TaxTMI 
TaxTMI 
2025 (12) TMI 295
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.... the time of furnishing of return of income, the audit of accounts of the club was not complete and consequently, the return was filed without the audit report in Form-10B. The audit was completed on 13-12-2016 and the audit report in Form-10B was issued. Thereafter, on 28-12-2016, the CPC treated the return so filed as 'invalid' and thereafter on 29-03-2017, the return of income was processed, denying the claim of exemption u 11 of the Act, vide intimation u/s. 143(1) of the Act. 4. Thereafter, the assessee carried the matter in appeal before the Ld.CIT(A) and a copy of the audit report in Form-10B was furnished. The Ld.CIT(A), however, confirmed the denial of exemption u/s. 11 of the Act and did not take into consideration the audit report in Form-10B for the reason that the assessee has not filed a condonation application for delay in filing of the audit report before the competent authority. Against the said order, the assessee is in appeal before us. 5. In the aforesaid factual matrix, the Ld.AR submitted that since the audit report in Form 10-B has been duly furnished before the Ld.CIT(A) during the appellate proceedings, the audit report in Form-10B should have....
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....arlier as well as in the subsequent assessment years filed the audit report and got the exemption. The conduct of the assessee in earlier year and subsequent years would prove that due to the facts stated above there was delay in filing the audit report and the contention of the assessee was supported by the affidavit of Mohmad Iqbal Vohra (PB-4). The learned CIT(A) on proper appreciation of the facts and material on record in the light of the decisions of the Hon'ble Punjab & Haryana High Court and the Hon'ble Calcutta High Court rightly directed the AO to accept the audit report of the assessee and grant exemption u/s 11 of the IT Act." 7. Further reliance was also placed on the decision of the Hon'ble Gujarat High Court in the case of CIT(Exemptions) vs. Laxmanarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.com 548 (Gujarat), wherein the relevant findings are contained in para 7, which reads as under: "7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust....
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....ay by 19 days in filing such audit report. 9. We find that though time lines have been specified for furnishing such audit reports, at the same time, as can be seen in the instant case, the time lines have been extended by the CBDT given the circumstances prevailing at the relevant point in time. Further, the matter relating to condonation of delay in filing such audit reports has been dealt by the CBDT from time to time and necessary instructions have been issued to the competent authority for condoning such delay. In this regard, reference can be drawn to the CBDT Circular No. 16/2024, dt. 18-11-2024, wherein it has been provided that the CBDT in exercise of its powers conferred u/s. 119(2)(b) of the Act authorizes, the Pr. Commissioners of Income Tax (Pr.CsIT) / Commissioners of Income Tax (CsIT) to admit and deal with applications for condonation of delay in filing Form No. 9A/10/10B/10BB for AY. 2018-19 and subsequent assessment years where there is a delay of upto 365 days. It has been further provided that the Pr. Chief Commissioners of Income Tax (Pr.CCsIT)/ Chief Commissioner of Income Tax (CCsIT)/ Director Generals of Income Tax (DGsIT) to admit and deal with app....
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....), wherein it was held as under: "13. On the substantive issue of belated filing of Form No. 10B, we note that the Hon'ble Gujarat High Court in Association of Indian Panelboard Manufacturers (supra) has categorically held that where Form 10B was belatedly filed but audit was completed in time, the denial of exemption solely on that ground is not justified. The Hon'ble Court emphasized that the requirement of filing the audit report along with return is directory and not mandatory, and that the claim of exemption under section 11 should not be denied when there is substantial compliance with the law. Similarly, in Anjana Foundation case (supra) 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 reasonabl....