SHREE SWAMI GHANSHYAM JIWANDAS WELFARE ASSOCIATION,VALSAD vs. INCOME TAX OFFICER (EXEMPTION), SURAT, SURAT

Brief facts of the case are, the assessee is a Trust running primary and secondary high school in the name of Shree Swaminarayan Vidhyalay. For the Ay 2020-21, the assessee filed its return of income on 31.03.2021 and claimed exemption u/s 11 of the Act. The assessee filed audit report in Form 10B on 31.03.2021, the delay is due to COVID 19 Pandemic. The return was processed u/s 143(1) on 30.11.2021 and denied exemption u/s 11 on the ground that audit report in Form 10B filed belatedly. 3. Aggrieved against the same, assessee filed an appeal before Ld. Addl./JCIT(A), who dismissed the appeal that he has no power to condone the delay in filing Form 10B. 4. Aggrieved against the same, assessee is in appeal before us, raising following grounds of appeal:- Ground 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in denying the exemption under section 11 of Income Tax Act, 1961 on mere ground that Form 10B and income tax return was not filed by the appellant trust within due date Ground 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in denying exemption under section 11 of Income Tax Act, 1961 on account of claim of Revenue expenditure of Rs. 67,34,718 and Capital Expenditure of Rs. 19,61,035 merely on the ground that no audit report in form 10B was uploaded and therefore, appellant was not eligible for claiming exemption under section 11 of Income Tax Act, 1961 Ground 3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in not considering the audit report in form 10B filed by the appellant on 31.03.2021 at the time of filing of return of income Ground 4. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that the he has inherited power to condone the delay in filling form 10B of Income Tax Act, 1961 Ground 5. Without Prejudice to Above, on the facts and circumstances of the case and law, the Ld CIT(A) erred in taxing gross receipts of Rs. 81,72,487/- while denying the exemption u/s 11 of Income Tax Act, 1961 without considering the appellant as an AOP and failed to allow the claim of revenue expenditure of Rs. 67,34,718/- and Depreciation of capital assets

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 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. ………………

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