Delay in Filing Audit Report: brief explained delay condoned so exemption claim can be considered after hearing.

Whether a 29-day delay in filing the audit report (Form No.10B) should be condoned to permit claim of charitable-exemption under the Income-tax Act. The tribunal applied the principle that the audit-report requirement is procedural and that substantial compliance suffices where delay is brief, explained, non mala fide and the report was available before completion of assessment under section 143(1); on those facts the delay was condoned and the assessing officer directed to consider the audit report and adjudicate the exemption claim after affording the assessee opportunity to be heard.

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Issues: Whether the delay of 29 days in filing Form No.10B (audit report) for Assessment Year 2023-24 should be condoned and, consequently, whether the assessee's claim of exemption under sections 11 and 12 of the Income-tax Act, 1961 should be allowed.

Analysis: The facts show Form No.10B was e-filed on 29.11.2023, 29 days after the extended due date of 31.10.2023, and before the return of income filed under section 139(1) on 29/30.11.2023; the audit report was therefore available at the time of processing under section 143(1). The delay has been explained by reference to late availability of the revised Form 10B utility and schema and the consequent need for extensive compilation; no mala fide or deliberate default is alleged and no prejudice to revenue is shown. Judicial authorities cited establish that the requirement to furnish the audit report is procedural and substantial compliance may suffice; coordinate Tribunal and High Court precedents have condoned comparable short delays where the audit report was available before completion of assessment and no adverse material existed. Applying these principles to the present facts, the brief, explained delay is amenable to condonation and permits consideration of the substantive conditions for exemption under sections 11 and 12.

Conclusion: Delay in filing Form No.10B for the assessment year 2023-24 is condoned; the assessee's appeal is allowed and the assessing officer is directed to consider the audit report and allow the exemption under sections 11 and 12 of the Income-tax Act, 1961 after giving the assessee a reasonable opportunity of being heard.

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