INDRAVATI DEVI BAGRODIA CHARITABLE TRUST,KOLKATA vs. I.T.O., WARD - 1.1, EXEMPTION, KOLKATA

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ITA 491/KOL/2025Status: DisposedITAT Kolkata07 July 2025AY 2021-20224 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that an extensive review of judicial literature reveals that courts have invariably taken the view that delay in filing Form 10B is condonable and not fatal to any claim u/s 11 of the Act. The Tribunal noted that in this case, Form 10B was not uploaded within the due date, but this was claimed to be unintentional. It was also noted that the form was available before the Ld. Assessing Officer at the time of processing the return of income and was uploaded by the Chartered Accountant in time for that purpose. The filing of Form 10B has been held to be a procedural requirement and directive in nature, not mandatory. The Tribunal referred to the decision in Commissioner of Income Tax Exemptions Kolkata vs M/s Indian Sugar Mills Association, where the Hon'ble High Court of Calcutta held that the filing of the auditor's report along with the return of income is a procedural provision and therefore, directory in nature. Accordingly, the Tribunal set aside the order of the Ld. CIT(A) and the intimation of the Ld. AO, remitting the matter back to the Ld. AO for considering the claim of the assessee afresh. All grounds taken by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Indravati Devi Bagrodia Charitable Trust, is in appeal before the ITAT against the order of the Ld. CIT(A) dated 05.02.2025. The appeal arises from processing done by the AO-CPC u/s 143(1) of the Income Tax Act, 1961. The assessee filed its return of income for Assessment Year 2021-2022 on 25.02.2022, along with Form 10B. The due date for submitting Form 10B was extended to 15.01.2021. The Ld. CIT(A) dismissed the assessee's appeal, holding that Form 10B was filed belatedly and therefore, no exemption u/s 11 of the Act could be claimed. The assessee contends that the delay was not wilful and that such delays are condonable.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in computing the income at Rs. 660449/- assessing the income u/s 143(1) of the IT Act? (Question of law and fact, turning on Section 143(1) and Section 11 of the IT Act). 2. Whether, on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in not allowing the exemption u/s 11 of IT Act? (Question of law and fact, turning on Section 11 of the IT Act). Assessee's contentions: The delay in filing Form 10B was not wilful and occurred due to oversight. There are numerous judgments that mandate the condoning of delay in filing Form 10B, and such delay is not fatal to allowing the claim for exemption u/s 11 of the Act. The assessee relied on judicial pronouncements to support this argument. Revenue's contentions: The Ld. DR relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 11,Section 250,Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Appearances by: Assessee represented by : Akkal Dudhwewala, FCA Department represented by : Pankaj Pandey, Addl. CIT, Sr. DR Date of concluding the hearing : 03.07.2025 Date of pronouncing the order : 07.07.2025 O R D E R

PER SANJAY AWASTHI, ACCOUNTANT MEMBER

1.

The present appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act’) passed by the Ld. Commissioner of Income Tax (Appeals), Addl./JCIT(A)-, Noida (hereafter “the Ld. CIT(A)”], vide order dated 05.02.2025. The impugned order adjudicates issues arising out of processing done by the AO-CPC u/s 143(1) of the Act. The assessee filed the audit report in Form 10B belatedly. It is seen from the records that the assessee filed the return of income for AY 2021-22 on 25.02.2022, along with Form 10B. It is mentioned that the due date for submitting Form 10B was extended up to 15.01.2021 for this year.

1.2 The assessee carried this matter in appeal where the Ld. CIT(A) dismissed the appeal of the assessee stating that it is a statutory Indravati Devi Bagrodia Charitable Trust requirement that Form 10B should be filed one month prior to the due date of filing of return. Thereafter, the Ld. CIT(A) proceeded to hold that since Form 10B was filed belatedly, hence, there could be no claim for any exemption u/s 11 of the Act.

1.3 Aggrieved with these actions, the assessee is in appeal before the ITAT The grounds are extracted for reference:

“1. For that on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in computing the income at Rs. 660449/- assessing the income u/s 143(1) of the IT Act.

2.

For that on the facts and circumstances of the case, the Ld. AO was wrong and unjustified in not allowing the exemption u/s 11 of IT Act.

