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Facts
The assessee, Shri Chhatrapati Shivaji Shikshan Sanstha, for A.Y. 2015-16, filed its income return on 30.09.2015. Although the Audit Report on Form 10B was procured on the same day, it was filed online much later on 19.01.2023. The Ld. CIT(A) upheld a rectification order that denied exemption u/s 11 of the Act solely due to this delay in filing Form 10B online.
Held
The Tribunal, relying on various judicial precedents including a decision of the Gujarat High Court, held that filing the Audit Report on Form 10B is a procedural requirement. It ruled that the benefit of exemption u/s 11 should not be denied merely for delayed online filing of the report, especially when it was procured on time and subsequently submitted during the pendency of appeal proceedings. The impugned order of the Ld. CIT(A) was set aside.
Key Issues
Whether the exemption under Section 11 of the Income-tax Act can be denied solely due to the delayed online filing of the Audit Report in Form 10B, when the report was procured on time and submitted during appellate proceedings.
Sections Cited
11, 10B, 154, 250, 10(23C), 12A, 139
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y.2015-16 is directed against the order of Ld. CIT(A)/National Faceless Appeal Centre, Delhi dated 12.11.2024 passed u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which inturn is arising out of Rectification order u/s.154 of the Act dated 02.02.2021.
Sole grievance of the assessee is that ld.CIT(A) erred in confirming the Rectification order passed by ld. Assessing Officer u/s.154 of the Act by not allowing exemption u/s.11 of the Act merely that assessee has not filed the Audit Report on Form 10B has not been filed within the stipulated time limit through online mode.
At the outset, Ld. Counsel for the assessee submitted that the return of income for A.Y. 2015-16 was furnished on 30.09.2015 but Audit Report on Form 10B though procured on 30.09.2015 was filed online on 19.01.2023. Ld. Counsel based on settled judicial precedents including the decision of this Tribunal in the case of Sahaj Seva Trust Vs. ITO – order dated 06.05.2025 and in the case of ACIT Vs. The Nanded Sikhgurudwara Sachkhand Hazur Sahib – and 809/PUN/2024 order dated 26.05.2025 submitted that filing of Audit Report on Form 10B is directory in nature and even if it is filed during the pendency of appeal proceedings, the same needs to be entertained.
On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).
5. We have heard the rival contentions and perused the record placed before us. In the instant case, benefit of exemption u/s.11 of the Act has been declined to the assessee solely on the ground of non filing of Audit Report on Form 10B. Assessee has procured the Audit Report on 30.09.2014. Copy of the same is placed at pages 13 and 14 of the paper book. However, Audit Report on Form 10B has been filed online at a much later date, i.e. 19.01.2023. Further, we observe that during the pendency of appeal proceedings Audit Report stood submitted as the date of impugned order is 12.11.2024 and ld.CIT(A) has taken due cognizance that the Audit Report has been filed online but there is delay. Under these given facts and circumstances, we find that case of the assessee is squarely covered by plethora of decisions. We find support from the decision of this Tribunal in the case of The Nanded Sikhgurudwara Sachkhand Hazur Sahib (supra) and the finding of this Tribunal reads as under :
“18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed by both sides. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case disallowed the claim of exemption u/s 10(23C) of the Act on the ground that the assessee trust has not filed Form No.10BB before the statutory time limit but has filed the return of income as well as Form No.10BB after the due date of time. Further, the application for condonation of delay filed with the CIT(Exemption) was also rejected by the CIT(Exemption). The Assessing Officer further held that the funds of the trust are not being properly utilized / supervised as required by the provisions of section 10(23C) of the Act. We find the Ld. CIT(A) / NFAC allowed the claim of exemption u/s 10(23C) made by the assessee, the reasons of which have already been reproduced in the preceding paragraphs. We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue.
So far as the observations of the Assessing Officer that the funds of the assessee trust are not properly utilized, managed and supervised as required under the provisions of section 10(23C)(v) of the Act is concerned, we find the Ld. CIT(A) / NFAC following the decision of the Coordinate Bench of the Tribunal in assessee‟s own case has given a finding that the observation of the Assessing Officer is a bald observation. We find the Revenue is not in appeal on this issue as per the grounds of appeal and therefore, we are not concerned with the same.
20. So far as the grievance of the Revenue that the Ld. CIT(A) / NFAC has erred in allowing the appeal of the assessee by holding that filing of audit report in the prescribed form before completion of the assessment proceedings is sufficient compliance under the provisions of the Act is concerned, we find the Ld. CIT(A) / NFAC while deciding the issue has followed the decision of the Coordinate Bench of the Tribunal in assessee‟s own case for assessment year 2014-15. We find the Hon‟ble Gujarat High Court in the case of CIT (Exemptions) vs. Laxmanarayan Dev Shrishan Seva Khendra (supra), while deciding an identical issue after considering the decision of the Hon'ble Supreme Court in the case of PCIT vs. Wipro Limited (supra), has held that when the assessee has already filed the audit report in Form 10B electronically during the pendency of appellate proceedings along with copy of audited financial statements, delay in filing of the said Form is rightly condoned by the Commissioner of Appeals and the Tribunal. The relevant observations of the Hon‟ble High Court read as under:
"4. Learned Senior Standing Counsel Ms.Maithili Mehta for the appellant submitted that in case of Principal Commissioner of Income Tax-III, Bangalore v. M/s.Wipro Limited of the Hon'ble Supreme Court rendered on 11th July, 2022 in Civil Appeal No.1449 of 2022 it was held that requirement of Section 10B(8) of the Act which provides for requirement of furnishing declaration for claiming exemption under Section 10B of the Act is mandatory but the time limit within which such declaration is to be filed is also held to be mandatory. Relying upon the aforesaid decision, it was submitted that the assessee ought to have filed the audit report in Form 10B of the Act before the due date of filing of the return to claim the exemption under Section 12A of the Act.
