TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 536
X X X X Extracts X X X X
X X X X Extracts X X X X
....dit report) not being filed within the extended time for the said A.Y. 2021-22 as stipulated in CBDT circular No. 01/2022 in F.No.225/49/2021/ITA-II dated 11.01.2022? 2. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) was erred in granting relief for the delay for filing of audit report within due date/extended time, when the remedy to deal with such instances lies with CIT(E) as specified in CBDT Circular No. 02/2020 dt. 03.01.2020 under the provision section 119(2)(b) of the Act?" 03. The assessee is a educational trust registered under Section 12A of the Act, who filed its return of income for A.Y. 2021-22 on 14th March, 2022, at a total income of Rs. nil. It was further revised on 29th March, 2022, at the same income. The return of income filed on 14th March, 2022, was processed under Section 143(1) of the Act on 10th August, 2022, under Section 143(1) of the Act. Subsequently, an order under Section 154 of the Act was passed on 7th March, 2023, holding that form No. 10B of the Act and 10BB of the Act has not been filed in time and accordingly, the exemption under Section 11 of the Act was denied and total income of the assessee was determined at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see has furnished form no.10B of the Act along with the return of income but not one month prior to the due date of filing of the return of income. For violation of these conditions, the CPC has held that assessee is not entitled to exemptions under Section 11 of the Act. He submitted that the learned CIT (A) has incorrectly relied upon the decision but ignoring statutory conditions and allowed the claim of the assessee, which is not correct. 06. The learned Authorized Representative submitted that assessee has filed form No. 10B along with the original return and revised return which is available before the CPC, therefore, CPC showing that assessee has not filed form no.10B of the Act is not correct. He further stated that the requirement of Act is to file from no.10B on or before the due date of filing return of income. Further, The ld CIT (A) has relied up on the decision of Honourable High court holding that such time limit is directory in nature and benefit of section 11 and 12 cannot be denied. Thus, there is no error in the order of the learned Commissioner of Income-tax (Appeals). 07. Learned authorised representative also submitted that it has also filed an application f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant, submissions made by the appellant and material on record. In ground no. 1 is against the rejection of exemption u/s 11 of the Act. The appellant trust is registered u/s 12A vide registration number was TR-28707 on 24.12.1991. The appellant also got provisional registration u/s 12A vide order dated 06.04.2022 which is effective for the A.Ys. from 2022-23 to 2024-25. On consideration of the ROI filed, Form 10B filed, orders u/s 143(1) and u/s 154, following picture emerges in the case - ORIGINAL REVISED Extended due date of filing of ROI 15.03.2022 31.03.2022 Date of filing of ROI 14.03.2022 29.03.2022 Date of filing of Form No. 10B 14.03.2022 29.03.2022 Date of processing of ROI u/s 143(1) 10.08.2022 10.08.2022 Date of rectification order u/s 154 07.03.2023 -- 4.1 In the order u/s 154 dated 07.03.2023, the reason for rejection of exemption u/s 11 of the Act has been stated to be "Suomoto for form 10b/10bb not filed." The screenshot of the reason is extracted and placed below for the sake of clarity - 4.2 As per the provisions of section 12A(1)(b) of the Act, where the total income of the trust or institution as computed under the Act without gi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e exemption by relying on the audit report and without having to ask the Assessee to furnish supporting documents in support of the claim. Such a procedural provision cannot be construed as mandatory because the defect can be cured at a subsequent stage. It is not the intention of the Legislature that the exemption u/s 11 should be denied merely because the audit report was not filed with the return. (ii) On facts, as the trust had filed, with the return, the audit report required to be given under the Bombay Public Trust Act, the claim that the audit report in Form 10B had also been obtained but had been omitted to be filed with the return was acceptable. Also, the AO was not justified in rejecting the retraction of the trustee. The AO did not controvert the averments in the retraction affidavit nor did he cross examine the trustee. Accordingly, the claim for s. 11 exemption was upheld. iii. Shree Bhairav Seva Samiti v. Income-tax Officer (Exemption) (ITA NO. 2225/MUM/2022) [A.Y. 2016-17] (Date of order - 08.12.2022) wherein it has been held that - We find that the Hon'ble jurisdictional High Court in case of CIT v. Xavier Kalavani Mandal (P.) Ltd. (supra) held that in order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the order of Hon'ble High Court of Gujarat in the case of Sarvodaya Charitable Trust vs. Income Tax Officer. (Exemption), [2021] 125 taxmann.com 75 (Gujarat). Full case law is enclosed for your reference. In this case also, the appellant was allowed the exemption u/s 11 and have relied on the case laws mentioned in the above paragraph and concluded that denial of exemption even if the form 10B is filed at a later stage is not justified. Thus the Assessee pleaded based on various judicial pronouncements that it is a sufficient compliance with the procedure, if the Audit Report is filed at any stage before the completion of assessment or even at the appellate stage. Thus the CPC cannot deny the exemption available u/s. 11 of the Act. The Ld. CIT(A) accepted the contention of the Assessee and held that the Assessee Trust is eligible to avail the exemption u/s. 11 of the Act as claimed in the Return of Income for the Assessment Year 2021-22, though the Assessee has filed Form No. 10B at a later stage. However in our case the form 10B is filed and whereas the order u/s 154 clearly mentions that the appellant has not filed the form 10B and thereby denied the exemption u/s 11 of the Inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ertainty of the due date of filing of the return which is duly extended by CBDT. Identical issue arose before the coordinate bench in case of Kedar Nath Saraf Charity Trust [2024] 161 taxmann.com 671 (Kolkata - Trib.) albeit for assessment year 2021 - 22 wherein coordinate bench held as under:- 4.1. It is an admitted fact that from March, 2020 to March, 2022, country was passing through Covid Pandemic and there were various restriction on the movements of the citizens and carrying out of the normal official works was hindered. It is also an accepted fact that many changes have been brought into the Act regarding procedure of filing of income-tax return as well as audit reports and certain technical glitches have been faced time and again. Also on account of change of the utility of furnishing the reports, the forms and change in the due dates have given rise to delay in furnishing of details and documents with the revenue authorities. Considering these aspects, CBDT firstly came up with a Notification dt. 03/01/2020 authorising the Commissioners to admit applications of condonation of delay in filing Form No. 10B for Assessment Year 2018-19 and subsequent Assessment Years, where ....