TaxTMI 
TaxTMI 
2025 (7) TMI 1669
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....jurisdictional Commissioners of Income Tax, as per the Central Board of Direct Taxes (CBDT) Circular No. 02/2020 dated 03/01/2020. 2. Whether, on the facts and in the circumstances of the case and in law, the Id. Addl/JCIT(A) should have directed the assessee to approach the competent authority, Commissioner of Income Tax(Exemption), for filing an application for condonation of delay. 3. The appellant reserves his right to add, amend or alter the grounds of appeal." 2. Heard the learned Representatives of both sides and case-records perused. 3. The exact controversy involved in present case is: Whether or not the assessee was entitled to exemption u/s 11/12 as claimed in the return of income when the audit-report (Form No. 10B) was not filed by the due date prescribed for filing same but subsequently filed before filing of return of income? 4. The precise facts are such that assessee is a charitable trust registered u/s 12AB of the Act by Income-tax Department and accordingly entitled to exemption u/s 11/12 of the Act. For AY 2021-22 under consideration, the assessee filed return u/s 139(1) on 10.03.2022 (before due date of 15.03.2022) declaring total inc....
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....ts and circumstances, the intention of the appellant is clear in filing the return and audit reports as per the due dates. Filing the audit report with a delay of 6 days a curable defect. The intention of the Department is to get the compliance of the appellant to the provisions of Act and see that delay can't be used for making any manipulation in the books of account. In the instant case, in my considered opinion, the appellant has filed audit report in form- 10B before filing of the return albeit with a little delay in meeting the due dates is only procedural lapse and the same is condoned. The AO is directed to allow the exemption to the trust u/s 11 of the Act. 7.0. As a result, appeal of the appellant is allowed." 4.2 Now, the revenue is aggrieved by FAA's order and has come in this appeal before us. 5. Ld. DR for revenue/appellant contended that the furnishing of audit- report in Form No. 10B by due date is a pre-condition for allowability of exemption u/s 11/12. Since the assessee has not fulfilled such condition, the AO has rightly denied assessee's claim of exemption u/s 11/12. Ld. DR further contended, referring to the Grounds raised by revenue as re- ....
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....krat Foundation Vs. CPC, Bangalore, ITA No. 390/Ind/2022 dated 21.04.2023 (c) ITAT, Indore - DCIT Vs. Shri Vaishnav Polytechnic College, Indore ITA No. 469/Ind/2018 order dated 06.11.2020 (d) ITAT, Jodhpur - ITO, Exemption Ward Vs. Society for Education Conscietisation Awareness & Training, ITA No. 461/Jodh/2018 dated 06.05.2019 (e) ITAT, Ahmedabad - Puravanchal Lokhit Mandal Vs. ITO, Exemption Ward, Vadodara, ITA No. 966/Ahd/2019, dated 30.11.2022 (f) ITAT, Ahmedabad - Hari Gyan Pracharak Trust Vs. DCIT, CPC, Bangalore in ITA No. 245/Ahd/2021 order dated 16.06.2023 (g) Hon'ble Gujrat High Court - Sarvodaya Charitable Trust Vs. ITO, Exemption (2021) 125 taxmann.com 75 (Gujrat) (h) Hon'ble Gujrat High Court - Indian Panel Board Manufacturer Vs. DCIT Tax Appeal No. 655 of 2022 dated 21.03.2023. 7. We have heard rival contentions of both sides and examined the present case in the light of judicial decisions. After a careful consideration, we have following analysis and adjudication: (i) So far as allowability of exemption u/s 11/12 in a situation of delayed filing of audit report, the issue is settled in favour of assessee by....
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....r and the assessee should not be denied the legitimate exemption, when the assessee is genuinely doing charitable activities for the welfare of public and satisfying all conditions prescribed in income-tax law for being entitled to exemption. Ld. AR submitted that if the audit-report obtained by assessee on 08.06.2017 but filed on 03.04.2019 / 04.05.2019 is accepted, the assessee would be entitled to the benefit of exemption. Ld. AR placed a heavy reliance on the latest decision of ITAT in Savitri Foundation Vs. ITO, ITA No. 1925/Mum/2021 (AY 2018-19) order dated 01.08.2022 wherein the AO made processing of return u/s 143(1) denying exemption u/s 11 to assessee for the very same reason of non-uploading of audit report before filing of return but subsequently the assessee uploaded audit-report during the course of first-appeal; when the matter reached ITAT, the Mumbai Bench has allowed exemption to assessee. Ld. AR submitted that the decision taken by ITAT is directly applicable to assessee. Ld. AR also submitted that the decision of Hon'ble Supreme Court in Wipro Ltd. 446 ITR 1 relied upon by Ld. CIT(A) is quite distinguishable for the reasons that (i) the said decision involved de....
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.... 5. In my considered view non-filing of Audit Report in Form 10B along with Return of Income is merely a procedural defect which is rectifiable. If the Audit Report was available with the assessee at the time of filing of Return of Income and was not filed due to bonafide reasons the benefit of exemption under section 11 cannot be denied if otherwise assessee is eligible to claim the same. 6. The Hon'ble Bombay High Court in the case of CIT vs. Mumbai Metropolitan Regional Iron & Steel Market Committee (supra) has held that late filing of required documents would not disentitle the assessee from availing benefit of section 11 of the Act. Thus, in the facts of the case and in the light of decision of Hon'ble Bombay High Court, I deem it appropriate to restore the file back to Assessing Officer for de novo assessment after considering the audit report field by the assessee, in accordance with law. 7. In the result, impugned order is set aside and appeal by assessee is allowed for statistical purposes." 13. We also gainfully refer another recent decision of ITAT, Ahmedabad Bench in the case of M/s Shardaben Education Trust, Gandhinagar Vs. ITO....
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....stries reported in 201 ITR 325, the relevant extract of the judgment is reproduced as under: "In our view, the aforesaid reasoning of the Allahabad High Court and the Patna High Court would squarely apply to the facts of the present case. The provision about furnishing of the auditors' report along with the return has to be treated as a procedural provision, directory in nature, and its substantial compliance should suffice, meaning thereby that such report should be made available by the assessee to the Assessing Officer latest when the question of framing of assessment is taken up by the Income-tax Officer and when he applies his mind to the claim of the assessee and if by that time, the assessee has put his house in order and has furnished the report of the auditor for supporting the return, he can be said to have satisfied the requirement of section 80J(6A) of the Act." 12.2 In view of the above we hold that the assessee cannot be denied the benefit of exemption for which it is entitled merely on the lapse of procedural requirement i.e. delay in filing the audit report in the prescribed form. In the judgment cited above, it was provided that the audit repo....