Reliance placed by the learned Senior Standing Counsel Ms.Maithili Mehta for the appellant on the decision of the Hon'ble Supreme Court in case of The Principal Commissioner of Income Tax-III and Others versus M/s. Wipro Limited in Civil Appeal No.1499 of 2022 would not be applicable in the facts of the case, as in the facts of the present case, the assessee has claimed the exemption under Section 11 read with Section 12A(1)(b) of the Act which required the assessee to file Audit Report in Form of 10B of the Act which has nothing to do with claiming 100% exemption of total income in respect of newly established 100% Export Oriented Undertakings under Section 10B of the Act. Section 10B(8) of the Act requires the assessee to file an undertaking before the due date of furnishing of return of income under sub-section (1) of Section 139 of the Act before the Assessing Officer in writing that the provision of Section 10B of the Act may not be made applicable to him, otherwise the provision of this Section shall not apply to him for any of the relevant assessment year.
Considering the language of the provision of Section 10B(8) of the Act, the Hon'ble Supreme Court held that it was mandatory on part of the assessee to file declaration before the due date of filing of return under Sub-section (1) of Section 139 of the Act, whereas, in the facts of the said case the assessee filed such undertaking along with the revised return under Sub-section (5) of Section 139 of the Act and in such facts, the Hon'ble Supreme Court held that the twin conditions prescribed under Section 10B(8) of the Act was mandatory to be fulfilled and it cannot be said that though the declaration is mandatory, the filing of such declaration within the due date of filing of return under Sub-section (1) of Section 139 of the Act would be directory.
7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) in Special Civil Application No.6097 of 2020 decided on 09th December, 2020 as well as the decision in case of Social Security Scheme
of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious. In the facts of the case, when the assessee has already filed the audit report in Form 10B electronically on 27.02.2021 during pendency of appellate proceedings along with copy of audited financial statements, delay in filing the said form is rightly condoned by CIT(A) and the Tribunal.
In such circumstances, we are of the opinion that the Tribunal has not committed any error by not following the decision in case of M/s.Wipro Limited (supra) as referred to and relied upon by learned advocate for the appellant- Revenue, and has rightly followed the decision of this Court in case of Social Security Scheme of GICEA (supra).
In view of the foregoing reasons, we are of the opinion that no question of law much less any substantial question of law arises from the impugned order of the Tribunal. The Appeal is accordingly dismissed." We find the Hon‟ble Gujarat High Court in the case of CIT 21. (Exemption) vs. Anjana Foundation (supra) has held that a charitable trust cannot be denied benefit of section 11 solely for not filing audit report in Form No.10B, as it is only a procedural requirement.
So far as the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai v. Dilip Kumar & Company & Ors. (supra) is concerned, we are of considered opinion that the said decision is not applicable to the facts of the present case as that case was under the Customs Act and not under the Income Tax Act. Further, the facts in that case were that the respondents imported a consignment of Vitamin - F50 powder (feed grade) under Bill of Entry No. 8207, dated 19.08.1999. They claimed the benefit of concessional rate of duty at 5%, instead of standard 30%, as per the Customs Notification No. 20/1999 and classified the product under Chapter 2309.90 which admittedly pertains to prawn feed. They relied on the ratio in Sun Export Case and claimed the benefit of exemption. The benefit of Customs Notification No. 20/1999 was, however, denied to the respondents on the plea of the department that the goods under import contained chemical ingredients for animal feed and not & 809/PUN/2024 animal feed/prawn feed, as such, the concessional rate of duty under the extant notification was not available. The department classified the consignment under Chapter 29 which attracts standard rate of customs duty. The adjudicating authority, namely, the Assistant Commissioner of Customs, distinguished Sun Export Case (supra), while accepting the plea of the department to deny the concessional rate. The Commissioner of Customs (Appeals) reversed the order of the Assistant Commissioner and came to the conclusion that Sun Export Case (supra) was indeed applicable. The department then approached the Customs, Excise and Service Tax
Tribunal (CESTAT), which affirmed the order of the Commissioner of Customs (Appeals). Aggrieved the assessee filed appeal before the Hon'ble Supreme Court. Under these circumstances, the Hon'ble Supreme Court has held as under: "52. To sum up, we answer the reference holding as under:
(1) Exemption notification should be interpreted strictly, the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.
(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled." However, as mentioned earlier, the Hon‟ble Gujarat High 23. Court after considering the decision of the Hon'ble Supreme Court in the case of PCIT vs. Wipro Limited (supra) has held that where the assessee had already filed audit report in Form 10B electronically during pendency of appellate proceedings along with copy of audited financial statements, it is sufficient compliance for claiming the exemption u/s 11 of the Act. Since in the instant case the assessee has already & 809/PUN/2024 submitted the audited report in Form No.10BB during assessment proceedings itself, therefore, the assessee in our opinion is in a better position. The various other decisions relied on by the Revenue as per grounds of appeal or during the course of arguments are distinguishable and not applicable to the facts of the present case. In view of the above discussion, we do not find any infirmity in the order of the Ld. CIT(A) / NFAC allowing the claim of exemption u/s 10(23C)(v) of the Act for belated filing of Form No.10BB. We hold and direct accordingly. The grounds raised by the Revenue are accordingly dismissed.”
6. Respectfully following the above decision and on examining the facts of the instant case, we find that the is same is squarely applicable on the facts of the instant case and therefore the benefit of exemption u/s.11 of the Act should not have been denied to the assessee merely for delay in filing of Audit Report on Form 10B which has subsequently filed online during the pendency of the appeal proceedings. Impugned order of ld.CIT(A) is set aside and grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on this 25th day of August, 2025.