KURUKSHETRA UNIVERSITY,HARYANA vs. DCIT(E)(C-2), CHANDIGARH, CHANDIGARH

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “ए” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमारअ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM &SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 72 /Chd/ 2026 िनधा�रण वष� / Assessment Year : 2020-21 Kurukshetra University बनाम The DCIT(E) Kurukshetra Haryana-136119 C-2, Chandigarh �ायीलेखासं./PAN NO: AAAJK1297P अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Parikshit Aggarwal, C.A राज� की ओर से/ Revenue by : Smt. Jaishree Sharma, CIT, DR (Virtual) सुनवाई की तारीख/Date of Hearing : 24/06/2026 उदघोषणा की तारीख/Date of Pronouncement : 15/07/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A), ADDL/JCIT(A)-2, Chennai dt. 12/12/2025 for the Assessment Year 2020-21.

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. Briefly, the facts of the case are that the assessee is a State Government- controlled University established for imparting higher education and is an educational institution existing solely for educational purposes. It has been enjoying exemption under section 10(23C)(vi), which had been granted by the competent authority and consistently allowed in the preceding assessment years. For the year under consideration, the assessee filed its return of income declaring Nil income after claiming exemption under section 10(23C)(vi). The audit report in Form No. 10BB was filed electronically on 12.02.2021. However, while processing the return under section 143(1), CPC denied the exemption on the ground that Form No. 10BB had allegedly been filed 28 days beyond the prescribed due date. Consequently, the entire assessee's gross receipts were brought to tax, and a substantial demand was raised. The assessee's rectification applications under section 154 were also rejected. Thereafter, the Ld. CIT(A) upheld the action of CPC by holding that timely filing of Form No. 10BB was a mandatory condition and that neither the Assessing Officer nor the appellate authority possessed any power to condone the delay.

date. It was further submitted that, even otherwise, the delayed filing of Form No. 10BB is merely a procedural lapse and section 10(23C)(vi) nowhere provides that the exemption would automatically stand forfeited for such delay. The denial of exemption by bringing the entire gross receipts to tax is wholly disproportionate and contrary to the statutory scheme.

8.1 The undisputed factual position is that the assessee is an educational institution approved under section 10(23C)(vi). It is also not in dispute that the audit report in Form No. 10BB was furnished before filing of the return of income and that the exemption claimed by the assessee had consistently been accepted in the preceding years.

8.2 The controversy before us is not regarding the eligibility of the assessee for exemption under section 10(23C)(vi), but only regarding the alleged delay of 28 days in furnishing Form No. 10BB.

8.3 On a careful consideration of the statutory scheme prevailing during the assessment year under consideration, we find considerable merit in the contention of the assessee that institutions governed by section 139(4C) were not subjected to any specific statutory due date for furnishing the return of income. Consequently, the expression "specified date" occurring in the proviso to section 10(23C), read with section 44AB, created an apparent legislative vacuum in so far as educational institutions governed by section 139(4C) were concerned. The Legislature itself subsequently stepped in and removed this ambiguity by introducing amendments prescribing the due date with reference to section 139(4C).

8.4 In our considered opinion, the subsequent amendment cannot be pressed into service for construing the legal position as it existed during the year under consideration. It is a settled canon of interpretation that a statutory obligation cannot be imposed retrospectively unless the Legislature has expressly so provided. Equally well settled is the principle that the law does not compel a person to perform an impossibility (lex non cogit ad impossibilia). Where the statute itself did not prescribe a definite time limit applicable to the assessee, the assessee cannot be faulted for not adhering to a timeline which was itself absent from the statute.

8.5 In such circumstances, the only reasonable interpretation is that the audit report should be furnished within a reasonable period. What constitutes a reasonable period has to be judged on the facts of each case. In the present case, the audit report was filed merely 28 days after the alleged due date and, significantly, much before the processing of the return under section 143(1). More importantly, Form No.10BB had admittedly been furnished much before the processing of the return under section 143(1). Thus, when the return came to be processed, the prescribed audit report was already available on the record of the Department. No prejudice whatsoever has been demonstrated to have been caused to the Revenue on account of such delay.

8.6 We further find merit in the contention of the assessee that the requirement regarding furnishing of the audit report is essentially procedural. The consistent judicial view has been that, where the audit report is available before the assessment is completed or the claim for exemption is adjudicated, a mere procedural delay cannot defeat a substantive statutory benefit. The Hon'ble Gujarat High Court in Santodaya Charitable Trust v. ITO(E), the Hon'ble Bombay High Court in Al Jamia Mohammediyah Education Society v. CIT(E), People's Mobile Hospitals v. CIT(E) and Sau Duttarkabai Tai Karwa Charitable Public Trust v. CIT(E), the Hon'ble Orissa High Court in Action Research for Health and Socio Economic Development v. CPC, as also various Benches of the Tribunal, have consistently held that procedural requirements relating to filing of prescribed audit reports or statutory forms are directory in nature and should not be permitted to defeat substantive rights where the prescribed reports were ultimately furnished and no prejudice is caused to the Revenue.

8.7 Particularly, the Hon'ble Bombay High Court in People's Mobile Hospitals v. CIT(E), while following the judgment of the Hon'ble Supreme Court in CIT v. Nagpur Hotel Owners' Association, observed that a justice-oriented and pragmatic approach should prevail over a hyper-technical approach while considering procedural delays and that statutory forms filed before completion of the assessment substantially satisfy the legislative intent. The Court further observed that procedural compliance should not be elevated to such a level as to defeat an otherwise lawful claim for exemption. Likewise, the Hon'ble Bombay High Court in Sau Duttarkabai Tai Karwa Charitable Public Trust held that where there is no mala fide intention, no undue advantage is gained by the assessee and the delay is bona fide, denial of substantive statutory benefit would be wholly unjustified.

8.8 Applying the aforesaid settled principles to the facts before us, we are of the considered opinion that the lower authorities adopted an unduly technical approach in denying exemption under section 10(23C)(vi). The assessee had admittedly complied with all the substantive conditions for claiming exemption. The audit report was duly obtained and furnished before the return was processed. The alleged delay was only of 28 days during the Covid period and did not result in any prejudice to the Revenue. In these circumstances, such a minor procedural lapse could not have been made the sole basis for denying the substantive exemption

available to the assessee. We, therefore, hold that the action of the CPC as affirmed by the learned CIT(A) is unsustainable in law and deserves to be set aside. Accordingly, the Assessing Officer is directed to grant the exemption claimed under section 10(23C)(vi), and the appeal of the assessee is allowed.

Order pronounced on 15/07/2026

Sd/- Sd/- मनोज कुमारअ�वाल लिलत कुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखासद�/ ACCOUNTANT MEMBER �ाियक सद�/JUDICIAL MEMBER AG आदेशकी�ितिलिपअ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकरआयु�/ CIT 4. आयकरआयु� (अपील)/ The CIT(A) 5. िवभागीय�ितिनिध, आयकरअपीलीयआिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH