Delayed Form 10B filing cannot by itself deny charitable exemption where the audit report was already on record.

Delayed filing of Form 10B did not, by itself, justify denial of exemption under sections 11(1) and 11(2) where the audit report was on record before processing of the return. The Tribunal treated the furnishing of the audit report as a substantive requirement, while the timing and manner of filing were procedural. It also held that recourse to condonation under section 119(2)(b) was only an additional remedy and not a compulsory precondition to consider the effect of late filing. The assessee was therefore entitled to the exemption, and the Assessing Officer was directed to recompute the assessment after accepting the audit report.

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Issues: Whether exemption under sections 11(1) and 11(2) could be denied merely because audit report in Form 10B was filed belatedly, and whether recourse to condonation under section 119(2)(b) was a compulsory precondition.

Analysis: The Tribunal followed the jurisdictional High Court's view that furnishing of the audit report is a substantive requirement, but the stage and mode of filing are procedural. Once Form 10B was available with the Assessing Officer before processing of the return, the requirement stood satisfied. The Tribunal further held that an application under section 119(2)(b) is only an additional remedy and does not extinguish the appellate authority's power to consider the effect of delayed filing. The earlier contrary view relied upon by the first appellate authority was therefore not accepted.

Conclusion: The assessee was held entitled to claim exemption under sections 11(1) and 11(2) notwithstanding delayed filing of Form 10B, and the matter was sent back to the Assessing Officer for recomputation after accepting the audit report.

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