TaxTMI 
TaxTMI 
2025 (6) TMI 818
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.... the Office of Assistant Commissioner of Income Tax - Circle 2 (Exemptions), Ward-1, Ahmedabad [hereinafter referred to as "Assessing Officer / AO"]under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'], for the Assessment Year 2017-18. Brief Facts of the Case 2. The assessee is a charitable trust duly registered under section 12A of the Act since 16.04.1984 and is also enjoying approval under section 80G(5) of the Act. The trust is engaged in the field of medical relief and education and is running a hospital and nursing college. For the year under consideration, the assessee filed its return of income under section 139(1) on 02.11.2017, declaring total income at NIL. The return was selected for scrutiny ....
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....s vague and unsupported by proper evidence. Since the appeal was not admitted, no findings were recorded on the merits of the additions made by the AO. The grounds relating to the exemption under section 11, the treatment of corpus donations, and claim of deduction under section 11(1)(a) were not adjudicated. 4. Aggrieved by the order of the CIT(A),NFAC, the assessee is in appeal before us and has raised the following grounds: 1. The Ld. CIT(A)_NFAC erred on facts and in law in not condoning the delay of 63 days in filing of appeal. 2. The Ld. CIT(A)-NFAC erred on facts and in law in not adjudicating the appeal on merits. 3. The Ld. CIT(A)-NFAC erred on facts and in law in not condoning the delay in filing of Form No. 10B. 4. The L....
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....he trust. The only ground for denial of exemption under sections 11 and 12 was the belated filing of Form No. 10B. It was submitted that the AO has not recorded any other adverse finding in the assessment order and has proceeded to treat even corpus donations aggregating to Rs. 71,38,000/- as income. 6. On the issue of condonation, the AR submitted that the delay in filing Form No. 10B ought to have been condoned in the light of various judicial precedents including the decision of the Hon'ble Gujarat High Court in Association of Indian Panelboard Manufacturers v. DCIT [(2023) 157 taxmann.com 550 (Guj)] and Anjana Foundation v. CIT (Exemptions) [(2024) 168 taxmann.com 462 (Guj)]. He also placed reliance on CBDT Circular No. 2/2020 dated 03....
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....ner as contemplated under section 119(2)(b). It was further submitted that the return of the assessee was not processed under section 143(1), and the assessment was completed under section 143(3), thereby requiring a stricter standard of compliance. The DR distinguished the judgment in Anjana Foundation on the ground that in that case, the return had been processed under section 143(1), whereas in the present case, the audit report was made available at the time of scrutiny assessment. 8. In rebuttal, the AR clarified that the audit had been completed in time, and the only lapse was in uploading the report electronically. He submitted that this was a technical default which should not result in denial of exemption when there was no adverse....
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....exemption under section 11 on the sole ground that the audit report in Form No. 10B was not available on record at the time of assessment. Notably, the AO has not disputed the genuineness of the activities of the trust, nor has he recorded any finding suggesting misapplication of income or violation of conditions of section 11 or 12. Even corpus donations aggregating to Rs. 71,38,000/- were brought to tax without examining whether they were received with specific direction. The CIT(A), in turn, declined to condone the delay of 63 days in filing the appeal before him and dismissed the appeal in limine without adjudicating the grounds on merits. The explanation furnished by the assessee supported by affidavit- stating that the delay occurred ....
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.... to ensure that the conditions of sections 11 and 12 are fulfilled, and if the audit is completed in time, mere technical delay in uploading the form should not defeat the substantive right of the assessee to exemption. The CBDT Circular No. 2/2020 dated 03.01.2020 also supports this view. It clarifies that the Commissioners of Income-tax are authorised to condone delay in filing Form No. 10B under section 119(2)(b), subject to satisfaction of reasonable cause. While the assessee may not have approached the CIT for condonation under that route, the principle underlying the circular is equally relevant that the delay in uploading the form, if not attributable to malafide intent and the audit is completed in time, ought not to disentitle a tr....