MAHLA EDUCATION AND CHARITABLE TRUST,SURAT vs. ITO, EXEMPTION WARD, SURAT

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ITA 1347/SRT/2025Status: DisposedITAT Surat06 July 2026AY 2021-224 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the benefit of exemption under Section 11 should not be denied solely for the delayed furnishing of the audit report (Form 10B), especially when it was filed before the assessment was completed. Following jurisdictional High Court precedents, the Tribunal allowed the appeal.

What were the facts?

The assessee, an educational trust, filed its return of income and Form 10AB claiming exemption under Section 11. The return was processed under Section 143(1) denying exemption due to belated filing of Form 10B. The rectification application and subsequent appeal were also rejected.

What were the issues?

Whether denial of exemption under Section 11 is justified solely on account of belated filing of Form 10B. Whether the delay in filing Form 10B can be condoned.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A(1)(b),Section 143(1),Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Shri T.R. Sentil Kumar & Shri Ratnesh Nandan Sahay

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Shri T.R. Sentil Kumar, Judicial Member And Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 1347/SRT/2025 Assessment Year: 2021-22

Mahila Education and ITO, Exemption, Charitable Trust Ward, Surat Table Trust Hamavatchond Vs Sarvar Ahwa Subir Dang Gujarat-394715 PAN: AAGTM1614C (Respondent) (Appellant) Assessee Represented: Shri Rasesh Shah Shah, A.R. Revenue Represented: Ms. Neerja Sharma, Sr. D.R. Date of hearing : 05-05-2026 Date of pronouncement : 06-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the ex parte appellate order dated 24.10.2025 passed by the Additional Commissioner of Income Tax/JCIT (Appeals)-3, Bengaluru (hereinafter referred to as “Ld. Addl/JCIT(A)”), arising out of the rectification order passed u/s. 154 of the Income Tax Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2021-22.

I.T. A No. 1347//SRT/2025 A.Y. 2021-22 Page No 2 Mahila Education and Charitable Trust vs. ITO

2.

Brief facts of the case are, the assessee is a Educational Trust filed its return of income for the AY 2020-21 on 30.03.2022 and filed a Form No.10AB on 16.03.2022 claiming exemption u/s 11 of the Act. The return was processed u/s 143(1) and denied benefit of exemption u/s 11 of the Act, since Form No.10B filed belatedly. The assessee filed a rectification against the intimation which was also rejected and demanded tax thereon. 3. Aggrieved against the same, assessee Trust filed appeal before Ld. Addl./JCIT(A), who accepted that belated filing of Form No.10B, however, he has no authority to condone the delay u/s 119(2)(b) of the Act and thereby dismissed the appeal. 4. Aggrieved against the same, assessee is in appeal before us raising following grounds of appeal:- 1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of the learned Assessing officer (CPC) in making adjustment u/s. 143(1) by disallowing the claim of exemption u/s. 11. 2. On the facts and circumstances of the case, the leamed CIT(A) has erred in confirming the action of Ld. Assessing Officer (Central Processing Centre, Bengaluru) in treating the gross receipts of Rs. 20,85,960/- as total income without allowing deduction of expenses incurred by the assessee and without appreciating the fact that only the real income can be taxed. 3. It is therefore prayed that the exemption claimed u/s. 11 may please be allowed and/or allow deduction of expenses incurred by the assessee. 4. Appellant craves leave to add, alter or delete any ground/(s) either before or in the course of hearing of the appeal.

5.

We have heard rival submissions and perused the materials available on record. This issue of late filing of Form 10B is not more res integra by various decisions of the Jurisdictional High Court as well as Coordinate Bench of this Tribunal. Coordinate Bench of this Tribunal in the case of S.M.K.R Vashi High School Vs. Income-tax Officer

I.T. A No. 1347//SRT/2025 A.Y. 2021-22 Page No 3 Mahila Education and Charitable Trust vs. ITO

Exemption reported in [2023] 157 taxmann.com 702 (Surat-Trib.), considered Jurisdictional High Court judgment and held as follows:- ………………. 16. Hon'ble Gujarat High Court in the case of Gujarat Oil & Allied Industries (supra), held that where an assessee could not file audit report along with return of income but filed it later before completion of assessment before the Assessing Officer, the assessee was entitled to claim deduction. We note that the law in this regard is settled that benefit of exemption under section 11 and 12 should not be denied merely on account of delay in furnishing the audit report, and it would be sufficient compliance, if the audit report is furnished at a later stage either before the assessing officer during the assessment proceedings or before the ld.CIT(A) in the appellate proceedings. Therefore, at the cost of repetition, we state that assessee has filed Form No. 10B on 4-8- 2022 (after filing return of income) but before the assessment/intimation under section 143(1) was made by the Department. The intimation/assessment order was framed under section 143(1) of the Act, on 23-8-2022, hence Form No. 10B was available before the Assessing Officer/CPC, at the time making the assessment/processing the return of income of the assessee. The assessee could not attend the communication due to IT-website technical glitches, however has eventually filed the audit report in Form No 10B on 4-8-2022 and complied with the condition laid in section 12A(1)(b) so as to entitle for a claim of exemption envisaged under sections 11 and 12 of the Act, hence we delete the disallowances made by the Assessing Officer and allow the appeal of the assessee. ………………

6.

Respectfully following the decision of the Jurisdictional High Court, the appeal filed by the assessee is hereby allowed. In the result, the appeal filed by the assessee is allowed. 7.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 06-07-2026.

Sd/- Sd/- (RATNESH NANDAN SAHAY) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat: Dated 06/07/2026

I.T. A No. 1347//SRT/2025 A.Y. 2021-22 Page No 4 Mahila Education and Charitable Trust vs. ITO

Mittali आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत

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