2025 (1) TMI 596

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....law the ADDL/JCIT(A)-5. Mumbai erred in - 1. confirming the following actions of DDIT, CPC, Bengaluru - a. determining taxable income at Rs. 66,90,999/- against NIL return; b. not allowing exemption claimed u/s 11 of the I.T. Act, 1961 on the ground that Audit Report in Form 10B dated 23.09.2022 was filed on 21.10.2022 with the return of income; c. ignoring the Audit Report in Form 10B even though the same was available at the time of passing order u/s 143(1) of the Act; d. taxing the gross receipts of Rs. 66,50,999/- without allowing revenue expenditure incurred in a sum of Rs. 60,85,891/- on the activities of the Assessee; The above actions being arbitrary, fallacious, unwarranted and ....

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....the Assessee deserves to be allowed. 5. Per contra, the Ld. Departmental Representative vehemently submitted that the Audit Report in Form No. 10B was filed by the Assessee beyond the extended due date of 07/10/2022. The Assessee who has committed default in filing the Audit Report in Form No. 10B, cannot be get the benefit of Exemption u/s 11 of the Act. Thus, for dismissal of the Appeal of the Assessee. 6. We have heard both the parties and perused the material available on record. In the present case, the Assessee filed return of income on 08/10/2022, wherein the Assessee claimed exemption u/s 11 of the Act. Due date for filing the Audit Report in Form No. 10B was 07/10/2022, however, the Assessee uploaded the Audit Report in Form ....

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....lding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee. That was also the view of the Delhi High Court in the case in COMMISSIONER OF INCOME TAX v. CONTIMETERS ELECTRICALS (P) LTD -(2009) 317 ITR 249(Delhi), wherein the Delhi High Court, by following the judgements of the Madras High Court in COMMISSIONER OF INCOME TAX V. ARUNACHALAM (A.N.)- (1994) 208 ITR 481 and in CIT v. JAYANT PATEL (2001) 248 ITR 199 (Mad) held that the filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of th....