SHREE HARIKRUSHNA VELFARE TRUST,BHACHAU vs. THE ITO EXEMPTION WARD 1, RAJKOT, RAJKOT

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ITA 678/RJT/2026Status: DisposedITAT Rajkot06 August 2026AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the requirement of furnishing Form 10B is procedural and not mandatory. Following the Gujarat High Court's decision, the delay in furnishing Form 10B was condoned, and the Assessing Officer was directed to allow the exemption under Section 11.

What were the facts?

The assessee, a charitable trust, claimed exemption under Section 11. The exemption was denied under Section 143(1) due to delayed filing of the audit report in Form 10B. The CIT(A) dismissed the appeal, stating the delay in filing Form 10B could not be condoned by the appellate authority.

What were the issues?

Whether denial of exemption under Section 11 for delayed filing of audit report in Form 10B is justified. Whether the appellate authority can condone the delay in filing Form 10B.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. BRR Kumar & Shri Sonjoy Sarma

For Appellant: Shri D. M. Rindani, Ld. ARs &, Ms. Devina Patel, Ld. ARs
For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 29/07/2026Pronounced: 03/08/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before Dr. BRR Kumar, Vice President And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 678/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2017-18 ] Shree Harikrushna Velfare Trust The ITO (Exemption) Ward (1), 1 Swaminarayan Gurukul, National IT office, New Aaykar Bhawan, Vs. Highway, Bhachau-370140, Gujarat Vatiaka, Rajkot-360001, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAGTS6149E (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri D. M. Rindani, Ld. ARs & Ms. Devina Patel, Ld. ARs Respondent by : Shri Shishir Kumar, Ld. Sr. DR Date of Hearing : 29/07/2026 Date of Pronouncement : 03/08/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the Commissioner of Income Tax (Appeal) [hereinafter referred to as ‘Ld.CIT(A)’], dated 21.01.2026, which in turn arises out of an order passed by assessing officer u/s. 143(1) of the Act, dated 25.03.2019.

ITA No. 678/RJT/2026 Sh. Harikrushna Velfare Trust 02. Brief facts of the case are that the assessee is a charitable trust. The assessee filed its return of income for the Assessment Year 2017–18 on 01.12.2017, claiming exemption under section 11 of the Income-tax Act, 1961. The return was processed under section 143(1) of the Act, determining the total income at Rs.54,80,493/-, by denying the exemption claimed under section 11 of the Act on the ground that the audit report in Form No. 10B had not been furnished within the prescribed time. Dissatisfied by the said adjustment, the assessee preferred an appeal before the Ld. Commissioner of Income-tax (Appeals). The appeal was dismissed vide order dated 16.11.2021 on the ground of delay in filing the appeal. Aggrieved by the said order, the assessee preferred an appeal before the Tribunal. The Tribunal, vide its order dated 30.08.2023, set aside the order of the Ld. CIT(A) and restored the matter to his file with a direction to reconsider the assessee’s application for condonation of delay and to decide the appeal afresh in accordance with law.Pursuant to the directions of the Tribunal, the Ld. CIT(A) reconsidered the matter but again dismissed the appeal by holding that there was no infirmity in the order passed under section 143(1) of the Act. The Ld. CIT(A) observed that the power to condone the delay in filing Form No. 10B and the return of income vests only with the Commissioner of Income-tax (Exemption) and not with the appellate authority.

3.

Still aggrieved, the assessee is in appeal before the Tribunal.

4.

At the time of hearing, the Ld. AR submitted that there is a delay of 30 days in filing the present appeal before the Tribunal. An application seeking condonation of delay supported by an affidavit explaining the reasons for such delay was also filed. After considering the explanation furnished, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period. Accordingly, the delay of 30 days in filing the appeal is condoned and the appeal is admitted for adjudication.

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ITA No. 678/RJT/2026 Sh. Harikrushna Velfare Trust 05. On merits, the Ld. AR submitted that the denial of exemption under section 11 of the Act was solely on account of the delayed filing of the audit report in Form No. 10B, which is merely a procedural requirement. It was contended that the requirement of filing Form No. 10B is directory and not mandatory, and that the benefit of section 11 of the Act cannot be denied merely because the audit report was filed belatedly. Reliance was placed on the judgment of the Hon’ble Gujarat High Court in the case of Commissioner of Income-tax (Exemption) v. Laxminarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.con 548 (Gujarat), wherein it was held that the audit report in Form No. 10B can be furnished even during the course of the assessment/appellate proceedings and the benefit under section 11 of the Act cannot be denied on that ground alone. The Ld. AR further submitted that the said judgment has been consistently followed by the Tribunal in similar cases.

6.

The Ld. DR supported the orders of the lower authorities.

7.

We have heard the rival submissions and perused the material available on record. We find that the exemption under section 11 of the Act has been denied while processing the return under section 143(1) of the Act solely on the ground that Form No. 10B was not furnished within the prescribed time. It is not in dispute that the assessee has subsequently furnished the audit report electronically. The Hon’ble Gujarat High Court in the case of CIT (Exemption) v. Laxminarayan Dev Shrishan Seva Khendra (supra) has held that the requirement of furnishing the audit report in Form No. 10B is procedural in nature and that the benefit under section 11 of the Act cannot be denied merely because the audit report was furnished belatedly, provided it is available during the assessment or appellate proceedings. Respectfully following the ratio laid down by the Hon’ble jurisdictional High Court, we hold that the delay in furnishing Form No. 10B deserves to be condoned. Accordingly, we

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ITA No. 678/RJT/2026 Sh. Harikrushna Velfare Trust direct the Assessing Officer to allow the assessee’s claim for exemption under section 11 of the Act.

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on this 3rd day of August, 2026.

Sd/- Sd/- [ Dr. BRR Kumar] [ Shri Sonjoy Sarma ] Vice President Judicial Member राजकोट/Rajkot िदनांक/ Date: 03/08/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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