Loading judgment…
Facts
The assessee filed its return of income after the due date due to a technical glitch in uploading Form 10B. The CPC processed the return under Section 143(1) and disallowed exemption under Sections 11 and 12 solely on the ground of belated upload of Form 10B.
Held
The Tribunal held that the delay in uploading the audit report due to a bona fide technical issue should not deny exemption under Sections 11 and 12, especially when the report was signed and available before the due date. The intimation issued was quashed.
Key Issues
Whether a delay in uploading the audit report (Form 10B) due to technical glitches, when the report was otherwise available, can be a ground to deny exemption under Sections 11 and 12 of the Income-tax Act.
Sections Cited
250, 139, 139(4A), 11(2), 143(1), 11, 12
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2023-24 Silk Association of India……...……..…………………....Appellant C/o P K Himmatsinghka & Co. 41, B B Ganguly Street, 2nd Floor, Kol-12. [PAN: AAOCS9213J] vs. ITO, Ward-8(2), Kolkata…………………..………………….…..... Respondent Appearances by: Shri P. K. Himmatsinghka, AR, appeared on behalf of the appellant. Shri Kallol Mistry, JCIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 29, 2025 Date of pronouncing the order : July 30, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order dated 31.01.2025 passed by the CIT, Appeal ADDL/JCIT(A)-7, Mumbhai [in short CIT(A)] under section 250 of the Income-tax Act, 1961.
Brief facts of the case ate that the assessee’s accounts were duly audited for the financial year ending on 31.03.2023. The audit report in Form 10B was signed on 01.09.2023, and the Unique Document Identification Number (UDIN) was generated on 20.10.2023. However, due to unforeseen technical glitches, the assessee was unable to upload Form 10B on the e-filing portal within the prescribed due date of 31.10.2023. The form was eventually uploaded on 16.11.2023, resulting in a delay of 16 days. The return of income under Section 139 read with Section 139(4A) of the Act was filed on 18.11.2023, which was within the extended due date of 30.11.2023. Additionally, Form 10 Assessment Year: 2023-24 Silk Association of India under Section 11(2) of the act was filed on 17.10.2023, declaring accumulation of income amounting to ₹1,75,359. Despite these compliances, the return was processed under Section 143(1) of the Act by the CPC, disallowing exemption under Sections 11 and 12 on the sole ground that Form 10B was uploaded belatedly on 16.11.2023 instead of within the due date i.e., 31.10.2023. Consequently, the CPC determined the total income of the assessee at ₹2,49,979 instead of ‘NIL’ as returned.
Dissatisfied with the order of intimation issued under Section 143(1), the assessee has preferred an appeal before Ld CIT (A) and which was dismissed by the CIT(A) by upholding the order of the CPC.
Aggrieved by the above order assessee is in appeal before this Tribunal. At the time of hearing the Ld. AR contended that the audit report in Form 10B was available and signed prior to the due date and before processing of the return and the delay in uploading was only due to a technical issue. It was further submitted that such procedural delay should not defeat the substantive claim of exemption, especially when there was no mala fide intention on the part of assessee. In support, reliance was placed on the judgment of the Hon’ble Calcutta High Court in the case of CIT v. Rai Bahadur Bissesswarlal Motilal Malwasie Trust [1996] 195 ITR 825 (Cal), wherein it was held that the filing of the audit report is a procedural requirement, and so long as the report is available with the Assessing Officer before completion of the assessment, exemption under Section 11 cannot be denied.
On the other hand, the ld. DR supported the order of the authority below.
We after considering the rival submissions and the material available on record, we find merit in the contentions of the assessee.
Assessment Year: 2023-24 Silk Association of India The audit report in Form 10B was admittedly signed and UDIN generated prior to the due date and before the completion of the processing under Section 143(1). The delay in uploading the same was due to a bona fide technical issue and cannot be a ground to deny exemption under Sections 11 and 12. The principle laid down by the Hon’ble Jurisdictional High Calcutta High Court in the case cited above is squarely applicable to the present case of the assessee. Accordingly, the intimation issued under Section 143(1) without considering the audit report already available is held to be bad in law and liable to be quashed. The CPC is directed to grant exemption under Sections 11 and 12 of the Act by deleting the disallowance made in the intimation.
In the result, the appeal of the assessee is allowed. Kolkata, the 30th July, 2025.