SHREE MAHAPRABHUJI BETHAK,JAMNAGAR vs. THE ITO EXEMPTION WARD (2), RAJKOT, RAJKOT

आदेश / ORDER

Per, Dr. Arjun Lal Saini, AM:

Captioned appeal filed by the assessee, pertaining to Assessment Year 2016-17, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Commissioner of Income Tax, (Appeals), ADDL/JCIT(A), Faridabad (in short ‘Ld. CIT(A)’), dated 29/11/2025, which in turn arise out of an order passed by the CPC-AO, Bangalore (hereinafter referred to as “AO”), dated 29/01/2018.

DATE EVENT 17-10-2016 Due date of filing return of income u/s 139(1) 31/03/2017 Return of income filed in Form ITR-7 declaring total income of Rs. 1,61,330/-and claiming Rs. 11,00,000/- u/s 11(2) of the Act. 31/03/2017 Original Form 10 filed for accumulation of Rs. 11,00,000/- u/s 11(2) of the Act 31/03/2017 Original Form 10B-Audit report under section 12A(b) of the Act filed 24/08/2017 Intimation u/s 143(1) of the Act received by Assessee for not allowing claim of accumulation of Rs. 11,00,000/- for filing Form 10 beyond due date as specified u/s 139(1) of the Act.

28/10/2017 Rectification application u/s 154 filed by the Assessee against intimation u/s 143(1) 29/01/2018 Order u/s 154 of the Act passed by Ld. DDIT, CPC by not allowing claim of accumulation of Rs. 11,00,000/- for filing Form 10 beyond due date as specified u/s 139(1) of the Act. 31/03/2018 Due date of filing return of income u/s 139(4) 29/11/2025 CIT(A) order dismissing the appeal of the Assessee filed in response to order u/s 154 of the Act dated 29-01-2018 28/01/2026 Second appeal filed before the Rajkot Tribunal against the order of CIT(A) [present appeal]

“4. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the AO- CPC. The ld CIT(A) observed that since the assessee has not at all filed any Form 10B, therefore, CPC-AO had to proceed as per the provisions of the Act. The ld CIT(A) also relied on the judgement of Hon'ble Bombay High Court in the case of Commissioner of Income- tax v. Shivanand Electronics 209 ITR 63 to emphasis the point as follows: “When the Legislature casts a duty on the assessee claiming certain benefit, to comply with requirements which are associated with such benefit, the assessee cannot get the benefit without doing his part of the duty. He cannot be allowed to say that it was for the ITO to ask him to do so If the assessee does not do his part of the statutory duty, the ITO may proceed to decide the allowability or otherwise of the relief on the basis of the facts and material available before him.” Therefore, the ld CIT(A) noticed that intimation issued u/s 143(1) by the CPC- AO, does not warrant any interference on facts and in law, and this way, the ld CIT(A) dismissed the appeal of the assessee. 5. Aggrieved by the order of Ld. CIT(A), the assessee, is in further appeal before us. 6. Shri D. M. Rindani, Learned Counsel for the assessee, submitted before us, a chart showing relevant dates for filing return of income and date of audit report in Form No.10B, which is reproduced below: Event Date Due date of filing return of income u/s 139((1) 17-10-2016 Audit report under the Bombay Public Trusts Act, 1950 27-02-2017 obtained by the Assessee Return of income filed by the Assessee for the year within 30-03-2018 139(4) Due date of filing return of income u/s 139(4) 31-03-2018 Audit report in Form 10B filed online by its Chartered 05-08-2024 Accountant The Learned Counsel for the assessee submitted that assessee could not filed the Form No.10B, during the assessment proceedings, but it was filed during the appellate proceedings. The CPC, Bangalore has disallowed the amount applied for charitable or religious purpose to the tune of Rs.50,52,590/- which is given in Column No.11 of intimation u/s 143(1) of the Act and computed the income of the assessee to the tune of Rs.46,29,020/-.The Ld. Counsel stated that now form No. 10B has been filed by the assessee, therefore, this matter may be remitted back to the file of the assessing officer to examine the Form No.10B (Audit Report) and adjudicate the issue in accordance with law. 7. On the other hand, the Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue submitted that assessee has failed to submit the sufficient cause for non-furnishing the Form 10B within the time limit prescribed in the Act, therefore,Form No.10B should not be entertained at this stage, and appeal of the assessee may be dismissed. 8. We note that assessee has filed Form No.10B (Audit Report) during the appellate proceedings and therefore we find that this Form No.10B was not available before the assessing officer for his examination. In order to claim exemption u/s 11 of the Act, the assesseemay file audit report in Form No.10B, even at a later stage either before assessing officer, or before appellate authority, by showing a sufficient cause. Our above view is fortified by the judgement of Hon’ble jurisdictional High Court of Gujarat in the case of CIT vs. Xavier Kelavani Mandal (P.) Ltd., (2014) 41 taxmann.com 184 (Gujarat), where in it was held as follows: “4. The question whether it is permissible to the assessee to produce the audit report at the appellate stage, has already been answered by this court in CIT v. Gujarat Oil & Allied Industries Ltd. [1993] 201 ITR 325 (Guj.), wherein it is held that the provision regarding furnishing of audit report along with the return has to be treated as a procedural provision. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income, but produced before completion of the assessment. The Punjab and Haryana High Court in CIT v. Shahzadanand Charity Trust [1997] 228 ITR 292/[1998] 96 Taxman 494 has reiterated the same principle holding that the benefit of exemption should not be denied merely on account of delay in furnishing the same, and it is permissible for the assessee to produce the audit report at a later stage either before the Income Tax Officer or before the appellate authority by showing a sufficient cause. This decision of Punjab & Haryana High Court has been relied on by the Tribunal.” 9. We note that Co-ordinate Bench of ITAT, Ahmedabad in the case of Shree Charitable Trust vs. ITO, (2004) 158 taxmann.com 159, held that where assessee-trust filed Audit Report in Form 10B belatedly and assessing officer denied exemption u/s 11 of the Act, on ground that Form 10B was not filed along with return of income, since Audit Report was not considered and verified by assessing officer, and the impugned order was to be set aside and AO was to be directed to verify Form 10B and then allow claim of exemption u/s 11 in accordance with law. Therefore, in the assessee`s case under consideration, before us, Audit Report in Form 10B, though filed belatedly by the assessee, the same was not considered and verified by the Assessing Officer u/s. 143(1) of the Act. We also find that there is no regular assessment order passed u/s. 143(3) of the Act in the assessee`s case, therefore we hereby direct the Jurisdictional Assessing Officer to verify the Form No. 10B and then allow the claim of exemption u/s. 11 of the Act in accordance with law.”

Order is pronounced in the open court on 15/05/2026.

Sd/- (Dr. Arjun Lal Saini) लेखा सद�/Accountant Member राजकोट/Rajkot िदनांक/ Date: 15/05/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, RAJKOT 6. Guard File By order //True Copy// Assistant Registrar/Sr. PS/PS ITAT, Rajkot

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