Loading judgment…
Facts
The assessee, a Public Charitable Society, filed its return of income and Form 10BB. The assessment was completed under Section 143(1) at an assessed income of Rs.25,58,626/-, disallowing a sum claimed as accumulated income for charitable purposes. The delay in filing Form 10BB was the primary issue.
Held
The Tribunal held that the delay in filing the audit report (Form 10B) before one month from the due date of filing the return of income is not mandatory for claiming exemption under Sections 11 & 12. The assessee is entitled to claim exemption even if filed at a later stage.
Key Issues
Whether the delay in filing Form 10BB would disentitle the assessee from claiming exemption under Sections 11 and 12 of the Income Tax Act.
Sections Cited
12A, 11(2), 139(4a), 139(1), 143(1), 119(2), 119(2)(b), 11, 12
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2023-2024 Salt Lake Sanskritik Sansad,…………...……Appellant Sector-1, Trust Bhawan, CA-49, Salt Lake, Kolkata-700064, West Bengal [PAN:AAETS4162K] -Vs.- Deputy Director of Income Tax,................Respondent Circle CPC, Bengaluru, Prestige Alpha, Post Bag No. 2, Electronic City Post, Hosur Road, Bangalore-560 100, Karnataka Appearances by: Shri N. Kausic, A.R., appeared on behalf of the assessee Shri Kallol Mistry, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: April 23, 2025 Date of pronouncing the order: May 30, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Addl./JCIT(Appeals)-2, Chandigarh dated 30th December, 2024 passed for Assessment Year 2023-24
Brief facts of the case are that the appellant is a Public Charitable Society formed on 02.08.1982 and registered under (A.Y. 2023-2024) Salt Lake Sanskritik Sansad West Bengal Societies Registration Act, 1961 and had got registration under section 12A of the Income Tax Act, 1961. The assessee-Society is engaged in relief of the poor, education, yoga, medical relief and advancement of any other object of general public utility. The assessee Charitable Trust filed its return of income on 01.09.2023, prescribed Form No. 10 vide Acknowledgment No. 221781630010923 in respect of accumulation of income of a sum of Rs.5,73,129/- under sub- section 2 of section 11 of the Income Tax Act. The assessee-Society also submitted statutory audit report on 31.10.2023 prescribed Form No. 10BB specifying a sum of Rs.1,32,36,648/- as income required to be applied in India by the appellant during the previous year. The assesee-Society also filed return of income on 14.11.2023 under section 139(4a) read with section 139(1) declaring total income as ‘NIL’. The assessee-Society furnished Form 10A and Form 10BB for the assessment year 2023-24 on or before 31.03.2024 as non-furnishing of audit report in the prescribed form would result in denial of exemption. The assessment was completed under section 143(1) of the Act at an assessed income of Rs.25,58,626/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
After considering the submissions made by the assessee, the ld. Addl./JCIT(Appeals) dismissed the appeal filed by the assessee saying that the assessee-Society is a Charitable Society filed Form 10BB belatedly and the power to condone the delay lies with the Income Tax Officer under section 119(2) of the Act.
(A.Y. 2023-2024) Salt Lake Sanskritik Sansad 4. On being aggrieved, the assessee preferred an appeal before the ITAT and raised the following grounds:- (1) For that on the facts and circumstances of the case, order passed by the ld. Addl./JCIT(A)-2, Chandigarh is bad in law as well as on facts. (2) For that on the facts and circumstances of the case, the ld. Addl./JCIT(A)-2, Chandigarh erred in confirming the action of the ld. DCIT, Circle CPC disallowing a sum of Rs.25,58,626/- being aggregate of a sum of Rs.5,73,129/- claimed in ITR as amount of income accumulated u/s 11(2) and a sum of Rs.19,85,497/- claimed as income accumulated for application to Charitable purpose to the extent it does not exceed 15% of the income, on the alleged ground that appellant has not e-filed the Form 10BB Audit report within specified due date 31st October, 2023.
I have heard both the sides. It was the submission of the ld. Counsel for the assessee that the tax audit report was filed much prior to the date of passing of the order. He also relied on the decision of the Hon’ble High Court of Gujrat in the case of Sarvodaya Charitable Trust -vs.- ITO (Exemption) reported in (2021) 125 taxmann.com 75, wherein it was held that “benefit of exemption should not be denied merely on account of delay in filing of the audit report”. He, therefore, pleaded to set aside the orders passed by the lower authorities.
On the other hand, ld. Departmental Representative submits that the assessee ought to have filed the condonation petition before the revenue authorities under section 119(2)(b) of the Act as directed by the CBDT vide Circular No. 16/2024 dated 18.11.2024. The assessee has a remedy to approach the authorities under section 119(2) of the Act to condone the delay in filing Form 10BB, but the assessee failed to do so. Therefore, the 3 (A.Y. 2023-2024) Salt Lake Sanskritik Sansad ld. Commissioner (Appeals) has rightly dismissed the appeal filed by the assessee. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have perused the material available on record as well as the written submission filed by the assessee. It is an undisputed fact that the assessee-Trust was registered under section 12A of the Act and the registration is still in existence. It is also an admitted fact that the accounts of the assessee-Trust have audited by a Chartered Accountant and the audit report in Form 10B was obtained by the assessee. However, the only lacunae in the present case is that Form 10B was not filed one month prior to the date of filing of the return of income for the relevant assessment year. It is also an admitted fact that at the time of filing of the return of income, the audit report under Form 10B was uploaded along with the return of income. It is also an admitted fact that at the time of processing the return of income under section 143(1) of the Act, the audit report by way of Form 10 was very much available before the CPC/AO. The ld. Counsel for the assessee has heavily relied on the decisions of the Hon’ble Gujarat High Court in the case Sarvodaya Charitable Trust -vs.- ITO (Exemption) reported in (2021) 125 taxmann.com 75 and Hon’ble Jurisdictional High Court in the case of CIT -vs.- Rai Bahadur Bissesswarlal Motilal Malwasie Trust reported in (1992) 195 ITR 825, wherein it was categorically held that filing of Form 10B before one month from the due date of filing of the return of income is not mandatory requirement for the purpose of claiming exemption under sections 11 & 12 of the Act and even if filed at later stage, the assessee is entitled to claim (A.Y. 2023-2024) Salt Lake Sanskritik Sansad exemption under sections 11 & 12. The facts of the present case on hand are similar to facts of the above cited case laws, therefore, I am of the view that the assessee-Trust is entitled to claim exemption under section 11 of the Act. Therefore, I direct the CPC/Assessing Officer to delete the adjustment made by the CPC. Hence, the grounds raised
by the assessee are allowed.