TaxTMI 
TaxTMI 
2025 (6) TMI 818
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....ion 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 assessment, and notices under section 143(2) and 142(1) were issued. During the course of the assessment proceedings, the Assessing Officer noted that the assessee had not furnished the audit report in Form No. 10B electronically along with the return or subsequently up to the time of assessment. The AO further recorded that no accumulation under section 11(2) had been claimed, nor any application made under section 119(2)(b) for condonation of delay. The Assessing Officer, therefore, held that the assessee had failed to comply with the condition laid down in section 12A(1)(b) and accordingly, denied exemption under sections 11 and 12. The AO treated the entire income of the assessee as taxable, including corpus donations aggregating to Rs. 71,38,000/- and completed the assessment under section 143(....
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....19, and the audit report in Form No. 10B was signed by the auditor on 27.07.2019. However, due to oversight and inadvertent error, the said audit report was not uploaded electronically within the prescribed time and was eventually filed online on 07.12.2019. It was emphasised that the delay was procedural in nature, and there was no intention to evade tax or suppress facts. The AR further submitted that the Assessing Officer has not disputed the fact that the audit was completed in time, nor has he pointed out any defect in the application of income or the nature of activities of the 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)....
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....ng by the AO on the charitable nature of activities. He further stated that the delay in filing the appeal before the CIT(A) was also supported by reasonable cause, and the CIT(A) erred in not condoning the delay and not deciding the case on merits. 9. We have carefully considered the rival submissions of both parties, perused the orders of the lower authorities, and examined the material placed on record including judicial precedents and circulars relied upon. The issue for adjudication in the present appeal lies in a narrow compass: whether the delay in e-filing of Form No. 10B by the assessee trust, despite timely completion of audit, can be condoned and whether the denial of exemption under section 11 of the Act merely on that ground is legally sustainable. 10. At the outset, it is not in dispute that the assessee is a trust duly registered under section 12A of the Act since 1984 and is also enjoying approval under section 80G(5). The assessee is engaged in bona fide charitable activities in the field of health and education. For the assessment year under consideration, it filed its return of income on 02.11.2017 declaring income at Nil. It is also undisputed that the aud....
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....arly, in Anjana Foundation v. CIT (Exemptions) [(2024) 168 taxmann.com 462 (Guj.)], the Hon'ble Court reiterated that the purpose of requiring Form 10B is 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 trust from exemption. The co-ordinate benches have consistently followed this legal position that exemption under section 11 cannot be denied merely due to delay in filing Form 10B when the audit was admittedly completed prior to the finalisation of assessment. 14. In the present case, the audi....