Late filing claim rejected as return and audit report filed within extended deadline under section 11

ITAT Pune allowed the appeal regarding denial of exemption under section 11. The lower authority incorrectly denied exemption citing late filing of return and audit report. ITAT found that pursuant to CBDT order dated 27.09.2019, the filing deadline for assessment year 2019-20 was extended from 30.09.2019 to 30.10.2019. Since the return and Form 10B audit report were filed on 23.10.2019, they were within the prescribed time limit. The tribunal directed deletion of the adjustment and decided in favor of the assessee.

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Issues:
1. Denial of exemption u/s 11 due to alleged non-compliance with conditions under sections 12A(1)(b) and 12A(1)(ba).
2. Consideration of alternate claim for exemption u/s 10(23C)(iiiab).
3. Dispute over the filing date of income tax return and audit report.
4. Adjudication of Revenue's appeal challenging the allowance of exemption.

Analysis:

1. The appellate tribunal addressed the issue of denial of exemption u/s 11 to the assessee due to alleged non-compliance with conditions under sections 12A(1)(b) and 12A(1)(ba). The tribunal found that the filing of the income tax return and audit report within the prescribed time limit was crucial for compliance. The tribunal noted that the last date for filing was extended by the CBDT, and as the documents were filed within the extended deadline, the denial of exemption by the lower authority was deemed incorrect.

2. The tribunal considered the alternate claim for exemption u/s 10(23C)(iiiab) by the assessee. It was observed that the appellant, an educational society receiving significant government grants, was eligible for this alternate claim. The tribunal highlighted that the impediment under section 11(7) did not apply to the alternate claim under section 10, and thus, the tribunal directed the deletion of the adjustment and granted relief to the appellant.

3. A dispute arose regarding the filing date of the income tax return and audit report, with the Revenue contending that the documents were filed belatedly. However, the tribunal, after examining the CBDT order extending the filing deadline, concluded that the documents were filed within the prescribed time. Consequently, the tribunal allowed the cross objection filed by the assessee and directed the deletion of the adjustment made by the lower authority.

4. The Revenue's appeal challenging the allowance of exemption was adjudicated by the tribunal. The Revenue argued that neither exemption u/s 11 nor u/s 10(23C)(iiiab) should be allowed due to the alleged belated filing of documents. However, the tribunal, having already allowed the cross objection and established the timely filing of documents, dismissed the Revenue's appeal, finding no merit in the Revenue's contentions.

In conclusion, the tribunal dismissed the Revenue's appeal while allowing the cross objection filed by the assessee. The judgment clarified the compliance requirements for exemption claims and emphasized the importance of timely filing of income tax returns and audit reports in determining eligibility for exemptions under the Income Tax Act.

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