SPARSH ASSOCIATION OF DEVELOPMENT PROFESSIONALS & CONSULTANTS,REWA vs. ASSTT COMMISSIONER OF INCOME TAX, REWA

That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in not allowing benefit of section 11 and 12 of the Act only on technical ground that audit report in Form No. 10B was not filed Sparsh Association of Development Professionals & Consultants. electronically though the same was prepared in time which is unjust and unfair.

That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in justifying the action of the CPC of taxing gross receipts of Rs. 11,60,725/- without deducting revenue expenditure of Rs. 9,84,332/- which are duly shown in the return of income filed for the year which is unjust, unfair and deserves to be allowed.

That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in confirming action of the CPC for not calling audit report in Form 10B at the time of processing. Further, learned CIT(A) erred in not accepting he audit report at the time of appeals which is not fair.

That on the facts and in the circumstances of the case, charging of interest u/s 234B and u/s 234C is not justified.

That the appellate craves, leave to add, to urge, to alter or to amend any of the grounds of appeal on or before the date of hearing

The brief facts of the case are that, the assessee is registered under 12AA of the Act and is engaged in the educational activities. The assessee has filed the return of income on 30.11.2020 for the A.Y 2019-20 claiming benefit of section 11 of the Act and the return of income was processed u/s 143(1) of the Act on 08.02.2021 denying the benefit u/s 11 of the Act as the Form No. 10B was not filed electronically and the total income was determined at Sparsh Association of Development Professionals & Consultants. Rs.11,60,725/-.Aggrieved by the order the assessee has filed an appeal with the CIT(A).

The CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO but rejected the request for condonation of delay in filing the Form No. 10B electronically and sustained the addition and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Honble Tribunal.

At the time of hearing the Ld. AR submitted that the CIT(A) erred in sustaining the action of the A.O. Whereas the Audit Report in form No. 10B was signed by the Chartered Accountant before the due date of filing of return of income and was not uploaded electronically but the assessee has filed the return of income within the time and the assessee was facing the hardship in filling the Form.no 10B electronically and which was beyond the control and the reasons are genuine and are curable. The Ld. AR substantiated submissions relying on the factual paper book and judicial decisions and prayed for allowing the assessee appeal. Per Contra, the Ld. DR relied on the order of the CIT(A). Sparsh Association of Development Professionals & Consultants.

We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in not considering the facts of hardship and the reasonable cause for delay in uploading the Audit Report in Form.No.10B due to technical glitches. Further the Ld. AR explained that the delay is not an wanton act and the assessee has obtained audit report prior to filing of the return of income but was uploaded belatedly. Whereas the Audit Report in form No.10B was signed by the Chartered Accountant much prior to the filing of the return of income. and the assessee was dependent on the CA and Audit report was not uploaded electronically due to technical difficulties and thus caused hardship beyond the control of the assesse and reasons are genuine and it is a curable defect. We find the Honble High Court and Hon'ble Tribunal on the similar issue where there was delay in filling the Form.No.10B and it was treated as procedural defect and is curable and was restored to the lower authorities. We consider it appropriate to refer to the Judicial decisions as under:

With this the petition stands disposed of. No costs

Respectfully following the above judicial pronouncements by Juri ictional High Court, we have no hesitation in confirming the order passed by Ld. CIT(A) who has directed the Juri ictional Assessing Officer (JAO) to verify the Form No. 10B and allow the claim of exemption u/s. 11 and compute the total income. Thus the grounds raised by the Revenue is devoid of merits and the same is liable to be dismissed. Sparsh Association of Development Professionals & Consultants.

In the result, the appeal filed by the Revenue is hereby dismissed”

The appellate proceedings being the continuation of assessment proceedings merely because the assessee has not furnished at the threshold i.e. furnishing the audit report along with return of income, but filed during the assessment proceedings, and available even during the appellate proceedings, it cannot be stated that the assessee has failed to comply with the provisions so as to deny substantial justice by way of granting exemption. The Hon'ble Juri ictional High Court in a recent decision in Social Security Scheme of GICE Vs. CIT(E) (supra) in the matter of exemption provisions contained in section 11/12 of the Act, requiring filing of Form 10B alongwith return of income for claiming exemption, held the requirement of furnishing of report to be a mandatory requirement while that of filing the report alongwith return of income to be a procedural requirement. Conclusion made by the Hon'ble juri ictional High Court is as under:

Having heard learned advocates for the respective parties and having gone through the material on record, the only question which falls for consideration is whether respondent committed an error in passing the order by not condoning the delay in filing Form No10B along with the return filed. In the decision of this Court in Sarvodaya Charitable Trust (supra) this Court has observed that furnishing of audit report along with return filed is to be treated as a procedural requirement. It is though mandatory in nature the substantial compliance is required to be made In the case of Sarvodaya Charitable Trust (supra) the assessee had produced the audit report after processing the return under section 143(1). This Court in the Sparsh Association of Development Professionals & Consultants. said order has observed that the approach of the authority in the se type of cases should be equitable, balancing and judicious. Technically speaking respondent No. 2 might be justified in denying the exemption under section 11 of the Act by rejecting such condonation application, but an assessee, which is a public charitable trust for past 30 years which substantially satisfies the conditions for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay. Applying the said principle, the petition is allowed. The impugned order passed by respondent dated 12-3-2021 is quashed and aside. The impugned order of rectification under section 154 of the Act dated 25-1-2019 is also quashed and set aside. The application for condonation of delay filed by the petitioner before the respondent is allowed."

In the result, the appeal of the Revenue is dismissed”.

We find the facts of the present case are similar and identical. Hence considering the submissions, findings of the authorities, judicial precedence and the ratio of the judicial decision discussed above and on the similar Sparsh Association of Development Professionals & Consultants. directions the disputed issue is restored to the file of the Assessing Officer to adjudicate afresh after considering the Audit report and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the appeal. Accordingly, we allow the grounds of appeal of the assessee for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

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Sparsh Association of Development Professionals & Consultants. आदेशानुसार/BY ORDER, स"या"पत ""त ////