Section 11 exemption cannot be denied solely for late Form 10B filing when the audit report is already on record.

Delayed filing of Form 10B was not treated as a standalone ground to deny section 11 exemption where the audit report was already on record before the return was processed under section 143(1). Relying on a coordinate Bench decision on similar facts, the ITAT directed that the claim be examined on merits with the audit report taken into account. The matter was remanded to the AO for fresh consideration in accordance with law after granting the assessee due opportunity.

---

---

Issues: Whether the assessee's claim for exemption under section 11 could be denied merely because the audit report in Form 10B was filed belatedly, when the report was on record by the time the return was processed under section 143(1).

Analysis: The return was processed after Form 10B had already been filed and was available on record. Following the coordinate Bench decision on identical facts, the belated filing could not be treated as a ground to deny the exemption at the processing stage, and the matter required reconsideration on merits after taking the audit report into account.

Conclusion: The assessee's claim was not finally rejected on the ground of delayed Form 10B filing, and the matter was remanded to the AO for fresh consideration in accordance with law after granting due opportunity.

---