DINKARRAO K SHINDE SMARAK TRUST,GADHINGLAJ vs. DEPUTY COMMISSIONER OF INCOME TAX EXEMPTION CIRCLE PUNE, AAYKAR BHAVAN

INCOME TAX APPELLATE TRIBUNAL, PUNE “A” BENCH BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER

ITA 1594/PUN/2026 निर्धारणवर्ा/Asst. Year:2020-21) Permanent Account Number: AABTD1126H Dinkarrao K Shinde Smarak Trust, DCIT (Exemption), Pune Church Road, Aayakar Bhavan, 12, Gandhinagar, Sadhu, Vaswani Road, Vs. Pune-411001, Gadhinglaj, Maharashtra. Kolhapur-416502, Maharashtra (प्रत्यर्थीRespondent) (अपीलधर्थीAppellant)

निर्धारितीद्वधिध/Assessee represented by: Shri Pramod S Shingte.AR िधजस्‍वद्वधिध/Revenue represented by: Shri Rajesh HaladkarSr.DR

सुिवधईकीतधिीख/Date of hearing: 13-10-2026 घोषणधकीतधिीख/Date of pronouncement: 15-10-2026 आदेश / ORDER PER PAVAN KUMAR GADALE, JM: The assessee has filed the appeal against the order of the AddL/JCIT(A)-3, Bangalore passed under section 250 of the Income Tax Act..The assessee has raised the grounds of appeal challenging the order of the JCIT (A) sustaining the denial of claim of exemption u/sec. 11 of the Act for delay in filing Form .No.10B made by the Assessing Officer..

“3. At the outset itself, it was stated that the solitary issue in the present appeal pertains to denial of exemption claimed by the assessee u/s. 11/12 of the Act, for the reason that Form 10BB was filed delayed by the assessee. It was pointed out, that the impugned assessment year was AY 2023-24 ,the due date of furnishing return of income for the impugned year was 30-11-23and the assessee was required to file Form 10BB one month prior to the said due date, however the said form was filed delayed on31.03.2024. The assessee, it was pointed out, being a charitable trust had claimed its entire income exempt in terms of the provisions of Section 11 of the Act. However, due to delayed filing of Form 10BB the Centralized Processing Centre (CPC) denied assessee claim of exemption while processing its return u/s 143(1)(a) of the Act and determined income at Rs.18,49,950/-. The same , it was pointed out, was confirmed by the ld. CIT(A) stating that neither the AO nor the first appellate authority had been granted powers by the Act to condone the delay in filing Form 10BB, which power it was stated vested only with the jurisdictional CCIT/PCIT.

4.Learned counsel for the assessee contended that the requisite Form 10BB had been filed by the assessee before its return of income was processed by the CPC u/s. 143 (1)(a) of the Act. He pointed out that while the assessee’s income was processed on 19.12.2024, Form 10BB had been filed much earlier on 31.03.2024. He contended that Courts in a plethora of decision have held that the requirement of filing Form 10BB was only a procedural requirement and not a substantive condition for claiming exemption u/s. 11 of the Act and if filed during pendency of assessment proceedings it would suffice for grant of exemption. He therefore pleaded that the order of the Ld.CIT(A)being incorrect in law be set aside and the assessee be granted exemption u/s 11/12 of the Act. Ld. DR, on the other hand relied on the order of the ld. CIT(A).

As rightly pointed out by the Ld. Counsel for the assessee Hon'ble High Courts and the coordinate Benches of the ITAT have consistently held the requirement of filing Form 10BB to be a mere procedural requirement and not a mandatory condition therefore holding the denial of deduction for the said reason to be not sustainable in law. It has been held that as long as the requisite form is filed and is made available during assessment proceedings for scrutiny, it is sufficient compliance with the condition of filing Form 10BB and the mere fact of delay in the same would not adversely affect the right of the assessee to claim exemption u/s. 11 of the Act. In this regard, I draw support from the judgment of the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax (Exemption) vs. Laxmanarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.com 548 (Gujarat) [10.09.2024],wherein it was held at paragraph Nos. 7 & 9 of the order as under:- ………………………

“7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. ITO (Exemption) in Application No.6097 of 2020 decided on 09th December, 2020/[2021] 125 taxmann.com 75/278 Taxman 148 (Gujarat) as well as the decision in case of Social 4 Security Scheme of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious. In the facts of the case, when the assessee has already filed the audit report in Form 10B electronically on 27.02.2021 during pendency of appellate proceedings along with copy of audited financial statements, delay in filing the said form is rightly condoned by CIT(A) and the Tribunal. ………………………

“7. DISCUSSION & FINDINGS :-

7.1 In Association of Indian Panel Board Manufacturers v. Dy.CIT [2023] 157 taxmann.com 550 /482 ITR 54 (Gujarat), this Court has categorically held that filing of Form 10B is only a procedural requirement and the failure to file Form 10B along with the return of income cannot be treated as mandatory requirement for the purpose of claiming exemption under Section 11 and 12 of the Act and even if such Form is filed at a later stage, the Assessee will still be entitled to claim exemption. The aforesaid decision in the case of Association of Indian Panel Board (supra) has been followed by this Court in case of CIT (Exemption) v. Anjana Foundation [2024] 168 taxmann.com 462 (Gujarat). Thus, it will be seen that the Petitioner-Assessee could not be denied the exemption merely because Form 10B was not filed within time. In such circumstances, the denial on the part of the Department to condone the delay in complying with the procedural requirement on the part of the Assessee would result in denial of a substantive right of the Assessee to claim an exemption, which would in turn, result in the Assessee having to pay the demanded amount, thereby unjustly enriching the Department.In such view of the matter in our opinion, the Petitioner would have been caused undue hardship which the Department could have alleviated by allowing the Assessee's application under Section 119(2)(b) of the Act, which is rejected only on the technical grounds.

