TaxTMI 
TaxTMI 
2026 (4) TMI 1475
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..... The JCIT(A) ignored that Form-10B was filed in time and Form-10BB was filed later to rectify the procedural error. 5. The JCIT(A) failed to consider case laws: CIT vs G.M. Knitting Industries Pvt Ltd. (2015) 376 ITR 456 (SC), CIT v. Monarch Educational Society (2020) 113 taxmann.com 311 (Mad). 6. The JCIT(A) erred in not allowing deduction of legitimate expenditure of Rs. 1,17,58,569 and taxed the gross receipts of Rs. 1,56,07,598/- 7. The JCIT(A) erred in applying maximum marginal rate instead of the rate applicable to AOP registered under Karnataka Societies Registration Act, 1960 as per CBDT Circular No.320 dated 11/01/1982. 8. The JCIT(A) erred in confirming levy of interest under section 234A, 234B and 234C without appreciating that these are merely consequential in nature and not leviable when the income itself is exempt under section 10(23C). 9. The JCIT(A) erred in passing an ex parte order without granting sufficient opportunity of hearing. 10. The appellant craves leave to add, alter or amend any of the above grounds at the time of hearing. 3. The Brief facts of the case are that assessee is a Society and register....
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....on order passed by the CPC dated 13/05/2023, the assessee preferred an appeal before the ld. Addl. /JCIT(A)/CIT(A). 5. The ld. Addl./JCIT(A)-6, Kolkata dismissed the appeal of the assessee by presuming that as more than 2 years have already elapsed since filing of the condonation petition before ld.CIT(E) and accordingly held that delay was not condoned by the ld. CIT(E). Further, the ld. Addl./JCIT(A)-6, Kolkata held that since the exemption u/s. 10(23C)(vi) was denied, the CPC had rightly taxed the entire gross receipts of Rs. 1,56,07,598/- at maximum marginal rate. Lastly, the ld. Addl./JCIT(A)-6, Kolkata held that as the Form No.10BB was only filed on 15/04/2023 instead of filing on or before 07/10/2022 and hence the claim of exemption u/s. 10(23C)(vi) of the Act was rightly denied as requirement to file the Form No.10BB within the specified due date is a statutory requirement mandated by the Act. 6. Again, aggrieved by the order of ld. Addl./JCIT(A)-6, Kolkata, the assessee has filed the present appeal before this Tribunal. 7. Before us, the ld. A.R. of the assessee vehemently submitted that while filing the return of income for the AY 2022-23, the assessee had inadve....
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....val under clause (i) of first proviso to clause (23C) of section 10 vide order in Form No.10AC dated 04/04/2022 effective from AY 2022-23 to AY 2026-27 by the ld. PCIT/CIT. The contention of the ld. A.R. of the assessee is that due to oversight the assessee filed its return of income by claiming exemption u/s. 11 of the Act instead of section 10(23C)(vi) of the Act and also the audit report in Form No.10B was filed instead of audit report in Form No.10BB. Before us, the ld. A.R. of the assessee contended that the assessee had also filed an application before the ld. CIT(E) on 15/04/2023 as per the provisions contained in section 119(2)(b) of the Act which is still pending for the disposal. On going through the order of ld. Addl./JCIT(A)-6, Kolkata, we noticed that the ld. Addl./JCIT(A)-6, Kolkata presumed that the delay was not condoned by the ld. CIT(E) as more than 2 years have already elapsed since filing of the said petition. On going through the rectification order passed by the CPC, we also noticed that the CPC had although accepted the claim of exemption u/s. 10(23C)(vi) of the Act, however determined the taxable income at Rs. 1,56,07,598/- solely on the ground that audit re....
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....on to comply with the audit requirement, and the error appears to be an inadvertent procedural mistake. We are of the considered opinion that genuine claims should not be denied due to inadvertent procedural errors, especially when the substantive conditions for exemption are met and the correct audit form is subsequently filed or available on record. In our view, the assessee society should not be penalized for an inadvertent procedural mistake when the accounts were duly audited by a chartered accountant and the audit report was also uploaded on or before the due dates and thus the intention to comply was evident. 9.2 We are of the considered opinion that the error is a procedural one, and the assessee has demonstrated its intention to comply by getting the accounts audited and subsequently filing the correct form. We are also of the considered opinion that the denial of exemption under Section 10(23C)(vi) to the assessee trust solely on the ground of inadvertently filing Form 10B instead of Form 10BB for AY 2022-23 is not justified. In holding so, we also take support & guidance from the judgment of the Hon'ble Supreme Court in the case of Mangalore Chemicals & Fertilisers Li....
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.... filed. In fact, the said issue came to be decided by the Karnataka High Court in the case in CIT v. Ace Multitaxes Systems (P.) Ltd. (2009) 317 ITR 207 (Karn), wherein it was held that when a relief is sought for under section 80-IB of the Act, there is no obligation on the part of the assessee to file the return accompanied by the audit report, thereby, holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee. That was also the view of the Delhi High Court in the case in CIT v. Contimeters Electricals (P.) Ltd. (2009) 317 ITR 249 (Delhi), wherein the Delhi High Court, by following the judgments of the Madras High Court in CIT v. A. N. Arunachalam (1994) 208 ITR 481 (Mad) and in CIT v. Jayant Patel (2001) 248 ITR 199 (Mad), held that the filing of audit report along with the return was not mandatory)-* but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met. That is also the consistent view of the other High Courts, including the High C....