Section 11 exemption cannot be denied at processing stage merely for belated Form 10B filing before intimation

Exemption under section 11 should not be denied in processing under section 143(1) merely because Form 10B was filed after the return, where the audit report was on record before the intimation was issued. The CPC had the report at the time of processing, so no prejudice was shown to the Revenue and denial solely for belated filing was unjustified. The intimation was therefore required to be amended by taking Form 10B into account.

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Issues: Whether exemption under section 11 could be denied in processing under section 143(1) solely because the audit report in Form 10B was filed after the return but before processing.

Analysis: The Trust had filed its return claiming exemption and later filed Form 10B before the intimation was issued under section 143(1). As the audit report was available with the CPC at the time of processing, no prejudice was caused to the Revenue by the delayed filing. The denial of exemption only on the ground that Form 10B was not filed along with the return was not justified. Reliance was placed on the principle that exemption under section 11 cannot be denied merely for belated filing of Form 10B where the report is on record before processing.

Conclusion: Exemption under section 11 could not be denied merely because Form 10B was filed belatedly, and the intimation was directed to be amended by taking the audit report into account.

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