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Issues: (i) Whether the delay in filing appeals before the National Faceless Appeal Centre (NFAC) was sufficiently explained so as to warrant condonation; (ii) Whether non-filing of audit report in Form No.10B within the due date or omission to mention details of registration/approval disentitles the assessee to exemption under Sections 11 and 12 of the Income-tax Act, 1961 and to approval under Section 80G(5)(vi).
Issue (i): Whether the delay in filing appeals before NFAC was sufficiently explained to condone the delay.
Analysis: The assessee is a registered society dependent on office-bearers and external professionals for tax compliance. The reasons for delay include non-receipt of intimations under Section 143(1) due to reliance on a deceased person who handled filings and a change in professional assistance; an affidavit from the secretary explaining these facts was placed on record. The Tribunal recognised that strict observations about self-responsibility of an individual appellant are not directly applicable to a trust/corporate entity that relies on office bearers and professionals. The Tribunal also noted precedent holding that exceptional circumstances (including death of the person handling compliance) can justify delayed action.
Conclusion: The delay in filing appeals before NFAC was satisfactorily explained and is condoned; the appeals on delay grounds are allowed in favour of the assessee.
Issue (ii): Whether non-filing of Form No.10B within the due date or omission to mention registration/approval details disentitles the assessee to exemption under Sections 11 and 12 and approval under Section 80G(5)(vi).
Analysis: The Tribunal applied settled law that filing of Form No.10B is a procedural requirement and directory in nature; non-filing before the due date does not automatically lead to disallowance under Sections 11 and 12. The Tribunal relied on higher authority precedent upholding that Form No.10B is procedural. With respect to omission of registration/approval details for AY 2021-22, the Tribunal noted precedence that active original registration under Section 12AA protects the assessee. Given these legal positions, the Tribunal found no substantive basis to sustain denial of exemption on these procedural grounds.
Conclusion: Denial of exemption for the years under consideration on account of non-filing of Form No.10B within the due date or omission of registration details cannot be sustained; conclusions are in favour of the assessee on merits.
Final Conclusion: The appeals are allowed; the impugned orders of the Commissioner of Income-tax (Appeals) dismissing the appeals on delay and denying exemption on procedural non-compliance are set aside, and the matters are restored to the Assessing Officer for fresh consideration of Form No.10AB and the returns on merits.
Ratio Decidendi: Procedural requirements such as filing of Form No.10B are directory and failure to file within the due date does not warrant automatic disallowance under Sections 11 and 12 of the Income-tax Act, 1961; sufficient justification for delay in institutional taxpayers (including reliance on office-bearers or professionals and exceptional events) warrants condonation of delay.
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