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Facts
The assessee, Football Players Association of India, claimed exemption under Section 11 of the Income Tax Act for AY 2018-19 and 2020-21. This exemption was denied by the AO-CPC and subsequently confirmed by the CIT(A) because Form 10B, which is crucial for claiming Section 11 exemption, was filed belatedly for both assessment years.
Held
The Income Tax Appellate Tribunal (ITAT) ruled that the filing of Form 10B is a procedural and directory requirement, not mandatory, and that delays in its submission are condonable. Relying on established judicial precedents and relevant circulars, the Tribunal set aside the orders of the CIT(A) and the AO-CPC, remitting the case back to the AO for fresh consideration, emphasizing that the audit report was available during the processing of the return.
Key Issues
Whether the belated filing of Form 10B, a pre-requisite for claiming exemption under Section 11 of the Income Tax Act, should lead to the denial of the exemption, and if such a delay is condonable.
Sections Cited
250, 143(1), 143(1)(a), 11, 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Appearances by: Assessee represented by : Siddarth Agarwal, Advocate Department represented by : Archana Gupta, Addl. CIT, Sr. DR Date of concluding the hearing : 18.06.2025 Date of pronouncing the order : 30.06.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER
This is a batch of two appeals of the same assessee having common issues and accordingly, these two appeals are being disposed of through a common order. For the purposes of this adjudication the lead case will be for AY 2018-19. It is seen that the case for AY 2018- 19 (ITA No. 414/Kol/2025) arises from an order passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), passed by Ld. Commissioner of Income Tax (Appeals), Addl/JCIT(A), Mysore, vide order dated 14.02.2025. The second case pertaining to AY 2020-21 ( ) arises &415/Kol/2025 Football Player Association of India from order passed u/s 250 of the Act dated 14.02.2025. Both of the impugned orders adjudicate issues arising out of processing done by the AO-CPC u/s 143(1) of the Act. In both these cases the assessee filed return of income and the audit report in form 10B belatedly. It is seen from the records that the assessee filed the return of income for AY 2018-19 on 29.03.2019, whereas Form 10B was filed on 30.04.2019. Admittedly, for AY 2020-21, the return of income was filed on 15.02.2021 and Form 10B was filed on 15.02.2021; it is mentioned that the due date for submitting Form 10B was extended up to 15.01.2021 for this year.
1.2 The Ld. CIT(A) dismissed the appeal of the assessee stating that it is a statutory 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 for both of the years were 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 for the sake of convenience the grounds pertaining to (AY 2018-19) are extracted for reference:
“1. For that, on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the action of the A.O(CPC) in assessing the income of the assessee at Rs.1,07,17,801/- against the returned income of Rs.63,510/- by denying the exemption claimed by the assessee u/s 11 of the Act on the ground that the Audit Report in Form 10B and the Return of Income was not filed within due date. 2 For that the Ld. CIT(A) ought to have held that the impugned disallowance made by the A.O (CPC) was not permissible as per the provisions of sec. 143(1)(a).
Without prejudice to above, the Ld. CIT(A) ought to have held that the net income of the assessee of Rs. 16,71,176/- was exigible to tax and not the gross income of Rs. 1,07,17,801/-.
4. The appellant craves leave to add further grounds of appeal
or alter the grounds at the time of hearing.”
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 delays were not wilful and happened due to oversight. It was mentioned that the assessee was under the genuine belief that the AO-CPC had made an error due to oversight in &415/Kol/2025 Football Player Association of India denying exemption u/s 11 of the Act. In fact, for both of the years, rectification applications have been duly filed with AO-CPC under the belief that a genuine error had occurred. 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.
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 even 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.
(b) Laxmannarayan Dev Shrishan Seva Khendra reported in 167 taxmann.com 548 (Gujarat), dated 10.09.2024 (c) Sau Dwarkabai Tai Karwa Charitable Public Trust reported in 174 taxmann.com 245 (Bombay), order dated 25.03.2025.
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. The filing of Form No.10B has been held to be a procedural requirement and directive in nature and not mandatory. Before us, the assessee relied upon the decision 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 &415/Kol/2025 Football Player Association of India 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, 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 revenue. Accordingly, the appeal is dismissed. Substantial questions of law are answered against the revenue.
It was also submitted before us by the Ld. AR that the due date for filing the return of income had been extended and the audit report was required to be filed a month earlier. The same was filed belatedly but was available at the time of processing of the return of income and therefore, the claim of exemption should not have been denied. Hence, after examining the facts of the case, 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 submission it wants to make in support of its grounds of appeal.
With these remarks, appeals of the assessee are allowed for statistical purposes.
Order pronounced on 30.06.2025