THE PROPERTY ASSOCIATION OF BAPTIST CHURCHES PIRVATE LIMITED,CHENNAI vs. ITO (EXEMPTION), WARD 3, CHENNAI, CHENNAI

The Assessee raised the following grounds of appeal : “1. The CIT(A) erred in law and on facts in passing a mechanical, cryptic and non-speaking order, dismissing the appeal without adjudicating the detailed written submissions filed by the Appellant.

Briefly, the facts of the case are that the appellant is a Company incorporated under the provisions of section 25 of the Companies Act, 1956. The appellant was formed with an object of managing and holding the properties in trust held by missionaries. The Return of Income for the Assessment Year 20221-22 was filed on 21.02.2022. The said Return of Income was processed by CPC u/s.143(1) of the Act by intimation dated 12.08.2022 denying the exemption claiming u/s.11 of the Act for the reason that the appellant had failed to e-File Audit Report atleast one month prior to the due date for furnishing the Return of Income u/s.139(1) of the Act. On receipt of the intimation, the appellant filed a petition u/s.154 of the Act seeking the rectification of the intimation. But the same came to be dismissed vide order dated 07.03.2023 passed u/s.154 of the Income Tax Act, 1961.

Being aggrieved by the order u/s.154 of the Act, the appellant filed an appeal before the ld.CIT(A), who vide order dated confirmed the action of the Assessing Officer.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. It is contended before us that the requirement of filing the prescribed Audit Report in Form-10B one month prior to the due date above furnishing the return of income u/s.139(1) of the Act is merely a directory in nature. Without prejudice to the above, he submits that the Form-10B was available with CPC at the time of furnishing Return of Income and no prejudice is caused to the Department on account of belated filing of Audit Report.

On the other hand, Learned Sr.DR submits that filing of prescribed Audit Report one month before the due date for filing Return of Income is a condition precedent for availing exemption u/s.11 of the Act. Therefore, he submits that the order of the ld.CIT(A) is a reasoned one and requires no interference by this Tribunal.

We heard the rival submissions and perused the material available on record. The issue that arises for our consideration is whether the CPC was justified in denying the exemption u/s.11 of the Act while processing the Return of Income u/s.143(1) of the Act solely for the reason that the prescribed report in Form 10B was filed belatedly. Admittedly, the appellant has filed prescribed Audit Report in Form 10B along with the filing of Return of Income . However, the Return of Income was filed on 21.02.2022. The return of income was processed by CPC u/s.143(1) vide intimation dated 12.08.2022 denying exemption u/s.11 solely for the reason that the prescribed Audit Report in Form 10B was not filed along with the Return of Income. Thus, it is clear that the prescribed Audit Report was very much available with the CPC at the time of processing Return of Income and no prejudice caused to the Department on account of belated filing of Audit Report. Therefore, CPC was not justified in denying the exemption u/s.11 of the Act. We are fortified in taking this view by the decision of Hon’ble Gujarat High Court in the case of CIT(Exemptions) Vs. Laxmanarayan Dev Shrishan Seva Khendra (2024) 167 taxmann.com 548 (Guj) wherein, the Hon’ble Gujarat High Court after making a reference to the decision of Hon’ble Supreme Court’s decision in PCIT Vs. Wipro Ltd., held that the exemption u/s.11 of the Act cannot be denied merely on account of belated filing of Form 10B. We therefore direct the AO/CPC to amend the intimation by taking into consideration the Form 10B filed on 21.02.2022.

In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on 11th June, 2026.