SANT SHRI ASARAMJI ASHRAM TRUST,DELHI vs. ITO WARD EXEMP.-2(1), DELHI

This assessee’s appeal raises the following substantive grounds: “1. That the Ld. Commissioner of Income Tax (A) has erred in not allowing the deduction of Rs. 46,30,420/- which is bad in law and hence needs to be annulled. 2. That the Ld. Commissioner of Income Tax (A) has erred in not allowing the deduction of Rs. 46,30,420/- and upholding the Intimation Order of the CPC, which is the deemed application under clause (2) of the Explanation to section 11(1) during the previous year 2020-21 and reported in the Audit Report Form No. 10B on the basis of Form No. 9A, filed timely and accepted on 03.02.2022 under rule 17(1). That it is prayed the legal deduction with due compliance may please be allowed to the assessee. 3. That the assessee craves indulgence to amend, alter, add or modify any or all the grounds of appeal and/or take additional grounds of appeal.”

A perusal of the assessee’s above extracted pleadings indicates that both the learned lower authorities have refused to its section 11 exemption claim for the sole reason of belated filing of tax audit report Form 10B, on or before the due date of filing of section 139(1) return. The Revenue’s case accordingly is that the above compliance of timely filing of Form 10B tax audit report is mandatory. Case law CIT vs. Xavier Kelavani Mandal (P.) Ltd., [2014] 41 taxmann.com 184 (Guj.) has already settled the issue in assessee’s favour that the foregoing compliance of filing/upholding form 10B tax audit report is directory than a mandatory provision. That being the case, I find merit in the assessee’s instant sole 3 | P a g e substantive grievance and direct the learned Assessing Officer to frame its consequential computation as per law after verifying all the relevant facts. 4. This assessee’s appeal is allowed. Order pronounced in the open court on 3rd June, 2025 (SATBEER SINGH GODARA)