2025 (8) TMI 364 - AT - Income Tax

Delayed Filing of Form 10B Allowed Under Section 11 Due to Technical Glitches; AO Directed to Accept Audit Report

The ITAT Ahmedabad allowed the assessee's appeal regarding the delayed filing of Form 10B under Section 11. The assessee submitted Form 10B after filing ... Exemption u/s 11 - procedural delay in filling form 10B i.e. after filling of return of income - HELD THAT:- It is pertinent to note that the assessee has submitted the Form 10B after invoking Section 154. Once the assessee was aware that due to the technical glitches the assessee could not upload the Form 10B along with return of income which was filed on 29.12.2022. The fact remains that the Audit Report was obtained prior to the submissions of the return of income (Audit Report dated 14.09.2022). Thus, the Assessing Officer is directed to take on record Form 10B and rectify the order accordingly. This direction is the factual centric to the present case and hence should not be taken as precedent. Appeal of the assessee is allowed for statistical purposes. ISSUES: Whether exemption under Section 11 of the Income Tax Act, 1961 can be denied due to procedural delay in filing Form 10B.Whether the delay in filing Form 10B can be condoned or rectified under Section 154 of the Income Tax Act, 1961.Whether expenses incurred for the object of the organization qualify for exemption under Section 11.Whether 15% of accumulated income under Section 11(1)(a) is exemptible.Whether expenses can be allowed against receipts when exemption under Section 11 is denied.Whether interest and fees under Sections 234A, 234B, 234C, and 234F of the Income Tax Act, 1961 can be charged in these circumstances. RULINGS / HOLDINGS: The Court held that the denial of exemption under Section 11 solely on the ground of 'mere procedural delay in filing Form 10B' is not justified where the Audit Report was obtained before filing the return of income.The Court directed that the Assessing Officer is to take on record the Form 10B filed after invoking Section 154, thereby recognizing that the delay was 'rectifiable under section 154 of Income Tax Act, 1961.'The Court did not make a definitive ruling on the exemption of expenses incurred for the object of the organization or on the 15% accumulated income exemption, as the primary focus was on the procedural issue regarding Form 10B.The Court did not address the issue of allowance of expenses against receipts where exemption under Section 11 is denied.The Court did not expressly rule on the charging of interest and fees under Sections 234A, 234B, 234C, and 234F in this order. RATIONALE: The Court applied the provisions of Section 11 of the Income Tax Act, 1961 concerning exemption for charitable trusts, which requires filing of Form 10B along with the return of income.The Court recognized the legal principle that procedural delays in filing mandatory forms can be condoned or rectified under Section 154, which provides power to rectify mistakes apparent from the record.The Court emphasized the factual matrix that the Audit Report (Form 10B) was obtained prior to filing the return of income, and the delay in uploading was due to technical glitches, thereby justifying rectification.The Court clarified that the direction to accept Form 10B filed belatedly is 'factual centric to the present case and hence should not be taken as precedent,' indicating a limited scope ruling.