7.2 This Court in several recent decisions, namely in the case of Royal Led Equipments (P.) Ltd. v. Chief Commissioner of Income-tax [2025] 174 taxmann.com 61 (Gujarat)/Special Civil Application No. 14786 of 2024 and in the case of Surat Smart City Development Ltd. v. Principal Commissioner of Income-tax [2024] 169 taxmann.com 222 (Gujarat)/Special Civil Application No. 10397 of 2024 has directed the Department to consider the Assessee's applications under Section 119(2)(b) of the Act to ensure that the purpose for which the said provision remains on the statute book is carried out and the said provision is not rendered illusory or becomes a dead letter.

“ 9. On going through the facts of the instant case, we observe that the adjustments made by CPC have been confirmed by the JCIT(A) on three grounds. Firstly, the assessee had not filed the return of income within the prescribed time limit. Secondly, the assessee had not filed Form 10B within the prescribed time limit. Thirdly, this addition was permissible by way of adjustment under Section 143(1) of the Act. Therefore, on account of the above reasons, the assessee was not eligible for grant of exemption under Sections 11 & 12 of the Act, and hence the corpus donation was liable to be taxed as income in the hands of the assessee. In response, the Counsel for the assessee submitted before us that in the return of income, it was specifically submitted that such amount of Rs. 17,96,000/- received by the assessee was a voluntary donation and not a corpus donation. Secondly, since the income of the assessee, as per the Profit & Loss account, was below the taxable limit, the assessee trust was not under an obligation to file return of income and therefore, also not an obligation to file Form 10B as well. Thirdly, delayed filing of Form 10B is a procedural defect and since the assessee trust had filed the same before Ld. JCIT(A) during the course of appellate proceedings, no disallowance was called for on account of late filing of said Form 10B.

"3. The issue before me pertains to delayed submission of Form no.10B which Id.counsel for the stated to be a technical default. He further submitted that ld.Bench of the ITAT, Ahmedabad rejected similar claim in the case of Association of Indian Panelboard Manufacturer v. DCIT, ITA No. 24 of 2022. However, the said decision of the ITAT was reversed by the Hon'ble Jurisdictional High Court by judgment dated 21.3.2023 reported in [2023] 157 taxmann.com 550 (Gujarat) holding that w.e.f. Astt.Year 2016-17 filing of form though mandatory in nature but procedural in nature, owing amendment made in Finance Act, 2015. In the present case, however, the ld.counsel for the assessee submitted that the same has been filed subsequently, and therefore, the above decision of the Hon'ble Jurisdictional High Court is squarely applicable. The relevant portion of the judgment of the Hon'ble High Court at para 6.1 is held as under:

6.1 The appellant assessee has to be held to be eligible and entitled to exemptions under section 11(1) and 11 (2) of the Act and. the alleged ground of non-filing of audit report alongwith return of income which was at the best procedural omission, could never to an impediment in law in claiming the exemption.

s6. I have gone through the record and the orders of the Revenue authorities. Keeping in view the decision of the Hon'ble jurisdictional High Court in the case of Association ofIndian Panel Board Manufactureres (supra), and the assessee having satisfied the requirement of the law, I set aside the impugned orders of the Revenue authorities, and allow the grounds of appeal."

10B. In the instant case, we observe that the assessee had filed Form No. 10B before Ld. JCIT(A) before conclusion of appellate proceedings. Accordingly, in view of the aforesaid decision of Ahmedabad Tribunal, exemption under Sections 11&12 of the Act cannot be denied to the assessee only on account of late filing of Form No. 10B. Accordingly, in light of the above observations, the appeal of the assessee is allowed.

“9. We observe that admittedly there was a delay on filing Form 10B by the assessee trust. It was on this basis that AO, CPC denied the claim of exemption under Section 11 of the Act. Ld. CIT(A) upheld the denial of exemption under Section 11 of the Act on the ground that despite issuance of multiple notices of hearing, none appeared on behalf of the assessee to present it's case during the course of appellate proceedings. However, we note that it is a well settled law that delay in filing of Form 10B is a procedural default and if other conditions have been met, then mere delay in filing of Form 10B should not disentitle the assessee from claiming exemption under Section 11 of the Act. In the case of Sarvodaya Charitable Trust v. ITO(E) [2021] 125 taxmann.com 75/278 Taxman 148 (Gujarat), the Hon'ble Gujarat High Court held that where assessee, a public charitable trust registered under Section 12A of the Act had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No. 10B. While passing the order the Hon'ble Gujarat High Court made the following observations:

"31. Having given our due consideration to all the relevant aspects of the matter, we are of the view that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, the respondent no. 2 might be justified in denying the exemption under section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 years who substantially satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned.

. 11. Accordingly, in view of the decision of the Hon'ble Gujarat High Court in this issue, as well as various other judicial precedents which have upheld the principle that delay in filing of Form 10B being a procedural default should not disentitle the assessee / applicant trust the denial of grant of exemption under Section 11 of the Act, we are of the considered view that in the assessee's set of facts, claim of exemption under Section 11 of the Act should not be denied only on account of delay in filing Audit Report in Form 10B, within the stipulated time. However, we make it clear that we are not making any observations with regard to the merits of the claim of exemption under Section 11 of the Act, but are only allowing the appeal on the legal principle what once Form 10B has been filed by the assessee and the same is available with the Department before passing of order / intimation under Section 143(1) of the Act, then in view of the decisions of Jurisdictional High Court referred to above, the claim of exemption under Section 11 of the Act cannot be denied only on account of delay in filing of Form 10B before the due stipulated date.