Delayed Form 10BB filing was treated as directory, so exemption denial on that ground was set aside for fresh review.

Delayed filing of Form 10BB did not, by itself, justify denial of exemption in processing under section 143(1) where the audit report was already available with the Assessing Officer. The Tribunal treated filing of the report as a procedural requirement and regarded it as directory rather than mandatory on these facts. It held that the exemption claim should not have been rejected merely for delay and required fresh examination. The intimation and appellate order were set aside, and the matter was remanded to the Assessing Officer for reconsideration after granting a reasonable opportunity of hearing.

---

---

Issues: Whether denial of exemption on account of delayed filing of Form 10BB could stand in processing under section 143(1), and whether the matter required reconsideration on the ground that the audit report was already available with the Assessing Officer.

Analysis: The Tribunal noted that Form 10BB had been filed belatedly, but the report was available at the time of processing of the return. It treated the filing of the audit report as a procedural requirement and relied on the view that such filing is directory in nature. On that basis, the Tribunal held that the exemption claim should not have been rejected merely on the ground of delay and that the claim required fresh examination by the Assessing Officer.

Conclusion: The intimation and the appellate order were set aside and the matter was remanded to the Assessing Officer for fresh consideration after granting a reasonable opportunity of hearing.

---