2026 (4) TMI 839

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....r ["AY"] 2020-21, the assessee has filed this appeal on following grounds: "1. On the facts and in the circumstances of the case and in law, the Ld. Joint Commissioner of Income Tax (Appeals)-2, Pune [hereinafter referred to as 'the Ld. Jt. CIT(A)] has erred in not allowing the benefit of exemption u/s. 11 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') without appreciating that the assessee trust had duly filed its return of income and Audit Report in Form No. 10B within due date u/s. 139(1) of the Act and thus, the exemption u/s. 11 of the Act may kindly be allowed to the assessee trust. 2. On the facts and in the circumstances of the case and in law, the Ld. AO and the Ld. Jt. CIT(A) have ....

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....such that the assessee-institution filed its return of income of AY 2020-21 on 07.01.2021 u/s 139(1) [due date was 15.02.2021] in ITR-7 declaring a total income of Rs. 20,080/- after claiming exemption u/s 11/12. The AO processed assessee's return vide intimation dated 25.12.2021 u/s 143(1) at a total income of Rs. 27,42,960/- after denying the exemption claimed by assessee. The assessee filed an application dated 27.03.2023 u/s 154 to AO seeking rectification of intimation and allowing exemption. The AO, however, rejected assessee's application vide rectification-order dated 11.05.2023 citing as under: "After considering the application and facts of the case, the application of the assessee is hereby rejected in view of the follow....

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.... 3. Ld. AR for assessee at first explained the reason of delay in filing first-appeal before CIT(A). He drew us to the impugned rectification-order passed by AO u/s 154. He demonstrated that the said order does not bear Document Identification No. (DIN). Therefore, the assessee got an understanding that the order passed by AO u/s 154 was null and void in absence of DIN and no appeal was required to be filed to CIT(A) against same. However, later on seeing the demand appearing as outstanding against assessee, the assessee filed appeal to CIT(A) with a condonation application. The assessee explained this entire factual matrix to CIT(A) which is re-produced in Para 2.2 of impugned order of first-appeal passed by CIT(A), as under: "2.....

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....g appeal one of which stopped appellant to file the appeal in time, it be kindly condoned for delayed submission of appeal and appeal be kindly entertained and oblige." 4. Thus, Ld. AR submitted that there was a sufficient cause for delay in filing first-appeal before CIT(A) which should be condoned by this bench. 5. Having said thus, Ld. AR next submitted that in present case, the admitted fact (as can be seen from rectification-order passed by AO, reproduced above) are such that the assessee filed Form No. 10B on 30.12.2020 before filing return of income on 07.01.2021. However, the Form No. 10B was not accompanied by audited accounts (i.e. audited Income & Exp. A/c, Balance-Sheet, etc.), which was a technical lapse on the part of as....

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....re - Indore Contract Bridge Association Vs. CPC, Bangalore in ITA No. 403/Ind/2022 order dated 18.04.2023 (b) ITAT, Indore - Navratna Sukrat 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 16.06.2....

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....urred due to a bona fide misunderstanding and not on account of any deliberate or mala fide conduct. It is a settled principle that substantial justice should prevail over technical considerations. Therefore, the delay in filing the appeal before Ld. CIT(A) deserves to be condoned and we do so. (ii) So far as the allowability of exemption u/s 11/12 in case of delayed filing or defective filing of audit report in Form No. 10B is concerned, we find that the issue is no longer res integra and stands settled in favour of the assessee by various judicial pronouncements as relied upon by the Ld. AR. It is observed that in the present case, the assessee had admittedly filed Form No. 10B before filing of return of income, though without en....