Section 11 exemption survives delayed Form 10B filing as the audit-report requirement is treated as directory.

Section 11 exemption was held available despite Form 10B being filed after the due date under section 139(1), because the audit-report filing requirement was treated as directory rather than mandatory. The Tribunal accepted that the report could be uploaded even during appellate proceedings, so the substantive charitable exemption was not denied on the basis of delayed compliance. The disallowance was therefore set aside, with only consequential verification and computation left to the Assessing Officer.

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Issues: Whether the assessee was entitled to section 11 exemption despite filing Form 10B after the due date under section 139(1) of the Income-tax Act, 1961, and whether such delayed compliance was mandatory or directory.

Analysis: The lower authorities had denied the exemption on the footing that filing the audit report in Form 10B within the prescribed due date was mandatory. The Tribunal held that the requirement was not mandatory but directory, and that the audit report could be uploaded even during appellate proceedings. The substantive claim for exemption under section 11 was therefore accepted, leaving only the consequential verification and computation to the Assessing Officer.

Conclusion: The assessee succeeded on the substantive issue and the disallowance of section 11 exemption was set aside, subject to consequential verification by the Assessing Officer.

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