2024 (11) TMI 1100 - AT - Income Tax

Tax Exemption Appeal Granted Due to Late Audit Report; Case Sent Back for Further Review and Representation Opportunities.

The Tribunal allowed the appeal concerning the disallowance of the section 11 exemption claim due to a late audit report submission. The case was remanded ... Disallowance of section 11 exemption - belated filling of form 10B audit report - Revenue’s case is that this tax audit report compliance is a mandatory provision for an assessee who claims section 11 exemption - HELD THAT:- The instant issue is no more res-integra in light of ACIT v. Xavier Kelvani Mandal Pvt. Ltd. [2011 (6) TMI 863 - ITAT AHMEDABAD] wherein their lordships have already settled the same at rest in assessee’s favour and against the department that such a compliance could be even made in first appellate proceedings before the CIT(A)/NFAC. Thus accept the assessee’s instant sole substantive grievance in principle and direct the learned CIT(A)/NFAC to read-judicate the lower appeal on merits as per law preferably within three effective opportunities subject to a rider that it shall be the taxpayer’s risk and responsibility only to plead and prove all the relevant facts within three effective opportunities in consequential proceedings. Assessee’s appeal is allowed for statistical purpose The appeal against the National Faceless Appeal Centre's order for assessment year 2022-23 was heard ex parte. The issue was the disallowance of section 11 exemption claim due to a belatedly filed audit report. Citing precedent, the Tribunal allowed the appeal, directing a re-adjudication by the CIT(A)/NFAC within three opportunities.