Section 11 exemption cannot be denied for technical non-filing of Form 10B when the audit report was timely on record.

Exemption under section 11 could not be denied where Form 10B was in fact digitally filed within the prescribed time and remained on record, but was missed during processing under section 143(1). The filing of the audit report was treated as a procedural requirement, and a mere technical defect or later revised submission could not defeat the charitable exemption. CBDT Circular No. 10/2019 was applied to support condonation of delay for earlier assessment years, reinforcing that substantive exemption should not be refused when compliance was otherwise effectively made. The assessee's claim under section 11 was therefore allowed.

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Issues: Whether exemption under section 11 of the Income-tax Act, 1961 could be denied on the ground that Form 10B was treated as not filed within time, despite the audit report having been digitally filed before the due date of return.

Analysis: The audit report in Form 10B was found to have been filed on 07.08.2016, within the prescribed time, and the denial of exemption arose from CPC's erroneous omission to notice the original filing while processing the return under section 143(1). The appellate authority had relied on a revised submission instead of the timely filed report. The CBDT Circular No. 10/2019 dated 22.05.2019 was applied to the effect that delay in filing Form 10B for earlier assessment years could be condoned, and the filing requirement was treated as procedural. The claim under section 11 was therefore not liable to be defeated by a mere technical defect when the audit report was already on record within time.

Conclusion: Exemption under section 11 could not be denied merely for alleged non-filing of Form 10B, and the assessee's claim was allowed.

Ratio Decidendi: A procedural requirement relating to filing of the audit report cannot be used to deny charitable exemption under section 11 when the report was in fact filed within the prescribed time and is on record.

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