M.N. CHICKKANNA CHETTIAR TRUST,TIRUPPUR vs. ACIT, EXEMPTIONS, COIMBATORE

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of Addl./JCIT(A)-9, Mumbai dated 17.10.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2021-22.

- 2 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust 2. The solitary issue that is argued by the Ld.AR is that the FAA has erred in confirming the intimation issued u/s.143(1) of the Act, wherein the claim of exemption u/s.11 of the Act was denied solely for the reason that Form 10B was filed belatedly by one day.

- 3 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust 4. Aggrieved by the intimation issued, the assessee filed appeal before the FAA with a delay of 895 days. The FAA condoned the delay of 895 days. The FAA after considering the submissions and taking note of the fact that CIT(E) had rejected the assessee’s petition for condonation of delay upheld the denial of exemption u/s.11 of the Act. However, on the alternate plea, the FAA directed the AO to compute the tax on the net income. Accordingly, the appeal filed by the assessee was partly-allowed.

- 4 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust 21 in ITA No.1568/CHNY/2025, dated 15.10.2025. On identical facts, the Tribunal held that the delay of 19 days in filing the audit report in Form No.10B is merely a procedural and directory requirement and cannot be a ground to deny exemption under section 11 of the Act. After considering the rival submissions and various judicial precedents, the Tribunal categorically held that belated filing of Form No.10B does not disentitle the assessee from claiming exemption under section 11 of the Act, provided the substantive conditions prescribed under the Act are duly satisfied. The relevant submissions of the parties and the findings of the Tribunal in the said order are as follows:- 6. At the outset, it was the vehemently contended by the Ld.AR that the assessee is rightly eligible to claim exemption u/s.11 for the following reasons: a) Provision regarding furnishing of audit report along with the return of income has been held in plethora of cases to be a procedural provision. It has been held that furnishing of audit report is directory and not mandatory in nature and its substantial compliance would suffice. b) In the instant case, the due date for filing the audit report was 15.01.2021 and the same has been filed on 03.02.2021 with a delay of 19 days. However, the exemption u/s.11 of the Act has been denied by processing the return of income by the CPC, Bengaluru on 30.11.2021. Therefore it is evident that the audit report was actually filed well before processing the return of income by the CPC, Bengaluru. 7. As regards the contention raised by the Ld.AR in respect of filing of audit report being directory and not mandatory in nature, our attention was drawn to the decision of the Hon’ble Gujarat High Court in the case of CIT(E) v Shri Laxmanarayan Dev Shrishan Seva Khendra 2024 (10)

- 5 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust TMI 99 wherein the Hon’ble High Court after considering the decision of the Apex Court in WiproLimited (supra) held as follows: “5. Reliance placed by the learned Senior Standing Counsel Ms.Maithili Mehta for the assessee on the decision of the Hon’ble Supreme Court in case of The Principal Commissioner of Income Tax-III and Others versus M/s. Wipro Limited in Civil Appeal No.1499 of 2022 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. 6. Considering the language of the provision of Section 10B (8) of the Act, the Hon’ble Supreme Court held that it was mandatory on part of the assessee to file declaration before the due date of filing of return under Sub-section (1) of Section 139 of the Act, whereas, in the facts of the said case the assessee filed such undertaking along with the revised return under Sub-section (5) of Section 139 of the Act and in such facts, the Hon’ble Supreme Court held that the twin conditions prescribed under Section 10B (8) of the Act was mandatory to be fulfilled and it cannot be said that though the declaration is mandatory, the filing of such declaration within the due date of filing of return under Sub-section (1) of Section 139 of the Act would be directory. 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 the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) in Special Civil Application No. 6097 of 2020 decided on 09th December, 2020 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.

- 6 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust 8. In such circumstances, we are of the opinion that the Tribunal has not committed any error by not following the decision in case of M/s.Wipro Limited (supra) as referred to and relied upon by learned advocate for the assessee-Revenue, and has rightly followed the decision of this Court in case of Social Security Scheme of GICEA (supra). 9. In view of the foregoing reasons, we are of the opinion that no question of law much less any substantial question of law arises from the impugned order of the Tribunal. The Appeal is accordingly dismissed.”

- 7 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust the return of income u/s.139(1). On consideration of the plethora of cases cited before us, the moot principle coming out of all the said decisions is that the filing of audit report in Form 10B is only directory and not mandatory in nature and thus we are of the considered view that denial of exemption u/s.11 merely on pretext of a delay that has occurred in filing of audit report in Form 10B which is only a procedural irregularity cannot become an impediment in law in claiming the exemption. 13. In addition to the cases cited by the Ld.AR, we note that there are other decisions in which it has been clearly held that filing of Form 10B is only directory and not mandatory in nature, few of which have been stated as under: • Association of Indian Panelboard Manufacturer v DCIT [2023] 157 taxmann.com 550 (Guj) • CIT v Xavier Kelavani Mandal (P.) Ltd. [2014] 41 taxmann.com 184 (Guj) • M/s. Alternative India for Development v ITO in ITA No.2114 / Chny / 2024 – Chennai ITAT • Puran Chand Arora Charitable Trust v ITO [2025] 172 taxmann.com 161 (Del. Trib)

- 8 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust 16. In view of the above, we are of the opinion that filing of Form 10B is only a procedural-cum-directory requirement and therefore, once the conditions for claiming exemption u/s.11 has been substantively fulfilled, the bar of limitation on furnishing of such audit report would not result in grave consequence of denial of exemption u/s.11 of the Act and thus we direct the AO to grant exemption as claimed by the assessee u/s.11 of the Act.

Order pronounced in the open court on 3rd August, 2026 at Chennai.

Sd/- Sd/- (जॉज� जॉज� के) (प�मावती एस) (PADMAVATHY S) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 3rd August, 2026 RSR, Sr.PS

- 9 - ITA No.4065/CHNY/2025 M.N.Chickkanna Chettiar Trust आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Coimbatore 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order REKHA Digitally signed by REKHA SENTHIL RAJ SENTHIL Date: 2026.08.05 RAJ 09:54:23 +05'30'