Tax Exemption Granted: ITAT Allows Appeal for Assessee, Condones Audit Report Delay, Confirms Charitable Activity Compliance.

The ITAT allowed the appeal, granting the assessee exemption under Section 11 of the Income Tax Act for the Assessment Year 2022-23. The delay in filing the audit report in Form 10B was condoned, and there were no disputes regarding the charitable activities or application of funds, entitling the assessee to the claimed deduction.

---

---

Issues:
Exemption under Section 11 of the Income Tax Act denied due to delay in filing audit report in Form No. 10B.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax, Appeal, Addl/JCIT(A) -10 Mumbai, denying exemption under Section 11 of the Income Tax Act for the Assessment Year 2022-23 based on the failure to submit the audit report in Form No. 10B within the prescribed time limit. The assessee had requested condonation of the delay, which was granted after a delay of 132 days. The contention was that since the delay in filing the audit report had been condoned, and there were no adverse observations regarding the claim made under Section 11 of the Act, the assessee should be granted the benefit of exemption under Section 11.

The Tribunal observed that the assessee, a charitable society in West Bengal, had been involved in charitable activities and had been granted registration under Section 12A of the Act. The return of income was filed, claiming exemption under Section 11 for the amount applied for charitable purposes during the year. However, the exemption was denied initially due to the belated filing of the audit report in Form No. 10AB. Despite challenging the adjustment made by the CPC, relief was not granted as the audit report in Form 10B was not e-filed on time. Subsequently, the delay in filing Form 10B was condoned, and as there was no dispute regarding the charitable activities and the application of funds, the Tribunal held that the assessee was entitled to the deduction under Section 11 as claimed in the return for the relevant assessment year.

Therefore, the Tribunal allowed the appeal of the assessee, concluding that since the delay in filing Form 10B had been condoned, the assessee was eligible for the benefit of exemption under Section 11 of the Income Tax Act for the Assessment Year 2022-23.

---