Form 10B filing for section 11 exemption is directory; delayed submission alone cannot deny the exemption claim.

Filing of Form 10B for exemption under section 11 was treated as directory, so delayed submission by itself could not justify denial of the exemption. The Tribunal held that the assessee's claim under section 11(1) could not be rejected solely on the ground of belated filing of the audit report, and the disallowance under section 143(1) could not survive on that basis alone. The matter was restored for consequential computation after verification of the relevant facts, in favour of the assessee.

---

---

Issues: Whether the assessee's claim for exemption under section 11 could be denied solely because Form 10B was filed belatedly, and whether such filing is mandatory or directory.

Analysis: The appeal concerned disallowance made under section 143(1) in relation to the assessee's exemption claim under section 11(1). The sole reason adopted by the lower authorities was the alleged delay in filing the tax audit report in Form 10B by the due date for the return under section 139(1). The Tribunal accepted the view that filing of Form 10B is directory and not mandatory for denial of the exemption claim, and therefore the disallowance could not survive on that ground alone.

Conclusion: The denial of exemption merely for belated filing of Form 10B was held unsustainable, and the matter was restored for consequential computation after verification of relevant facts, in favour of the assessee.

Final Conclusion: The assessee's exemption claim could not be rejected solely on the ground of delayed filing of the audit report, and the appeal succeeded.

Ratio Decidendi: Compliance relating to filing of Form 10B for section 11 exemption is directory and cannot, by itself, justify denial of the exemption where the relevant facts otherwise support the claim.

---