Delayed Form 10B filing was held procedural, with exemption under sections 11 and 12 preserved when the audit report was on record.

Filing Form 10B after the prescribed time was treated as a procedural defect, not a failure of the substantive audit requirement for exemption under sections 11 and 12, because the report was available with the Assessing Officer before processing under section 143(1). The note applies the view that the statutory purpose is met when the correct audit report is on record before assessment, so delayed filing alone does not justify denial of exemption. It also states that the condonation power under section 119(2)(b) does not exclude appellate relief on the same facts.

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Issues: Whether filing Form 10B before processing of the return, though beyond the prescribed time, was sufficient compliance to allow exemption under sections 11 and 12.

Analysis: The entitlement to exemption under section 11 is conditioned by section 12A(1)(b), which requires audit and furnishing of the audit report in the prescribed form within the prescribed time. The delay in filing the report was treated as a defect in procedure rather than as a failure of the substantive condition, because the correct Form 10B was available with the Assessing Officer before processing under section 143(1). Following the view that the filing stage and timeline are procedural, and that the availability of the report before assessment satisfies the statutory purpose, the delayed filing did not justify denial of exemption. The Tribunal also noted that the power of condonation under section 119(2)(b) does not exclude appellate relief on identical facts.

Conclusion: Filing Form 10B before processing of the return amounted to sufficient compliance, and the denial of exemption under sections 11 and 12 was unsustainable.

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