ALL INDIA HAJ UMRAH TOUR ORGANISERS ASSOCIATION,MUMBAI vs. ITO EXEM. WARD 1(1), MUMBAI, MUMBAI

ITA 6256/MUM/2026Status: DisposedITAT Mumbai08 October 2026AY 2022-202311 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the substantial delay in filing the appeal, finding the explanation of administrative lapse to be a sufficient cause under section 253(5). Regarding the 24-day delay in filing Form 10B, the Tribunal held that it shall not, by itself, prevent the consideration of the assessee's exemption claim on merits, following the approach of a coordinate bench. The Tribunal also addressed the discrepancy in the application of income, stating that the CIT(A) erred in treating it as fatal and the absence of a separate ground as an admission. The Tribunal noted that the working provided by the assessee offered an explanation for the figures, requiring examination of accounts and sources of expenditure, including the treatment of depreciation under section 11(6). The Tribunal set aside the impugned order and restored the exemption claim to the Assessing Officer for limited verification of the reconciliation of application of income. The Assessing Officer was directed to consider Form 10B, financial statements, and working, verify the composition of expenditure, application of income, treatment of depreciation, source and classification of amounts, and current-year application. The exemption shall be allowed to the extent admissible, and the claim shall not be rejected merely on account of the delay in furnishing Form 10B or the premise of admission. Grounds 1 to 8 were allowed for statistical purposes.

What were the facts?

The assessee, All India Haj Umrah Tour Organisers Association, filed its return of income for Assessment Year 2022-23 on 31.10.2022, claiming exemption under Sections 11 and 12 of the Income-tax Act, 1961. Form 10B was furnished 24 days late, on 31.10.2022, instead of the due date of 07.10.2022. The Central Processing Centre (CPC) processed the return under section 143(1) on 17.03.2023, disallowed the exemption, and raised a demand of Rs. 1,09,820/-. The assessee's first appeal to the CIT(A) was dismissed. The present appeal before the ITAT was filed with a delay of approximately 645 days, attributed to an administrative lapse in communicating the CIT(A)'s order. The delay was condoned by the Tribunal.

What were the issues?

1. Whether the Tribunal has the power to condone the delay in filing Form 10B, and if so, whether the delay of 24 days in filing Form 10B for AY 2022-23 should be condoned, thereby allowing the exemption claim under Sections 11 and 12 of the Income-tax Act, 1961. - Assessee's contention: The delay was minor, bona fide, and procedural. The audit report was available before processing under section 143(1). The appellate authority has the power to adjudicate the exemption claim on merits, and the remedy under section 119(2)(b) does not preclude this. Filing of Form 10B within the due date is directory, not mandatory, and substantive exemption should not be denied for procedural lapses. - Revenue's contention: The learned DR did not object to condonation of delay and relied upon the orders of the lower authorities. 2. Whether the discrepancy between the figures in Form 10B and the Income Tax Return regarding the application of income is fatal to the exemption claim, and if the absence of a separate ground before the CIT(A) amounts to admission of the disallowance. - Assessee's contention: The discrepancy arose due to disclosure/classification differences and required proper verification, not outright denial. The assessee had not admitted the disallowance, and the entire exemption claim was under challenge. Grounds 4 and 5 before the ITAT dispute the treatment of the discrepancy and the inference of admission. - Revenue's contention: Not explicitly recorded, but the CIT(A) sustained the disallowance based on this discrepancy and the lack of a separate ground.

Which sections of the Income-tax Act were involved?

Section 11,Section 12,Section 119(2)(b),Section 250,Section 253(5),Section 143(1),Section 11(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI MAKARAND VASANT MAHADEOKAR

Pronounced: 08.10.2026

PER MAKARAND VASANT MAHADEOKAR: This appeal by the assessee is directed against the order dated 27.06.2024 passed by the Addl./JCIT(A)-4, Kolkata [hereinafter referred to as “CIT(A)”] under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], arising from the intimation dated 17.03.2023 issued under section 143(1) for assessment year 2022-23. ITA 6256/MUM/2026 ALL

The order continues below.

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