannot be denied solely for delayed Form 10B filing where the audit report was already on record.

Exemption under section 11 should not be denied merely because Form 10B was filed with the return and not within the prescribed time. Where a registered charitable trust had the audit report on record when the return was processed under section 143(1), the delay was treated as a procedural lapse rather than a ground to reject substantive exemption. The claim under section 11 was required to be examined on merits with reference to the filed report, and relief was to be granted in accordance with law.

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Issues: Whether exemption under section 11 of the Income-tax Act, 1961 could be denied merely because the audit report in Form 10B was filed along with the return of income and not within the stipulated time.

Analysis: The assessee was a registered charitable trust and the audit report in Form 10B was available when the return was processed under section 143(1) of the Income-tax Act, 1961. The denial of exemption rested only on the timing of filing of Form 10B. The delay in furnishing the audit report was treated as a procedural lapse and not, by itself, a ground to deny substantive exemption where the report was already on record and the claim was otherwise to be examined on merits. The matter was therefore required to be reconsidered in light of the filed Form 10B and the assessee's claim under section 11.

Conclusion: Exemption under section 11 could not be denied solely for belated filing of Form 10B; the issue was remanded to the Assessing Officer to examine the claim on merits and allow relief in accordance with law.

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