3. That the Appellant craves leave to amend or to alter the aforesaid grounds which it considers necessary for expenditure in the proper determination of the appeal before or at the hearing thereof.”

3.

Before us, the Ld. AR put forth the argument that there are considerable number of judgments which mandate the condoning of delay in filing of Form 10B. He further argued that the delay was not wilful and happened due to oversight. Thereafter, the Ld. AR proceeded to rely on a number of authorities to canvass the point that delay in filing of Form 10B is not fatal to allowing of claim for exemption u/s 11 of the Act.

3.1 The Ld. DR relied on the orders of authorities below.

4.

We have carefully considered the arguments of the Ld. AR/DR and have also gone through the documents before us. We have also perused the judicial pronouncements relied upon by the Ld. AR. It is clear that an extensive review of judicial literature on the subject reveals that the Courts have invariably taken a view that delay in filing Form 10B is condonable and not fatal to any claim u/s 11 of the Act. To illustrate this position a few of the cases need to be mentioned as under:

(a) FIIT Jee Foundation for Education Research and Training reported in 175 taxmann.com 260 (Delhi), order dated 29.04.2025.

(c) Sau Dwarkabai Tai Karwa Charitable Public Trust reported in 174 taxmann.com 245 (Bombay), order dated 25.03.2025.

5.

It is noted that in this case Form No.10B had not been uploaded within the due date, which is claimed to be unintentional on the part of the assessee. However, it is noted that the same was available before the Ld. Assessing Officer at the time of processing of the return of income and was uploaded by the Chartered Accountant in time for that. The filing of Form No.10B has been held to be a procedural requirement and directive in nature and not mandatory. We have also been made aware of the decision in the case of Commissioner of Income Tax Exemptions Kolkata vs M/s Indian Sugar Mills Association in ITAT/270/2023 IA No: GS/1/2023, GA/2/2023, order dated 10/01/2024 of the Hon'ble High Court of Calcutta, wherein it has been held that the filing of the auditor’s report along with the return of income has to be treated as a procedural provision and therefore, it is directory in nature. The relevant extract from the order is as under:

“The short question falls for consideration in the instant case is whether the Principal Commissioner of Income Tax (Appeals), NFAC was justified in allowing the appeal filed by the assessee thereby condoning the delay in filing the Form 10B of the Act. The learned Tribunal after going through the facts of the case took note of the latter circular issued by the Board in Circular No. 16 of 2022 dated 19- 07-2022 issued under Section 119(2)(b) by which the powers delegated to the Principal Chief Commissioner of Income Tax/Commissioner of Income Tax to condone the delay in filing Form 10B beyond 365 days up to 3 years from the assessment year 2018-19 or for subsequent year. Applying the said circular the learned Tribunal affirmed the order passed by the CIT (Appeals) in grounds before us in this appeal. The revenue has not dealt with the said circular nor anything has been brought on record to show that Circular No. 16 of 2022 dated 19-07-2022 cannot be applied to the case on hand. The Commissioner of Income Tax (Exemptions) while rejecting the application for condonation of delay by order dated 17-08-2020 has referred to the Circular No. 2 of 2020 dated 3.1.2020 which admittedly gives power to condone the delay in filing Form 10B up to a period of 365 days. The CIT (Appeals), NFAC also took note of a decision of the High Court of Gujarat in Commissioner of Income Tax Vs Gujarat Oil and Allied Industries reported in 1993 ITR (201) 325 wherein it was held that the filing of the auditor's report along with return of income has to be treated as procedural provision and therefore, directory in nature. Thus, we find that there is no error committed by the learned Tribunal in dismissing the appeal filed by the Indravati Devi Bagrodia Charitable Trust revenue. Accordingly, the appeal is dismissed. Substantial questions of law are answered against the revenue.”

6.

Hence, after examining the facts of the case and the cases cited, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the intimation of the Ld. AO and remit the matter back to the Ld. AO for considering the claim of the assessee afresh. As has been noted earlier the audit report was available at the time of processing the return of income and therefore, the claim of exemption under section 11 of the Act had to be allowed. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submissions it wants to make in support of its grounds of appeal. Accordingly, all the grounds taken by the assessee in his appeal are allowed for statistical purposes.

7.

In result, appeal of the assessee is allowed for statistical purposes.

Order pronounced on 07.07.2025

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