TIRUPUR SOUTH ROTARY CHARITABLE TRUST,COIMBATORE vs. ACIT, EXEMPTIONS,, COIMBATORE

Upon review of the facts and submissions, however, it is evident that Form 10B was not filed within the prescribed timeframe, which is a mandatory requirement for claiming exemption under Section 11 of the Act. Consequently, the exemption claim cannot be entertained. The appellant has stated that Form 10B was not filed within the stipulated time due to the illness of its Chartered Accountant, who was handling the compliance requirements. Medical reports have been furnished to substantiate this claim. Given these circumstances, the appellant has requested that the delay be condoned and the appeal be heard on its merits. However, this issue is beyond the purview of this forum and should be addressed through a separate condonation

Page - 2 - of 5 application/before the Ld Commissioner of Income Tax (CIT) in accordance with Circular 2/2020. Given the non-compliance with statutory requirements, the appeal is dismissed for statistical purposes. The appellant is advised to seek condonation of delay before the CIT for necessary relief, if applicable which shall pave way for reconsideration of exemption claim of appellant. The Assessing Officer may revisit the appellant's claim of exemption in accordance with disposal of condonation of delay petition by the Ld CIT….”

5.0 As per brief factual matrix of the case is that a disallowance of Rs. 19 lakhs u/s 143(1) was made by CPC vide its order dated 02.06.2023. The apparent reason was some mismatch of information construed by the CPC. The Ld.First Appellate Authority concurred with the arguments taken by the assessee regarding the inadvertent mismatch of the information and proceeded to accept the appeal in terms of grounds of appeal raised by the assessee which have been extracted on page 2 of the appellate order. The Ld.First Appellate Authority however noted that Form 10B was not filed by the assessee in time and therefore it was inadmissible for grant of exemption. Holding that she is not the competent authority to condone delay in filing of Form 10B in time, the Ld.First Appellate Authority proceeded to dismiss the appeal on this point of delayed filing of Form 10B. The Ld.First Appellate Authority however observed that the Ld.AO may revisit assessee’s claim upon conclusion of delay application by the PCIT.

Page - 3 - of 5 6.0 We have noted that the only ground raised by the assessee before the Ld.First Appellate Authority was qua disallowance of Rs.19 lakhs by CPC, which was accepted by the Ld.CIT(A). It is in this context that the dismissal of appeal by the Ld.First Appellate Authority on account of delayed filing of Form 10B becomes questionable and in fact an action comprising enhancement falling u/s 251(1)(a). It is trite law that any adverse disturbance in the appeal by Ld.First Appellate Authority which has not been part of the original appeal , would constitute an act of enhancement u/s 251(1)(a). In that situation, the Ld.First Appellate Authority is mandated to confirm to prescription u/s 252 of giving an opportunity of being heard before drawing any adverse conclusions. The same has not been done in this case and therefore assessee’s rights of natural justice have been seriously and adversely impacted. 7.0 In the interest of justice, we therefore set aside the order of Ld.First Appellate Authority with the directions to readjudicate the matter afresh, in accordance with law, after giving an opportunity of being heard to the assessee. It would worthwhile for the Ld.First Appellate Authority to await the decision of PCIT qua condonation of delay application of the assessee. The Ld.Counsel for the appellant has invited our attention to judicial precedents including those of Hon’ble Madras High Court holding that the filing of Form 10B is merely directory and is not mandatory in Page - 4 - of 5 nature. It would worthwhile for the Ld.First Appellate Authority to also consider said decisions before arriving at any conclusions. 8.0 In the result, all the grounds of appeal raised by the assessee are allowed for statistical purposes. Order pronounced on 13th , Aug-2025 at Chennai.