M/S. DEVELOPMENT EDUCATION & WELFARE TRUST,JALPAIGURI vs. I.T.O., WARD - 2(3), ALIPURDUAR

ITA 2367/KOL/2026Status: DisposedITAT Kolkata07 October 2026AY 2020-202116 pages
AI SummaryAllowed

What were the facts?

The assessee, M/s Development Education & Welfare Trust, is a public charitable trust registered under Section 12A of the Income Tax Act. For Assessment Years 2019-20 and 2020-21, the trust filed its returns of income declaring Nil income after claiming exemption under Sections 11 and 12. The due date for filing the audit report in Form 10B and the return of income was October 31st, 2019. The assessee filed the return of income on November 23rd, 2020, and the audit report in Form 10B on January 5th, 2021. The Assessing Officer (AO) / CPC rejected the exemption claim under Section 11 in the intimation under Section 143(1) due to the delayed filing of Form 10B. The Commissioner of Income-tax (Appeals) [CIT(A)] confirmed this disallowance, holding that the delayed filing of the Income Tax Return (ITR) within the due date was a mandatory condition for claiming exemption under Sections 11 and 12.

What did the Tribunal hold?

The Tribunal held that the return of income filed on November 23rd, 2020, is a valid return within the meaning of Section 139 of the Act, as it was filed within the time allowed under Section 139(4) of the Act. The Tribunal noted that the Ld. CIT(A) had accepted the delay in filing the audit report as a procedural mistake but upheld the disallowance based on the delayed filing of the ITR. Citing the co-ordinate bench decision in DCIT Vs Bishnupur Public Education Institute and other precedents, the Tribunal found merit in the assessee's contention that a return filed under Section 139(4) is valid for claiming exemption. The Tribunal also referred to the Gujarat High Court's decision in Sarvodaya Charitable Trust v. ITO(Exemption), which held that the filing of an audit report is directory and substantial compliance would suffice. The Tribunal concluded that since the assessee complied with the conditions under Section 12A(1)(b) and (ba), and there was no dispute regarding the charitable activities, the benefit of Sections 11 and 12 should be granted. The order of the Ld. CIT(A) was set aside, and the AO was directed to allow the exemption under Section 11. The appeal was allowed.

What were the issues?

1. Whether the claim of exemption under Sections 11 and 12 of the Income Tax Act, 1961, can be denied solely on the ground that the return of income was filed beyond the due date prescribed under Section 139(1) of the Act, but within the time allowed under Section 139(4) of the Act. Assessee's Contention: The assessee argued that a return filed within the time allowed under Section 139(4) is a valid return under Section 139 of the Act, and therefore, the exemption under Section 11 should not be denied on technical grounds, especially when the trust's charitable activities are not in dispute. The assessee relied on decisions of co-ordinate benches and various High Courts, including the Gujarat High Court in the case of Sarvodaya Charitable Trust v. ITO(Exemption) and a co-ordinate bench decision in DCIT Vs Bishnupur Public Education Institute. Revenue's Contention: The revenue, through the Ld. CIT(A), contended that the filing of the ITR within the prescribed due date (Section 139(1)) is a mandatory condition for claiming exemption under Sections 11 and 12 of the Act. The delay in filing the audit report was considered a procedural mistake, but the delay in filing the ITR was deemed fatal to the exemption claim.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 12A,Section 139,Section 139(1),Section 139(4),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM

For Appellant: Shri S.M. Surana
For Respondent: Shri Kshitij. DR
Hearing: 03.09.2026Pronounced: 07.10.2026

Per Rajesh Kumar, AM:

These are appeals preferred by the assessee against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.05.2026, and 30.05.2026 for the AY 2019-20 and 2020-21 respectively.

2.

The only issue raised by the assessee is against the order of Ld. CIT (A) confirming the rejection/disallowance of claim of exemption u/s 11 and 12 of the Act on the ground that the return was filed beyond due date, whereas the Ld. AO/ CPC in ITA Nos. 2366 &2367/KOL/2026 M/s Development Education & Welfare Trust; AYs. 2019-20 &

The order continues below.

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