TaxTMI 
TaxTMI 
2025 (12) TMI 1791
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....urn of Income, though such disallowances are beyond the scope of provisions of section 143(1)(a) of the I.T. Act, 1961. 2. The Ld. Addl. CIT(A) - 3, Hyderabad has erred in law and on facts of the case by partly allowing the appeal for statistical purpose, merely on the technical ground that the Appellant has not filed Audit Report in Form-10B in time and therefore, setting aside the matter to the file of the Ld. Assessing Officer, directing to verify whether the Appellant has filed application for condonation of delay in filing Audit Report in Form-10B. 3. The Ld. Addl. CIT(A) - 3, Hyderabad has also erred in law and on facts of the case by partly allowing the appeal or statistical purpose only and not deciding the appeal on merits even though the Appellant has duly e-filed Audit Report in Form 10B along with the Revised Return of Income filed u/s.139(5) on 31.12.2022. 4. The Ld. Addl. CIT(A) - 3, Hyderabad has also erred in law and on facts of the case by not taking into consideration that, Audit Report in Form 10B filed with the Revised Return on 31.12.2022 was already available on records when Intimation u/s.143(1) was issued on 04.04.2023 without taki....
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....cer, CPC, Bangalore under section 143(1) of the Act vide intimation dated 04.04.2023, wherein the total income was assessed at Rs.10,04,64,687/- and a demand of Rs.7,87,93,310/- was raised. The demand arose solely on account of denial of exemption under section 11 of the Act on the ground that Form No. 10B was not filed within the prescribed time. The Assessing Officer noted that although the assessee had filed Form No. 10 on 07.11.2022 and subsequently filed Form No. 10B along with the revised return, the same was not filed within the statutory time limit, and therefore the exemption claimed under section 11 was not considered while processing the return under section 143(1) of the Act. 4. Aggrieved by the intimation issued by CPC denying exemption under section 11, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). Before the CIT(Appeals), the assessee submitted that the delay in filing Form No. 10B was procedural in nature and that the exemption under section 11 could not be denied merely on account of such delay, especially when the audit report was eventually filed along with the revised return of income. The assessee also placed reliance on t....
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....used to the assessee by the action of the Assessing Officer in raising an exorbitant tax demand, which constituted a substantial percentage of the assessed income, without adjudicating the eligibility of exemption on merits. According to the Counsel, the Ld. Addl. CIT(A), by not quashing the adjustments made under section 143(1)(a) and by not granting complete relief, failed to exercise appellate jurisdiction properly. 8. In response, the Ld. DR placed reliance on the observations made by the Ld. CIT(Appeals) in their respective orders. 9. We have heard the rival contentions and perused the material on record. 10. In the case of Commissioner of Income Tax (Exemptions) vs. Laxmanarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.com 548 (Gujarat)[10-09-2024], the Assessee, a public charitable trust, did not upload audit report in Form 10B along with its return of income. Accordingly, Centralised Processing Centre (CPC) processed return under section 143(1) of the Act denying benefit of exemption under section 11 to assessee. During pendency of appeal before Commissioner (Appeals), assessee electronically uploaded Form 10B. The Commissioner (Appeals) admitted report in Form....
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....ending due dates and overwhelming workload of CA. the Hon'ble High Court held that since delay in filing Form 10B was due to inadvertent oversight of CA, same was to be condoned by authority concerned under section 119(2)(b) of the Act. 13. In the case of Brahmchari Wadi Trust vs. Commissioner of Income-tax (Exemption) [2025] 173 taxmann.com 54 (Gujarat)[17- 03-2025], Assessee-trust was running educational institutions. It filed its return of income claiming benefits under section 11 and 12 of the Act. The assessee also exercised option of accumulation of income as per provision of section 11(2) of the Act and accordingly filed Form No. 10 showing accumulation. However, assessee filed Form No. 10 belatedly, The Assessing Officer disallowed benefit claimed under section 11(2) of the Act on ground that assessee had failed to furnish Form No. 10 before date of furnishing return under section 139(1) - Assessee filed an application under section 119(2)(b) of the Act praying for condonation of delay in filing Form No. 10 and accordingly, the same was rejected. The Hon'ble High Court noted that it was not in dispute that assessee had explained in detail cause for late filing of....
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....ssing under section 143(1) was clearly beyond the scope of permissible adjustments under section 143(1)(a) of the Act. We further find that the learned CIT(Appeals), instead of adjudicating the issue on merits, merely restored the matter to the file of the Assessing Officer for verification of condonation proceedings, despite the fact that the audit report was already on record. This approach, in our considered view, is not sustainable in law. The legal position is now well settled that filing of audit report in Form No. 10B is a procedural requirement and not a substantive condition for claiming exemption under section 11 of the Act. Delay in filing such audit report is a curable defect and exemption cannot be denied merely on such technical ground, particularly when the audit report is furnished during assessment or appellate proceedings. In this regard, we draw support from the judgment of the Hon'ble Gujarat High Court in Commissioner of Income Tax (Exemptions) v. Laxmanarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.com 548 (Gujarat), wherein it was held that once Form No. 10B is filed during appellate proceedings, delay in filing the same stands rightly condoned and exemp....