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Facts
The assessee filed its return claiming Section 11 exemption and uploaded its Form 10B tax audit report after the due date but before the CPC processing. The lower authorities rejected the exemption claim for non-timely compliance.
Held
The tribunal held that the compliance of filing/uploading Form 10B tax audit report is a directory provision, not mandatory. Therefore, the action of the lower authorities rejecting the Section 11 exemption is reversed.
Key Issues
Whether the non-timely uploading of Form 10B tax audit report renders the Section 11 exemption claim invalid, considering the provision as directory.
Sections Cited
143(1), 11, 139(1)
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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A)- 1, Jaipur’s DIN and order no. ITBA/APL/S/250/2024- 25/1065178613(1), dated 28.05.2024 involving proceedings under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
Mr. Dhanesta vehemently argues during the course of hearing that both the learned lower authorities have rightly rejected the assessee’s section 11 exemption claim thereby making addition of Rs. 2,74,70,165/- for want of timely compliance of uploading of Form 10B tax audit report in section 143(1) processing dated 30th March, 2019 and upheld in the lower appellate discussion. His case in this factual backdrop is that the above compliance of filing/uploading Form 10B tax audit report is mandatory in nature.
Now come the basic relevant facts. A perusal of the case file indicates that the assessee had filed its return on 03.11.2017 claiming section 11 exemption and thereafter; its form 10B tax audit report was belatedly uploaded on 23rd November, 2018 i.e. much before the CPC’s processing in its case on 31st March, 2019. The Revenue’s case accordingly is that we need to uphold the learned lower authorities’ action disallowing section 11 exemption for its default in ensuring timely mandatory compliance of filing Form 10B tax audit report on or before the due date of filing section 139(1) return. All these facts make it clear that the assessee had very well filed the tax audit report in Form 10B before the CPC’s processing. That being the case, we hereby quote CIT vs. Xavier
2 | P a g e Kelavani Mandal (P.) Ltd., [2014] 41 taxmann.com 184 (Guj.) to conclude that once their lordships have already settled the issue in assessee’s favour and against the department, thereby holding the above compliance as directory provision, the learned lower authorities’ action rejecting section 11 exemption is hereby reversed in very terms. Learned Assessing Officer is directed to frame its consequential computation in assessee’s case after verifying all the relevant facts as per law.