RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY,DELHI vs. ITO WARD EXEMPTIONS 2(4), DELHI, DELHI

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ITA 3511/DEL/2026Status: DisposedITAT Delhi10 August 2026AY 2023-245 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that filing Form 10BB is a procedural requirement and its substantial compliance is sufficient. The delay in furnishing the audit report should not lead to denial of exemption, especially when the accounts were duly audited and the correct form was eventually filed.

What were the facts?

The assessee, a charitable society, claimed exemption under Section 11. The CPC denied this exemption because Form 10BB was not filed on time, citing a bona fide error by the auditor who filed Form 10B instead. The assessee later filed the correct Form 10BB.

What were the issues?

Whether denial of exemption under Section 11 is justified solely due to a procedural error in filing the audit report (Form 10BB) late, despite substantial compliance.

Which sections of the Income-tax Act were involved?

Section 11,Section 10(23C),Section 13(10),Section 154,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI SATBEER SINGH GODARA, JUDICIAL & SHRI NAVEEN CHANDRA

आयकर अपीलीय अिधकरण, िद�ी पीठ�, नई िद�ी INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI BENCH: A BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA 3511/DEL/2026 िनधा�रण वष�/Assessment Year: 2023-24) RAM SHARAN KHAJANI DEVI ITO WARD EXEMPTIONS MEMORIAL CHARITABLE 2(4), DELHI SOCIETY CIVIC CENTRE, NEW DELHI H.NO.377, GHOGA , BAWANA Vs. DELHI-110002, DELHI S.O, SANOT, DELHI, DELHI- 110039, DELHI अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of AABAR3549M Assessee:

अपीलाथ� �ारा/Appellant represented by: Sh Parikshit Agarwal,CA ��थ� �ारा/Respondent Sh Zafarul Haque Tanweer,CIT DR represented by: सुनवाई की तारीख / Date of conclusion of hearing: 10-Aug-2026 घोषणा की तारीख / Date of pronouncement: 10-Aug-2026 आदेश / ORDER PER SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER: This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax, Appeal,

ITA 3511/DEL/2026 RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY Addl/JCIT(A)-1, Visakhapatnam [‘CIT(A)-Visakhapatnam’ in short] dated 03.12.2025 arising from the intimation order dated 06.01.2025 under section 154 of the Income-Tax Act, 1961 for A.Y. 2023-24. 2. The Assessee has raised the following grounds of appeal:

1.

That on the facts, circumstances and legal position of the case, Worthy CIT(A), in Order No. NFAC/2022-23/10426968 has erred in passing order dtd. 03.12.2025 in contravention of provisions of S. 154 of Income Tax Act, 1961(hereinafter referred to as “Act”). 2. That on the facts and circumstances of the case, the Worthy CIT(A) has erred in upholding the denial of exemption u/s 11 & 12 of the act, solely on the ground of filing Form-10B instead of Form-10BB on account of bona fide error of the auditor, without appreciating the duly audited books of accounts and subsequent filing of correct Form- 10BB, ignoring that the appellant has claimed exemption u/s 11 and 12 in its duly filed ITR. 3. That on facts, circumstances and legal position of the case, the Worthy CIT(A) has erred upholding the action of the CPC in re- computing the appellant’s taxable income at Rs. 29,22,950/- by erroneously invoking the provisions of s. 13(10) or the twenty-second proviso to section 10(23C) of the act, ignoring the appellant’s registration u/s 12AB(1)(b) and application of income towards its charitable objects and activities. 4. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) has erred in upholding the adjustment made by Ld. AO during processing/ rectification proceedings u/s 143(1) / 154, which is beyond the scope of those sections. 5. That on facts, circumstances and legal position of the case, the order passed by the Ld. AO and then by Worthy CIT(A) deserves to be quashed since the same have been framed in extreme haste and without affording reasonable opportunity of being heard to the appellant. 6. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.” 3. At the outset, it is noticed from the appeal record that there is a delay of 31 days in filing the appeal before the Appellate Tribunal. Considering the reasons stated by the assessee the delay is hereby

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ITA 3511/DEL/2026 RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY condoned in light of Supreme Court decision in the case of Collector, Land Acquisition vs. Mst. Katiji in (1987) 167 ITR 471. 4. Brief facts of the case are that the assessee is a charitable society registered under the Societies Registration Act and also holds valid registration under section 12AA of the Act and approval under section 80G of the Act. The assessee duly filed its ITR on 21.11.2023 and claimed deduction under section 11 of the Act. CPC has processed the ITR under section 143(1)(a) of the Act on 25.11.2024 where exemption u/s 11 of the Act was denied. 5. The CPC held that where the total income of the trust or institution claiming exemption u/s 11 or 10(23C)(iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C)(via) exceeds the maximum amount which is not chargeable to tax under Income Tax Act but less than or equal to Rupees 5 crore, the assessee is required to file audit report in Form 10BB at least one month prior to the due date for furnishing return u/s 139(1). As the assessee has not E-filed the Audit Report in Form 10BB, the income chargeable to tax will be recomputed as per the provision of Section 13(10) or 22nd proviso to Section 10(23C) of the Income Tax Act as applicable. 6. Aggrieved by the order of ld. AO, assessee was in appeal before the ld. CIT(A). The ld. CIT(A) dismissed the appeal. 7. Aggrieved, assessee is now in appeal before us. Page 3 of 6

ITA 3511/DEL/2026 RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY 8. Before us, ld. Counsel for the assessee states that the sole issue is filing Form 10B instead of Form 10BB on account of bona fide error of the auditor. The ld. Counsel states that the assessee’s books of accounts are duly audited and subsequently, filed the correct Form 10BB. 9. On the other hand, ld. DR relied on the order of the ld. CIT(A). 10. We have heard the rival submission and perused the material available on record. We find that the Revenue has not rebutted the fact that the accounts of the assessee was duly audited. We find that the assessee initially filed Form 10B and subsequently filed Form 10BB on 15.07.2025. Filing of Form 10BB being a procedural requirement, we apply the decision in the case of CIT vs. Gujarat OU AND Allied Industries Ltd. [1993] 201 ITR 325 (Guj.) wherein it is held that the provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. The hon’ble Gujrat High Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either before the Income-tax Officer or before the Page 4 of 6

ITA 3511/DEL/2026 RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY appellate authority by assigning sufficient cause. Following the aforesaid judicial precedent, we allow the assessee’s appeal and direct the AO to accept the Form 10BB and grant exemption under section 11 of the Act. 11. In the result, appeal filed by the assessee in ITA No.3511/Del/2026 is allowed. Order pronounced in the open court on 10-Aug-2026.

Sd/- Sd/- SATBEER SINGH GODARA NAVEEN CHANDRA JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08.09.2026 Priti Yadav, Sr. PS* Copy to: RAM SHARAN KHAJANI DEVI MEMORIAL CHARITABLE SOCIETY, H.NO.377, GHOGA , BAWANA S.O, 1 SANOT, DELHI, DELHI-110039, DELHI ITO WARD EXEMPTIONS 2(4), DELHI, 2 CIVIC CENTRE, NEW DELHI, DELHI-110002, DELHI

3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE TRUE COPY ASSISTANT REGISTRAR I.T.A.T., DELHI

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