SAMPOORNA SEVA CHARITABLE TRUST,ALAKNANDA, SOUTH DELHI vs. INCOME TAX OFFICER, WARD EXEMP 2(1), DELHI, CIVIC CENTRE, NEW DELHI

2.1 Ld. AR submitted that aggrieved against the above order, the assessee filed an appeal before the ld. CIT(Appeals), who upheld the said disallowance on the ground that he was not competent to condone the delay and accept the belated Form 10B. 2.2 Further, ld. AR submitted that mere delay in filing Form 10B cannot act as an impediment in the assessee seeking its lawfully entitled exemption and the assessee filed the same Form 10B before the appellate authority as well and the same is a matter of record. Furthermore, he submitted that it is not the case of the Revenue that the Form 10B was filed after the filing of return. In fact, the said Form was filed way before filing the return albeit with a delay of one day and that too solely because of the technical slags that frequently occur on the last dates of furnishing such particulars. In this regard, he relied on the following decision of ITAT wherein it was consistently held that conditions of filing Form 10B for availing benefit under section 11 are directory in nature and not mandatory, and that a mere delay in filing cannot be a bar to an assessee claiming lawful exemption :- (a) B. R. Hospital Research Institute v. ITO [2024] 167 taxmann.com 389 (Delhi - Trib.) (b) Bhagwant Kishore Memorial Educational Society v. ITO [2024] 209 ITD 179 (Delhi - Trib.)

2.3 Ld. AR submitted that the ld. CIT(A) while dismissing the appeal of the assessee has relied upon the judgment of the Hon'ble Supreme Court in CIT V. Wipro Ltd. [2022] 140 taxmann.com 223 (SC) and observed that time limit for filing Form 10B is mandatory. He submitted that ld. CIT (A) has observed this despite noting the difference in facts in the current instance vis-a-vis the factual scenario encountered by the Hon'ble Supreme Court. He further submitted that Hon'ble Gujarat High Court in CIT v. Laxmanarayan Dev Shrishan Seva Khendra [[2024] 167 taxmann.com 548 (Gujarat)], in a similar factual scenario where the Revenue relied upon the judgment in Wipro Ltd. (supra) to contend the mandatory nature of the timeline, held as under: “5. Reliance placed by the learned Senior Standing Counsel Ms. Maiihili Mehta for the appellant on the decision of the Hon'ble Supreme Court in case of Wipro Ltd. (supra) would not be applicable in the facts of the case, as in the facts of the present case, the assessee has claimed the exemption under Section 11 read with Section 12A(1)(b) of the Act which required the assessee to file Audit Report in Form of 10B of the Act which has nothing to do with claiming 100% exemption of total income in respect of newly established 100% Export Oriented Undertakings under Section 10B of the Act. Section 10B(8) of the Act requires the assessee to file an undertaking before the due date of furnishing of return of income under sub-section (1) of Section 139 of the Act before the Assessing Officer in writing that the provision of Section 10B of the Act may not be made applicable to him, otherwise the provision of this Section shall not apply to him for any of the relevant assessment year. …..

7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed Court in case of Sarvodaya Charitable Trust v. !TO (Exemption) in Application No.6097 of 2020 decided on 09th December, 2020/[2021J 125 taxmann.com 75/278 Taxman 148 (Gujarat) as well as the decision in case of Social Security Scheme of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious. In the facts of the case, when the assessee has already filed the audit report in Form 10B electronically on 27.02.2021 during pendency of appellate proceedings along with copy of audited financial statements, delay in filing the said form is rightly condoned by CIT(A) and the Tribunal.” 2.4 Ld. AR of the assessee, in the light of his above submissions and coupled with the legal precedents, prayed that the delay in filing Form 10B be condoned and the assessee is entitled to claim the sum of Rs.26,35,000/- in the form of exempt income, accordingly, the grounds of appeal

may be allowed.

3. On the other hand, ld. DR of the Revenue did not produce any contrary view to the judgments relied upon by the ld. AR of the assessee.

4. Considered the rival submissions and material placed on record. I observed that the assessee is a charitable institution and was claiming deduction u/s 11 of the Act. However, as per the provisions of section 10B, the assessee has to comply certain conditions failing which the assessee will loose the benefit the decision of Hon’ble Supreme Court in Wipro Limited was based on such strict interpretation of section 10B. In the present case, the assessee has to file the audit report in Form 10B before the due date as per Rule 12A(1)(b) of the Rules. I observed that Form 10B was relaxed by the CBDT in the earlier assessment years, therefore, it clearly shows that it is only directory in nature and not mandatory, since, it is in compliance with Rules framed for availing the benefit under the provisions of Section 11 and it is held that to be directory in nature. I find support from the decision of Hon’ble Madras High Court in the case of Shri Chandraprabhuji Maharaj Jain Juna Mandir Trust (supra), wherein it is held as under: “8. As noted by us earlier, the assessee filed the return of income for the assessment year under consideration on 02.04.2009, which was processed and intimation under Section 143(1) of the Act was issued on 21.01.2011. Thus, there was no assessment under Section 143(3) of the Act. The assessee, while filing the petition under Section 154 of the Act, on 22.03.2011, pointed out that the assessee filed the Form No.10 along with the Board Resolution along with the covering letter dated 01.04.2019. However, the mistake done by the assessee was to file hard copies before the Assessing Officer, and not filing the same along with the return of income, which they filed on 02.04.2019. Thus, on the date when the return was taken up for assessment, there was record to show that the assessee had intimated the department about the resolution passed by the Board of the assessee Trust and the statutory Form No.

5. In the above view, the Tribunal is eminently justified both in law and on facts in observing and holding as under.- "In this case, it is not in dispute that the audit report in prescribed form was obtained prior to filling of the return on 20/12/2006; therefore, there was no reason for the assessee to keep the audit report with it in order to loose the exemption. The assessee in the earlier as well as in the subsequent assessment years filed the audit report and got the exemption. The conduct of the assessee in earlier year and subsequent years would prove that due to the facts stated above there was delay in filing the audit report and the contention of the assessee was supported by the affidavit of Mohmad Iqbal Vohra (PB-4). The learned CIT(A) on proper appreciation of the facts and material on record in the light of the decisions of the Hon'ble Punjab & Haryana High Court and the Hon'ble Calcutta High Court rightly directed the AO to accept the audit report of the assessee and grant exemption u/s. 11 of the IT Act."