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TaxTMI 
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2026 (3) TMI 385
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....sessee was also required to furnish the audit report in Form No. 10B within the prescribed due date. However, Form No. 10B was filed with a delay of 29 days beyond the stipulated due date. Consequently, the Ld. AO denied the assessee's claim for exemption under sections 11 and 12 of the Act. Aggrieved by the said disallowance, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) has set out the entire factual matrix relating to the assessee's appeal, which is reproduced hereunder: "STATEMENT OF FACTS 6. The statement of facts filed by the appellant in Form 35 are as under: "STATEMENT OF FACTS "1. The Appellant is a Public Trust registered under the Maharashtra Public Trusts Act, 1950 and also under section 12AB of the I.T.Act, 1961. It is assessed in the status of Association of Persons (A.O.P. Trust). The Appellant is established for charitable purposes. The Appellant has claimed exemption under sections 11 & 12 of the I.T. Act, 1961. 2. The Appellant has e-filed Return of Income for the Assessment Year 2023 2024 on 29.11.2023 declaring Total Income of Rs. 8,750/- and claimed Tax Refund of Rs. 1,01,089/-. 3. T....
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....e assessee has reasonable cause for filing the delay in form 10B. The said form was filed on 29.11.2023 which is delayed by 29 days and after that the return was filed u/sec. 139(1) for impugned assessment year dated 30.11.2023. So the said form was duly filed before the filing of return and the reason are duly narrated before the Ld. CIT(A) which is reproduced in the impugned appellate order page no.12 to 13 and the said observations of the Ld. CIT(A) is also reproduced as below: "Further the New Form 10B utility itself was first released on 24th August, 2023 and the Schema to file the Form was first released on 08th September, 2023. The New Form 10B required extensive compilation and verification of information to be reported and the time to compile and prepare the same was limited. Further, the accountants were not well versed with the statutory requirements and were unable to provide quickly and accurately the necessary information required to finalise the Audit Report in time. Thus there was a delay in finalizing the accounts of the Trust and finalizing the audit reports and signing of the financial statements for the financial year ending 31.03.2023 that resulted in ....
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.... 9 months. However, we find that this delay is not such that should deny the Petitioner from filing Form 10B with a delay of 24 days. We find that if this delay is not condoned, there will be genuine hardship to the Petitioner, inasmuch as, the Petitioner would be denied the exemption otherwise claimed under the provisions of Section 11 of the IT Act and which is a substantial amount. In the view that we take, we are supported by a decision of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust v. ITO (exemption) [2021] 125 taxmann.com 75/278 Taxman 148 (Gujarat). A Division Bench of the Gujarat High Court in Sarvodaya Charitable Trust (supra) took a view that in cases like the present one (delay in filing Form 10B), the approach of the Authorities ought to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation. This is more so, when the legislature has conferred wide discretionary powers to condone the delay on the authorities concerned. The relevant portion of this decision reads thus:- "31. Having given our due consideration to all the relevant aspects of the matter, we are of the vie....
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....ench in para no.12 to 14 is reproduced as below: "12. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, considering the fact that there is mere delay of 19 days in uploading of the audit report which has been uploaded well before the filing of the return of income and available on record at the processing of return of income and in absence of any adverse material on record or any mala fide alleged by the Revenue, we hereby condone the delay in filing of the audit report in Form 10BB and direct the AO to consider the audit report and decide the claim of exemption under ss. 11 and 12 in accordance with law after providing reasonable opportunity to the assessee." 13. The decisions of the Hon'ble Gujarat High Court also lay down a similar proposition. Respectfully following the same, in the instant case, the audit report in Form 10-B has been furnished by the assessee during the appellate proceedings before the learned CIT(A) and is thus part of the record. The assessee has explained the reasons for the delay in furnishing of the audit report due to delay in completion of the audit which has not been disputed by the Reven....
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.... already available on record. The reasons for delay, as placed before the revenue authorities, indicate that the revised utility and schema for the new Form No. 10B were released only in late August and early September 2023, requiring extensive compilation and verification of information. The delay of 29 days has been reasonably explained and no mala fide intention or deliberate default has been alleged by the revenue. The Hon'ble Bombay High Court in Kabeer Excellence Foundation (supra) has held that the requirement of furnishing the audit report is procedural in nature and that substantial compliance would suffice. The Court observed that the benefit of exemption should not be denied merely on account of delay in furnishing the audit report, particularly when the same is made available before completion of assessment proceedings. Similarly, the Coordinate Bench of the Tribunal in MIG Cricket Club (supra) has condoned comparable delays where the audit report was filed prior to completion of assessment and no prejudice was caused to the revenue. In the present case, the delay is marginal, the audit report was filed before the return of income and was available during processing, an....