DEENABANDHU TRUST,KOLKATA vs. ITO, WARD 1(2),, KOLKATA

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ITA 3190/KOL/2025Status: DisposedITAT Kolkata22 June 2026AY 2022-20235 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the filing of Form 10B is a procedural and directory requirement, not mandatory. Therefore, a delay of 30 days in filing the audit report should be condoned.

What were the facts?

The assessee, a charitable trust, claimed exemption under Section 11. The exemption was denied because the audit report in Form 10B was filed 30 days late. The assessee argued that the late filing was a procedural lapse and should not lead to denial of exemption.

What were the issues?

Whether the delay in filing the audit report in Form 10B warrants denial of exemption under Section 11, and if the filing of Form 10B is a mandatory or directory requirement.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Duvvuru RL Reddy, Vice-(KZ)

The present appeal is directed at the instance of assessee against the order of Id. Additional/Joint Commissioner of Income Tax (Appeals)-2, Pune dated 15.10.2025 passed for Assessment Year 2022-2023.

ITA No. 3190/KOL/2025 (A.Y. 2022-2023) Deenabandhu Trust 2. Brief facts of the case are that the assessee is a Charitable Trust, engaged in providing free education and skill development to underprivileged, backward, Tribal students in West Bengal and Odisha. The assessee-Trust had filed its original return of income in ITR 7 for AY 2022-23 on 07.11.2022 declaring total income at NIL. The return was processed by the CPC under section 143(1) of the Act disallowing deduction of Rs.27,36,015/- claimed under section 11 of the Act. Being aggrieved, the assessee-Trust has filed the rectification request under section 154 before CPC claiming exemption under section 11 of the Act for the delay in filing the audited report in Form No. 10B along with the return of income and the same was rejected by the ld. Assessing Officer.

3.

Being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals), wherein the appeal of the assessee was dismissed by the ld. Addl./JCIT(Appeals) by holding that as the filing of Form 10B within the prescribed time is a statutory requirement under the Act and the same was not complied with resulting delay of 30 days in filing Form No. 10B, hence the assessee is not entitled to claim exemption under section 11 of the Act.

4.

Being aggrieved with the order of ld. Addl./JCIT(Appeals), the assessee preferred an appeal before the Tribunal.

5.

At the time of hearing before me, it was the submission of the ld. Counsel for the assessee that the ld. Addl./CIT(Appeals) erred in rejecting the exemption claimed under section 11 of the Act merely for the reason of delay of 30 days in filing audit report. The

ITA No. 3190/KOL/2025 (A.Y. 2022-2023) Deenabandhu Trust ld. Counsel for the assessee further submits that the ld. Addl./JCIT(Appeals) erred in upholding the denial of exemption under section 11 to the assessee-Trust solely on the ground that the audit report in Form 10B was filed late ignoring that filing of Form 10B is procedural and late filing should not warrant denial of exemption under section 11 of the Income Tax Act, 1961 and ld. Addl./JCIT(Appeals) failed to appreciate that the assessee-Trust filed the form 10B before completion of assessment and the conditions under section 12A(1)(b) were substantially complied with and that report was available with the ld. Assessing Officer while passing intimation under section 143(1) of the Act. Ld. Counsel also pleaded that filing of Form 10B is not mandatory rather it is director in nature. The ld. Counsel drew attention of the Bench regarding several order of ITAT and Hon’ble High Court. Ld. Counsel prayed before the Bench to set aside the order passed by the ld. Addl./JCIT(Appeals).

6.

On the other hand, Ld. Departmental Representative supported the order of ld. Addl./JCIT(Appeals) and pleaded before the Bench to confirm the order of ld. Addl./JCIT(Appeals).

7.

I have heard both the sides and perused the material available on record. I find that the assessee is a Trust and filed its return of income along with Form No. 10B. The claim of exemption has been rejected on the ground of delayed filing of Form No. 10B, which, as per the annual mandate provision, was required to be filed one month before the due date of filing the return of income, though it was filed on 07.11.2022, whereas as per the applicable

ITA No. 3190/KOL/2025 (A.Y. 2022-2023) Deenabandhu Trust provisions, the same was required to be filed on or before 07.10.2022, hence there was a delay of 30 days in furnishing the report in Form No. 10B. The assessee-Trust had sought condonation of delay before the ld. CIT(Exemption), Kolkata, which was rejected vide order dated 24.08.2023. The ld. Counsel submitted that he was unaware of the provisions requiring of filing report in Form No. 10B one month before the due date of filing the same. I find that the assessee had not been granted the exemption under section 11 as there was delay in filing the audit report under section 10B of the Act, but the same was available at the time of processing of the return. In this respect, Hon’ble Jurisdictional High Court in the case of CIT(Exemption) -vs.- Indian Sugar Mills Association in ITAT/270/2023 in IA No. GA-1/2023, GA No. 2/2023 order dated 10th January, 2024 have held that filing of the auditor’s report along with the return of income has to be treated as a procedural requirement and, therefore, directory in nature and not mandatory. Hence, after examining the facts and circumstances of the case, delay of 30 days in filing Form 10B is hereby condoned. I deem it appropriate to set aside the order of ld. Addl./JCIT(Appeals) and remit the matter back to the file of ld. Assessing Officer for considering the claim of the assessee afresh as the audit report was available at the time of processing of the return, therefore, the claim under section 11 of the Act could not be denied. The ld. Assessing Officer is directed to allow the claim of exemption under section 11 of the Act as per law after considering the audit report filed on Form No. 10B. Thus, the grounds raised by the assessee are allowed for statistical purposes.

ITA No. 3190/KOL/2025 (A.Y. 2022-2023) Deenabandhu Trust 8. In the result, appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open Court on 22/06/2026.

Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 22nd day of June, 2026

Copies to :(1) Deenabandhu Trust, CF/95, Salt Lake City, Sector-1, Kolkata-700064 (2) Income Tax Officer, Ward-1(2), Kolkata, 10B, Middleton Road, Kolkata-700071 (3) Addl./JCIT(A)-2, Pune; (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order

Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha

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