GURUDWARA SHRI GURU SINGH SABHA,DELHI vs. ITO (EXEMPTION) WARD 1(2), DELHI
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, A.M:-
This appeal by the assessee is preferred against the order of the ld. CIT(A) , Mumbai dated 11.07.2024 for A.Y 2020-21. 2. The ld. counsel for the assessee has filed an application for condonation of delay.
ITA No. 1878/DEL/2025 [A.Y. 2020-21]
Gurudwara Shri Guru Singh Sabha
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Having perused the condonation petition, we find that the assessee has sufficient cause for not filing the appeal in time. Accordingly, we condone the delay and admit the appeal. 4. The sum and substance of the grievance of the assessee is the confirmation of action of the CPC in disallowing assessee the exemption u/s 11 of the Income-tax Act, 1961 [the Act, for short] amounting to Rs. 81,30,497/-. 5. Short facts of the case are that the assessee is running a charitable trust and is carrying charitable activities for so many years. The CPC, while processing the return of income, denied the claim of exemption u/s 11 of the Act, merely on the basis that Form 10B was belatedly filed. 6. Aggrieved, the assessee is in appeal before us. 7. At the very outset, the ld AR argued that the return of Income was filed on 15.01.2021, due date of which is 15.02.2021. He further stated that the Form 10B was filed on 30.03.2021, the due date of which was 15.01.2021. CPC processed the return u/s 143(1) vide the intimation order dated 30.11.2021. The ld AR argued that mere delay in filing Form 10B which is directory and procedural in nature cannot
ITA No. 1878/DEL/2025 [A.Y. 2020-21]
Gurudwara Shri Guru Singh Sabha
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be a reason to deny the exemption of trust. The assessee has relied on the following decisions:
• M/s. Shilparamam Arts, Crafts and Cultural Society,
Hyderabad v. Asst. CIT, WP No. 31360 of 2023 dated
24.11.2023, Telangana High Court
• SLP dismissed by Supreme Court vide SLP No. 34100/2025
dated 04.08.2025
• CIT v.
Xavier
Kelavani
Mandal
Pvt.
Ltd.,
2012:GUJHC:26224-DB
• Delhi Brotherhood Society v. ITO, ITA No. 3382/Del/2024
dt. 16.05.2025, ITAT Delhi
• Puran
Chand
Arora
Charitable
Trust v.
ITO,
ITA
625/DEL/2024 dt.22.01.2025, ITAT Delhi
• Earthing Trust v ITO, ITA 882/Del/2024 dt. 10.01.2025,
ITAT Delhi
• Shakuntalam Bal Vikas Society v. ITO, ITA 3506/Del/2023
dt. 27.08.2024, ITAT Delhi
• Bhagwant Kishore Memorial Educational Society, v. ITO,
ITA 3657/Del/2023 dt. 14.08.2024, ITAT Delhi
Per contra, the ld. DR relied on the orders of the authorities below. 9. We have heard the rival submissions and have perused the relevant material on record. We find that the CIT(E) has denied the benefit of deduction u/s 11 on the ground that the Form 10B is mandatory and has been filed with a delay and that the delay has not been condoned. We find that there are catena of cases where the hon’ble High Courts have held that the filing of Form 10/audit report is directory and not mandatory and that if the audit report was filed at any time before the ITA No. 1878/DEL/2025 [A.Y. 2020-21] Gurudwara Shri Guru Singh Sabha
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framing of the assessment, the requirement of the provisions of the Act should be held to have been met. The hon’ble Delhi High Court in the case in Commissioner Of Income Tax V. Contimeters Electricals (P) Ltd -
(2009) 317 ITR 249(Delhi), following the judgements of the Madras High
Court in Commissioner Of Income Tax V. Arunachalam (A.N.)- (1994) 208
ITR 481 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 it and may be filed before finalization of assessment.
Similar view was adopted by the Hon'ble Madras High Court in the case of CIT Vs. A K S Alloys Pvt. Ltd. 18 Taxman.com 25 and the Karnataka
207(Karnataka). That was also the view of the Bombay in Commissioner of Income Tax v. Sivanand Electronics-(1994)209 ITR 63(Bom), and Gujarat High Court in Zenith Processing Mills v. CIT-(1996) 219 ITR 721
and Panjab and Haryana High Court in CIT V. Mahalaxmi Rice
Factory (2007) 294 ITR 631. 10. In the instant case, the Form 10B was filed on 30.03.2021 and the return of income was processed on 30.11.2021. We find that the assessee had obtained audit report in Form 10B before filing return of income, however filed the same belatedly but before completion of ITA No. 1878/DEL/2025 [A.Y. 2020-21]
Gurudwara Shri Guru Singh Sabha
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assessment/processing under section 143(1). The ratios of the above decisions therefore squarely applies to the facts of the case. We therefore, hold that filing of audit report in Form 10B before the due date for filing of return of income u/s 139(1) being only directory, the same may be accepted and benefit of exemption under section 11 may not be denied to assessee-trust. The delay in filing the Form 10B be condoned and we direct the A.O./CPC to allow exemption u/s 11 of the Act. Accordingly, the Grounds of Appeal of the Assessee are allowed.
11. In the result, the appeal of the assessee in ITA No. 1878/DEL/2025
is allowed.
The order is pronounced in the open court on 22.08.2025. [MADHUMITA ROY]
[NAVEEN CHANDRA]
JUDICIAL MEMBER
ACCOUNTANT MEMBER
Dated: 22nd AUGUST, 2025. VL/