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Facts
The assessee, a registered charitable trust, filed its return of income along with Form 10B. However, the CPC processed the return under Section 143(1) disallowing exemption under Section 11 due to Form 10B not being on record. An application for rectification was rejected by the Ld. CIT(A) who confirmed the denial of exemption.
Held
The Tribunal held that the filing of Form 10B is a procedural requirement and that substantive benefits under Section 11 should not be denied for a technical defect, especially when the report was filed within the due date. The CPC and Ld. CIT(A) erred in overlooking the timely filed Form 10B.
Key Issues
Whether exemption under Section 11 can be denied due to alleged non-filing of Form 10B when it was filed within the due date, considering it a procedural requirement.
Sections Cited
154, 11, 250, 1961, 143(1), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal has been filed by the Assessee against the order dated 17.06.2025 passed by the Ld. ADDL/JCIT(A)-9, Delhi (‘Ld. CIT(A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short), for the Assessment Year 2016-17.
The assessee has raised following grounds of appeal:-
“(1) The order u/s.154 deserved to be decided in the favour of appellant, particularly when Form 10B was obtained well before the due date of filing of return of income.
(2) Even otherwise, for a venial lapse, substantial relief cannot be denied u/s.11 when no other conditions are vitiated.
(3) On the facts and circumstances of the case and under the law, the appeal may be allowed.
(4) If the appellant were to be treated as AOP, the appellant ought to be granted benefit of expenses incurred for objects.
(5) The above grounds are without prejudicial to one another.
(6) The appellant craves leave to add, alter or vary any of the grounds of appeal.”
3. The brief facts of the case are that the assessee, a registered charitable trust u/s 12A of the Act, filed its return of income for the year under consideration on 07.08.2016. The return was processed by CPC u/s 143(1) on 03.01.2018, disallowing exemption u/s 11 and raising a demand of Rs.7,83,650/-, on the ground that Form 10B was not available on record. The assessee filed a rectification application u/s 154 on 08.03.2022; but, the same was rejected by order dated 06.04.2022, again citing belated submission of Form 10B. The Ld. CIT(A) confirmed the denial of exemption, primarily on the ground that Form 10B was not filed within the prescribed time.
4. It is the fact on record that Form 10B dated 25.05.2016 had been filed digitally on 07.08.2016, prior to the due date of return filing and that the audit report was, thus, very much on record at the time of filing the return. The CBDT Circular No. 10/2019 dated 22.05.2019 clarified that in cases of delay in filing Form 10B for assessment years prior to AY 2018-19, the delay may be condoned. Thus, the requirement to file Form 10B being procedural in nature, and substantive benefits under section 11 should not be denied for a mere technical defect, especially when the audit report was actually filed in time. We find that the audit report in Form 10B was duly filed on 07.08.2016, well within the prescribed due date. However, CPC erroneously ignored this while processing the return u/s 143(1) of the Act, resulting in disallowance of exemption u/s 11 of the Act. The Ld. CIT(A) also overlooked the original timely filed Form 10B and relied instead on the revised version submitted on 16.12.2019. Further, keeping in view the CBDT Circular No. 10/2019 and judicial pronouncements that regard the filing of Form 10B as a procedural requirement, we hold that the exemption u/s 11 of Shramik Vikas Sansthan Vs. ITO Asst. Year : 2016-17 - 3– the Act cannot be denied merely on the ground of alleged non-filing, especially when the report was in fact filed within the due date. Accordingly, the assessee’s claim for exemption u/s 11 is allowed.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open Court on 10.12.2025.
Sd/- Sd/- (SUCHITRA R. KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 10.12.2025 **btk आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy