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Facts
The assessee, a charitable trust, filed its audit report in Form 10B on 28.10.2023 and its return of income on 29.10.2023, declaring NIL income. Subsequently, realizing Form 10BB was required, the corrected audit report was filed on 05.01.2024. The CPC processed the return and made an addition of Rs. 4,85,010/- on grounds of delayed audit report filing.
Held
The Tribunal held that the assessee had filed the audit report in Form 10B within the due date and subsequently filed the correct Form 10BB within the extended timeline provided by CBDT Circular No. 2/2024. Therefore, the addition made by the CPC was unwarranted.
Key Issues
Whether the addition made under section 143(1) for delayed filing of audit report in Form 10BB is sustainable, considering the assessee filed Form 10B within the due date and subsequently filed Form 10BB within the extended period as per CBDT circular.
Sections Cited
12A, 139(1), 143(1), 119, 13(10)
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. Addl/JCIT(A)-1 Ludhiana dated 7.3.2025 vide DIN & Order No. ITBA/APL/S/250/2024-25/1074176139(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2023-24.
The assessee has raised the following grounds of appeal:-
Brief facts of the case are that the assessee is a charitable trust registered u/s 12A of the Act. For the impugned assessment year 2023-24, the assessee trust filed its audit report in form no.10B on 28.10.2023 vide e-filing acknowledgement no.460923230281023 and also filed its return of income on 29.10.2023 vide e-filing acknowledgement no.462827891291023 by declaring taxable income at Rs. Nil. Thereafter, the assessee came Ashwini’s Sports Foundation, Bangalore Page 3 of 7 to the aware of the fact that the Form No.10BB is required to be filed/uploaded in the case of the assessee trust as per the amendment made vide Income Tax (3rd amendment) Rules, 2023 instead of Form No.10B as filed on 28.10.2023 by the Chartered Accountant & accepted by the Assessee trust. Thereafter, the Chartered Accountant filed the audit report in correct form no.10BB on 5.1.2024 (placed at page 107-116 of the Paper book) vide e-filing acknowledgement no.890932670050124. Subsequently, the return of income was processed and accordingly intimation u/s 143(1) of the Act was passed on 2.12.2024 by determining the total income at Rs. 4,85,010/-. However on going through the page 22 of the intimation dated 02/12/2024, the reason as mentioned for incorrect claim u/s 143(1)(a)(ii) are as follows: “The total income of the trust claiming exemption u/s 11 exceeds the maximum amount which is not chargeable to tax under the Income Tax Act but less than or equal to Rs.5 Crores. The assessee is required to file audit report in form 10BB atleast one month prior to the due date of furnishing return u/s 139 (1) of the Act. However, the assessee has not e-filed the audit report in form 10BB. Hence, income chargeable to tax will be recomputed as per the provisions of section 13(10) of the Act as applicable amounting to Rs.32,33,425/-.”
Aggrieved by the intimation passed u/s 143(1) of the Act dated 2.12.2024, the assessee has preferred an appeal before the ld. CIT(A)/Addl/JCIT(A).
The ld. Addl/JCIT(A) dismissed the appeal of the assessee by observing that assessee has to file its audit report on or before 31.10.2023 whereas the assessee filed its tax audit report on 5.1.2024 in form no.10BB. Therefore, the assessee filed its audit Ashwini’s Sports Foundation, Bangalore Page 4 of 7 report belatedly after the lapse of the due date (i.e. 31.10.2023). Further, the ld. Addl/JCIT(A) observed that the assessee has not even filed form 10B within the due date and thus filing of form 10BB on 5.1.2024 does not help assessee’s case as per the circular no. 2/2024 dated 5.3.2024 issued by the CBDT. Lastly, the ld. Addl/JCIT(A) has opined that the assessee has to approach the competent authority authorized by the CBDT for condonation of delay in filing form 10BB in order to claim the benefits of section 11 & 12 of the Act.
Aggrieved by the order of ld. Addl/JCIT(A), the assessee has filed the appeal before this Tribunal. The assessee has also filed paper book comprising 119 pages containing therein the audited financial statements, audit report under Form no.10B dated 28.10.2023, copy of income tax return filed on 29.10.2023, copy of audit report in form 10BB filed on 5.1.2024 along with the copy of CBDT circular no.2/2024 dated 5.3.2024. Further, ld. A.R. of the assessee also filed list of important dates and synopsis in support of its case.
Before us, the ld. A.R. of the assessee vehemently submitted that the assessee had filed the Audit report in correct form no.10BB on 5.1.2024 i.e. within the extended deadline prescribed under circular no. 2/2024 dated 5.3.2024 and therefore no adjustment could have been made u/s 143(1) of the Act. Further, ld. A.R. of the assessee vehemently submitted that the ld. Addl./JCIT(A) erred in making a perverse finding that the assessee had not filed form No. 10B within the due date despite being filed on 28.10.2023 and accordingly prayed that the addition made amounting to Rs.4,85,010/- may be deleted.
Ashwini’s Sports Foundation, Bangalore Page 5 of 7 8. The ld. D.R. on the other hand, supported the order of ld. Addl/JCIT(A) and submitted that the case may be remitted back to the AO for the verification of the facts.
We have heard the rival submissions and perused the materials available on record. On going through the intimation passed u/s 143(1) of the Act dated 2.12.2024, we find that the CPC has not treated the application amounting to Rs.4,85,014/- and added the same as the income of the assessee on the ground that the assessee has not e-filed the audit report in form 10BB at least one month prior to the due date of furnishing return u/s 139 (1) of the Act. On going through the paper book, we take a note of the fact that the assessee had in fact filed the audit report in form 10B on 28.10.2023(Placed at Pg 6-50 of PB), whereas, the extended due date for filing the Audit Report for the AY 2023-24 was 31.10.2023. Further, the assessee had also filed its return of income on 29.10.2023 way before the extended due date of filing return of income u/s 139(1) of the Act. Therefore, the observation of ld. Addl/JCIT(A) that assessee had not even filed form 10B within due date is not acceptable. Further, we also take a note of the fact that the assessee when came to aware of the fact that the audit report has to be filed in form No. 10BB instead of form10B in terms of the amended rule 16CC read with 17B of the Income Tax Rules, 1962 immediately filed the audit report in the correct form no.10BB on 5.1.2024 i.e. way before the passing of intimation u/s 143(1) of the Act. Therefore, in our view, while passing intimation u/s 143(1) of the Act, the CPC should have considered the correct form no.10BB filed on 5.1.2024.
9.1 Further, it has come to the attention of the CBDT that in a number of cases trusts/institutions have furnished audit report in Form No.10B, where Form No. 10BB was required to be furnished Ashwini’s Sports Foundation, Bangalore Page 6 of 7 for the Asst. year 2023-24. Similarly, in a number of cases trusts/institutions have furnished audit report in form No. 10BB, where Form No. 10B was required to be furnished for the A.Y. 2023-24. Further the CBDT noted that non furnishing of audit report in the prescribed form would result in denial of exemption in such cases as it is one of the conditions which is required to be satisfied for claim of exemption and accordingly the CBDT in exercise of its power u/s 119 of the Act issued a circular no. 2/2024 dated 5.3.2024 in which the CBDT allowed those trusts/institutions which have furnished audit report on or before 31.10.2023 in form no.10B where form no.10BB was applicable and vice versa, to furnish the audit report under sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Act, in the applicable form no.10B/10BB for the assessment year 2023-24, on or before 31.3.2024. In the present case, the assessee trust has in fact suo motto furnished the correct form no.10BB for the AY 2023-24 well before the issue of CBDT Circular on 5.3.2024. We also take a note of the fact that form no.10B was also in fact filed on 28.10.2023 i.e. well before 31.10.2023. Therefore, in view of the above circular issued by the CBDT in exercise of its power u/s 119 of the Act, we held that the Audit Report filed in Form 10BB on 05/01/2024 is within the due date.
We, accordingly set aside the Order of the ld. Addl/JCIT(A) & direct the AO to delete the addition as made under section 143(1) of the Act.