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Facts
The assessee filed its return of income along with an audit report in Form 10BB on 31.03.2018, under Section 139(4). The CPC and CIT(A) denied the exemption claimed under Section 10(23C)(vi) on the grounds that the audit report was not filed within the due date.
Held
The Tribunal held that for claiming exemption under Section 10(23C)(vi), the assessee needs to get its accounts audited and furnish the report along with the return of income. Since the assessee filed the return along with the audit report, it complied with the provisions.
Key Issues
Whether the exemption under Section 10(23C)(vi) can be denied solely on the ground that the audit report was filed along with a belated return under Section 139(4) and not within the due date prescribed under Section 139(1).
Sections Cited
154, 143(1), 10(23C)(vi), 139(1), 139(4), 288
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M :
Aforesaid appeal filed by the assessee for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 20.02.2025.
The only issue involved in this case is that the CPC, Bengaluru, in the order passed u/s 154 r.w.s 143(1) of the Income-tax Act, 1961 (hereinafter “the Act”), has not allowed the exemption claimed u/s. 10(23C)(vi) of the Act, on the ground that the assessee did not file the audit report in Form 10BB within the stipulated time.
At the outset, the Learned Authorized Representative (AR) of the assessee submitted that the return of income was filed on 31.03.2018 along with the audit report in Form-10BB. It was further stated that the return was processed on 12.12.2018, but the claim of exemption u/s. 10(23C)(vi) of the Act was not allowed. The Ld. AR submitted that, as
per section 10(23C)(vi) of the Act, the requirement is to furnish the audit report along with the return of income, and there is no stipulation that it must be filed within the due date prescribed u/s 139(1) of the Act. It was contended that since the return, along with the audit report, was filed u/s 139(4) of the Act, there was no requirement to file a condonation petition, as held by the Ld. CIT(A). In support of this contention, the Ld. AR relied on the judgment of the Hon’ble Madras High Court in Chandraprabhuji Maharaj Jain v. DCIT [2019] 110 taxmann.com 11 (Mad) and the decision of the ITAT Pune Bench in ACIT v. Nanded Sikh Gurudwara Sachkhand Hazur Sahib [2025] 174 taxmann.com 1116 (Pune-Trib.).
The Ld. Departmental Representative (DR), relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. The assessee has filed the return of income along with the audit report in Form 10BB on 31.03.2018 u/s 139(4) of the Act. The CPC and the Ld. CIT(A) denied the exemption claimed u/s 10(23C)(vi) of the Act on the ground that the audit report was not filed within the due date, i.e., 17.10.2016. We agree with the submission of the Ld. AR that, for claiming exemption u/s 10(23C)(vi) of the Act, the requirement is that the assessee must get its accounts audited by an accountant, as defined in the Explanation below sub- section (2) of section 288, and furnish the audit report in the prescribed form, duly signed and verified, along with the return of income. We are of the view that assessee has complied with the provision of section 10(23) as it has filed the return along with the audit report.
Accordingly, we direct the A.O to allow the exemption claimed u/s 10(23C)(vi) of the Act. In view of the above, the appeal filed by the assessee is allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 30th day of June, 2025 at Chennai.