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Facts
The assessee, a charitable trust, filed its return of income on time but filed the audit report in Form 10B belatedly. The CPC denied the benefit of deductions u/s 11/12, treating receipts as income. The CIT(A) dismissed the appeal due to the delay in filing.
Held
The Tribunal accepted the affidavit of the earlier counsel, condoned the delay in filing the appeal before CIT(A), and held that the filing of Form 10B is directory. Citing CBDT Circular No.10/2019, the Tribunal directed to grant the benefit of Section 11.
Key Issues
Whether the delay in filing the first appeal before CIT(A) can be condoned due to a lawyer's mistake and whether belated filing of Form 10B should lead to denial of exemption u/s 11/12.
Sections Cited
139, 143(1), 11, 12, 154
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2017-18 Shri Omkareshwar Vs. ITO (Exemption)-1(2), Devasthan Charitable Trust, Nashik. C/o M. V. Medicals Opp. Telephone Building, Jalgaon- 425001. PAN : AAFTS7927R Appellant Respondent Assessee by : Shri Sanket M. Joshi Revenue by : Shri Chandra Vijay Date of hearing : 21.01.2025 Date of pronouncement : 28.03.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 01.07.2024 passed by Ld. Addl/JCIT(A)-1, Ludhiana [‘Ld. CIT(A)’] for the assessment year 2017-18.
Facts of the case, in brief, are that the assessee is a charitable trust furnished its return of income prior to the due date mentioned u/s 139 of the IT Act. However, the audit report in Form 10B could not be filed along with return of income but the same was filed on 11-11-2017 & therefore the CPC in the intimation dated 27-03-2019 143(1) denied the benefit of deduction u/s 11/12 of the IT Act & treated whole of the receipts as income of the assessee without allowing benefit of expenses claimed in the books of accounts as well as in the return of income.
After considering the reply of the assessee, Ld. CIT(A) dismissed the appeal of the assessee since the same was filed belatedly. It is this order against which the assessee is in appeal before this tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A) is unjustified. Ld. AR submitted before us that the delay in filing first appeal before Ld. CIT(A) was due to the wrong advise provided by the earlier counsel, who suggested to file application for rectification u/s 154 against the intimation instead to file appeal against the intimation. In this regard, an affidavit of the earlier counsel was produced before the Bench, wherein the earlier counsel has accepted his mistake that due to his advice the rectification application was filed instead of an appeal. Accordingly, Ld. AR requested to set-aside the order passed by Ld. CIT(A) wherein the appeal was dismissed on the ground of delay. Ld. AR further submitted before us that Ld. CIT(A) further erred in confirming the intimation passed by the CPC wherein the exemption was denied on the ground of belated Form 10B audit report. In this regard, it was contended that the filing of Form 10B is only directory & not mandatory & CBDT has already addressed the issue of belated filing of Form 10B audit report in its Circular No.10/2019 issued on 22-05-2019, & directed to condone the delay for asstt. years 2016-17 & 2017-18 in para 4(i) of the circular by observing as under :- “4(i) The delay in filing of Form no. 10B for AY 2016-17 and AY 2017-18, in all such cases where the Audit Report for the previous year has been obtained before the filing of return of income and has been furnished subsequent to the filing of the return of income but before the date specified under section 139 of the Act is condoned.”
Apart from above, Ld. AR also relied on the Co-ordinate Bench of the Tribunal’s decision passed in the case of Sikar Zilla Welfare Trust in order dated 28-08-2024. Accordingly, Ld. AR requested before the Bench to allow the benefit of exemption u/s 11/12 of the IT Act which was denied by CPC on the ground of belated filing of audit report in Form 10B.
Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record. We find that Ld. CIT(A) has not condoned the delay in filing of this appeal. In this regard, we find that the earlier counsel has furnished an affidavit wherein he accepted that the appeal was not filed on his advise & instead a rectification application was moved which is still pending. We accept the affidavit of earlier counsel & condone the delay since no one should be punished for the mistake of the counsel & hold that the assessee was prevented by reasonable cause in not filing the appeal within the prescribed time limits before Ld. CIT (A). We also find that Ld. CIT(A) has confirmed the intimation issued by CPC by holding that Form 10B audit report was filed belatedly. In this regard, we find that CPC has denied the benefit of exemption u/s 11/12 of the IT Act as well as determined the whole of the receipts as income of the assessee by not giving benefit of deduction of expenses claimed in the books of accounts. In this regard, it was the contention of Ld. Counsel of the assessee that the filing of form 10B is directory only & not mandatory & therefore the CBDT has relaxed this condition by issuing a specific Circular No.10/2019 dated 22-05-2019, wherein delay in filing of Form 10B for assessment year 2016-17 & also for assessment year 2017-18 has been condoned. We find force in the arguments of the counsel of the assessee that the requirement of filing of Form 10B audit report is directory & not mandatory & in the instant case the same was filed with a delay of four days only & was already available before the CPC when the intimation was passed. Further, we also find that