TaxTMI 
TaxTMI 
2025 (7) TMI 653
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.... 2. On the facts and circumstances of the case as well as law on the subject, even otherwise also the addition if any can be made in respect of net income i.e. after allowing the expenses and that gross amount cannot be charged to tax. 3. It is therefore prayed that the above addition made by Asst. Director of Income Tax, CPC and confirmed by Ld. ADDL/JCIT Commissioner of Income Tax (A) is prayed to be deleted. 4. Appellant craves leave to add, alter or delete any ground(s) either before of in the course of hearing of the appeal." 3. The brief facts of the case are that the assessee is a society registered under Societies Registration Act 1860 and also Public Trust registered under Bombay Public Trusts Act 1950. The assessee is engaged in running various educational colleges imparting diploma & degree courses in the field of engineering, management, pharmacy etc. The assessee is registered u/s 12A of the Income Tax Act & also u/s 80-G of the Income Tax Act 1961. For A.Y.2020-21 assessee filed its return of income on 18/02/2021 after the prescribed due date of 15/02/20021 declaring NIL total income. The Income & expenditure A/c of assessee showed a net surpl....
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....the income of the appellant." 7. The assessee is in appeal against the order passed by Ld. CIT(Appeals) dismissing the appeal of the assessee. On going through the rival contentions, we observe that both for the earlier as well as subsequent years, the assessee has e-filed Form 10B within the stipulated time frame. Further, for this year as well, we observe that the Form 10B contained a specific UDIN mentioning the date on which the Audit Report was prepared as 29-09-2019 (enclosed at pages 5-6 of Paper-Book submitted before us). Therefore, it is not the case that Auditor's Report in Form 10B had not been prepared by the Auditors but there was a procedural delay in e-filing of the same. 8. In the case of Brahmchari Wadi Trust vs. Commissioner of Income-tax (Exemption) [2025] 173 taxmann.com 54 (Gujarat) [17-03- 2025], the High Court held that where delay in filing Form No. 10 by assessee-trust had occurred due to internal administrative problems of assessee-trust, since assessee-trust for past many years had substantially satisfied conditions for claiming exemption under section 11, exemption under section 11 could not be denied for non-filing of Form No. 10 in time. 9. In....
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....tion/order under section 143(1) of the Act was passed by CPC, Bengaluru, the auditor of the assessee trust had already filed the audit report in form 10B, before such order/intimation under section 143 (1) of the Act was issued. From the facts placed on record before us, we see no deliberate/mala fide intention on the part of the assessee or it's auditor to file the audit report in form 10 B belatedly. 7.1 In the case of Shree Jain Swetamber Murtipujak Tapagachha Sangh v. CIT (Exemptions) [2024] 161 taxmann.com 114 (Bom.), the High Court held that where assessee-trust filed Form No. 10 beyond due date and assessee's auditor admitted to oversight that he did not consider provisions of Rule 17 and was under bona fide impression that since factum of accumulation of receipts was reported in audit report in Form No. 10B a separate statement in Form No. 10 was not required, in view of fact that delay was not intentional, assessee could not be prejudiced on account of an ignorance of rules admitted by professional engaged by assessee and thus, delay was to be condoned. 7.2 In the case of Social Security Scheme of GICEA v. CIT (Exemptions) [2023] 147 taxmann.com 2....
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.... 7.6 Accordingly, in light of the above judicial precedents cited above and the assessee's set of facts, we are of the considered view that the claim of application of income cannot be denied to the assessee only on the ground that the assessee/the auditor of the assessee omitted to file form 10B (auditor's report) along with return of income, when the same was submitted to the tax authorities before the order/intimation under section 143(1) of the Act was issued. 8. In the result, the above ground of appeal of the assessee is allowed. 13. It would be useful to reproduce the relevant extracts of the decision of jurisdictional Surat Tribunal dealing with an identical issue in the case of Premprakash Ashram Trust vs. ITO in ITA No. 284/Srt/2024 for A.Y. 2018-19 vide order dated 17.05.2024: "4. We have considered the submissions of both the parties and perused the record carefully. There is no dispute that the assessee-trust is having registration under section 12A/12AB of the Act. The assessee filed return of income on 29/08/2018. In the computation of income, the assessee claimed application of income under section 11/12 of the Act. The return of....
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....me Court was that in the original return of income, the assessee had claimed deduction under section 10B of the Act, whereas in the revised return filed under section 139(5) of the Act, assessee did not claim deduction under section 10B of the Act, and instead claimed benefit of carry forward of losses. It was in light of these facts that the Hon'ble Supreme Court held that on a plain reading of section 10B(8) of the Act, it is clear that for claiming the benefit under section 10B, the twin conditions of furnishing the declaration to the assessing officer in writing and that the same must be furnished before the due date of filing of return of income under sub-section (1) of section 139 are required to be fulfilled/satisfied. Therefore, the facts in the decision of Wipro were on a different footing and further, the issue for consideration in the Wipro case was also distinguishable, wherein the issue for consideration was that once the assessee had claimed benefit of section 10B in the original return of income, whether such benefit could be foregone by way of filing of revised return of income u/s 139 (5) of the Act (and the assessee could, in turn, avail the benefit of carry f....