2024 (5) TMI 536 - AT - Income Tax

Minimal delay in Form 10B filing condoned during pandemic period, section 11 exemption allowed

Income Tax Officer, Mumbai Versus PK Krishnan Educational Trust

The ITAT Mumbai held that minimal delay in filing Form 10B should be condoned where the assessee filed the return within the extended due date during the ... Denial of exemption u/s 11 - form No. 10B and 10BB has not been filed in time - claim of the assessee was that assessee filed form no.10B of the Act, prior to the filing of the return and the acknowledgement copy of the form no. 10B of the Act filed, was also shown - HELD THAT:- The extended time limit available to the assessee for the due date of filing of the return of income was 28 February 2022. Admittedly assessee filed return of income on 14/3/2022 and also furnished form number 10B along with that. Therefore, the due date for filing of form number 10B was one month prior to the due date of filing of the return of income i.e. 31 January 2022. As, the due date of filing of the return have been extended by the CBDT, the delay caused in filing form number 10B is minimal and also due to the uncertainty of the due date of filing of the return which is duly extended by CBDT. Identical issue arose before the coordinate bench in case of Kedar Nath Saraf Charity Trust [2024 (5) TMI 454 - ITAT KOLKATA] Income-tax Department was aware about the technical glitches and the problems faced by the tax-payers in furnishing various types of Forms including Form No. 10B is with regard to the furnishing of audit report in case of Trusts and Societies - return was filed within time limit prescribed u/s 139(1) of the Act but there was a delay in furnishing of the audit report on Form 10B and this Tribunal after considering the facts of the case as well as judicial precedents allowed the benefit of Section 11 & 12 of the Act. Coordinate bench held that up to March 2022, the country was passing through pandemic. The due dates for filing of the return of income as well as compliance made by the assessee also falls during that period. In view of this, we find that the delay caused in filing of number 10B deserves to be condoned. Accordingly, as indicated above, CIT- A was correct in allowing the appeal of the assessee. Issues Involved:1. Justification of exemption u/s 11 of the Act despite late filing of Form 10B.2. Appropriateness of CIT (A)'s relief for delayed filing of the audit report.Summary:Issue 1: Justification of exemption u/s 11 of the Act despite late filing of Form 10BThe appeal filed by the Income Tax Officer challenges the appellate order which allowed the assessee's exemption u/s 11 of the Income-tax Act, 1961. The assessee, an educational trust registered u/s 12A, filed its return of income for A.Y. 2021-22 on 14th March 2022 and revised it on 29th March 2022. The return was processed u/s 143(1) and later rectified u/s 154, denying exemption u/s 11 due to the late filing of Form 10B. The CIT (A) found that the assessee had filed Form 10B along with both the original and revised returns. The CIT (A) held that the time limit for filing Form 10B is directory, not mandatory, citing the Gujarat High Court's decision in Sarvodya Charitable Trust, which stated that exemption u/s 11 cannot be denied for delay in filing Form 10B. The CIT (A) concluded that the assessee complied with the procedural requirements and allowed the exemption.Issue 2: Appropriateness of CIT (A)'s relief for delayed filing of the audit reportThe Departmental Representative argued that Form 10B should be filed one month before the due date of filing the return of income, as per Section 44AB, which was not adhered to by the assessee. The Authorized Representative countered that the form was filed along with the returns and that the CIT (A) correctly relied on judicial precedents. The Tribunal noted that the extended due date for filing the return was 28th February 2022, while the assessee filed the return and Form 10B on 14th March 2022. Given the minimal delay and the pandemic-related disruptions, the Tribunal cited the case of Kedar Nath Saraf Charity Trust, which allowed for leniency in such delays. The Tribunal upheld the CIT (A)'s decision, condoning the delay and allowing the exemption u/s 11.Conclusion:The Tribunal dismissed the appeal filed by the Income Tax Officer, affirming the CIT (A)'s decision to allow the exemption u/s 11 despite the delayed filing of Form 10B, considering the procedural compliance and pandemic-related disruptions. The order was pronounced in open court on 07.05.2024.