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Facts
The assessee, a charitable trust, filed its return for Assessment Year 2018-19, claiming exemption under Section 11. A demand of Rs. 3,82,168/- was raised during processing under Section 143(1) because Form 10B was not filed electronically with the return, despite being obtained before the due date. The appeal to the CIT(A) was dismissed, and a condonation request for belated filing of Form 10B was rejected by the CIT(Exemption).
Held
The Tribunal condoned the 15-day delay in filing the appeal. Following precedents, it held that the benefit of Sections 11 and 12 cannot be denied merely due to the belated filing of Form 10B, as it is a procedural rather than a mandatory requirement. The Assessing Officer was directed to verify the Assessee's claim on merits, considering the Form 10B filed as valid.
Key Issues
Whether the benefit of exemption under Sections 11 and 12 of the Income Tax Act can be denied solely due to belated filing of Form 10B, which is a procedural requirement.
Sections Cited
11, 12, 12A, 139(1), 139(4), 143(1), 154, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :: NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRYShri Pandurang Sansthan
This appeal has been preferred by the Assessee against the order dated 24/06/2024 impugned herein passed by the ADDL/JCIT (Appeals), Madhurai (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2018-19.
(Shri Pandurang Sansthan Deulgaon Mali) 2. At the outset, it is observed that there is a delay of 15 days in filing the present appeal. The Assessee has filed sworn affidavit dated 06/09/2024 and mentioned the reasons for causing delay. The reasons for condonation of delay stated by the Assessee, appears to be genuine, bonafide and unintentional, thus the delay is condoned.
Coming to the merits of the case, it is observed that in this case, the Assessee being a public charitable trust registered under applicable laws, filed its return of income on dated 31/03/2019 declaring total income of Rs. 32,099/- for the assessment year under consideration before the due date as per section 139(4) of the Act and claimed exemption u/sec. 11 of the Act. Subsequently, the return filed by the Assessee was processed u/sec. 143(1) of the Act on dated 30/12/2020 by the CPC, whereby a demand of Rs. 3,82,168/- has been raised mainly on the ground that Form No. 10B was not filed electronically along with return.
4. The Assessee, being aggrieved, challenged the said disallowance/ addition by filing first appeal before the Ld. Commissioner, however, of no avail, as the Ld. Commissioner dismissed the appeal of the Assessee by holding that the Assessee has already uploaded the digital signed Form 10B on 16/10/2021 (Shri Pandurang Sansthan Deulgaon Mali) and has filed condonation petition before the jurisdictional CIT(Exemption), Pune, whereby application dated 31/05/2021 which is pending for disposal and, therefore, CPC is correct on disallowance exemption u/sec. 11 of the Act, as the return was filed after the due date u/sec. 139(1) of the Act and Form 10B filed is not valid, being unsigned and the appellate authority has no discretionary power, to relax the provision of the statute.
5. The Assessee has claimed that it had obtained audit report in Form 10B from the Chartered Accountant on 22/08/2018 i.e. well before the due date, however, due to bonafide and technical lapses, the said form was e-filed on 16/02/2021 and, thereafter the Assessee also sought for condonation of delay in filing Form 10B before the Ld.CIT(Exemption), Pune dated 31/05/2021, which has subsequently been rejected vide order dated 03/12/2024. The Assessee in support of its claim also relied on various judgments, such as, CIT (Exemption) vs. Laxmanarayan Dev Shrishan Seva Khendra [2024] 167 taxmann.com 548 (Guj. HC); and Sahaj Seva Trust vs. ITO (Exemption) [2025] 174 taxmann.com 784 (Pune Trib.).
This Court observes that the Tribunal at Pune in the case of Sahaj Seva Trust (supra) has also dealt with an identical issue, (Shri Pandurang Sansthan Deulgaon Mali) wherein Form 10B was filed belatedly during appellate proceedings and Hon'ble Tribunal allowed the appeal of the Assessee and/or claim lodged u/sec. 11 of the Act, by observing and holding as under:- “1. The captioned appeal at the instance of assessee pertaining to A.Y. 2014-15 is directed against the order dated 17.12.2024 passed by National Faceless Appeal Centre, Delhi arising out of the Assessment order dated 14.01.2021 passed u/s.154 r.w.s.143(1) of the Income-tax Act, 1961 (in short ‘the Act).
The only grievance of the assessee is that the benefit of sections 11 and 12 has been denied to the assessee for non-filing of Form No.10B within the prescribed time limit and that ld.CIT(E) has not considered the Form No.10B filed at the later stage on 02.03.2022 which was filed at the appellate proceedings. It was also submitted that filing of Form No.10B is directory in nature and the same should have been considered by ld.CITA) while deciding the issue.
3. Ld. Departmental Representative supported the orders of the lower authorities.
We have heard both the sides and perused the record placed before us. We note that assessee holds valid registration u/s.12A of the Act vide letter dated 13.03.2022, but has filed Form No.10B belatedly on 02.03.2022 and ld.CIT(A) who has also the co- terminus powers to that of ld. AO did not accepted the audit report filed on Form No.10B and denied the benefits of sections 11 and 12 to the assessee.
We note that the Coordinate bench, Surat in the case of S.M. K.R. Vashi High School Vs. ITO (Exemption) reported in 157 taxmann.com 702 (ITAT, Surat) has held that even if the Form No.10B could not be uploaded due to some technical error on the income-tax portal, benefit of section 11 could not be denied merely on account of delay in furnishing the audit report. Hon’ble High Court in the case of CIT (Exemption) Anjana Foundation reported in 168 taxmann.com 462 (Gujarat) has held that filing of Form No.10B is a procedural requirement and benefit of section 11 should not be denied for delay in furnishing Form No.10B. Hon’ble Court thus affirmed the view taken by the Tribunal in its order dated 07.02.2023 in ITA No.695/Ahd/2023. We therefore following the ratio laid down in the above referred decisions hold that the assessee holding valid registration u/s.12A of the Act has filed Form No.10B belatedly but during the appeal proceedings itself and filing of such report is directory and not mandatory as held by Hon’ble Courts, therefore, benefit of sections 11 and 12 claimed by the (Shri Pandurang Sansthan Deulgaon Mali) assessee in income-tax return deserves to be allowed. Grounds of appeal
raised by the assessee are allowed.
6. In the result, appeal of the assessee is allowed.”
Respectfully following the decision of the Tribunal in the aforesaid case, this Court is inclined to grant relief to the Assessee. Thus, the AO is directed to verify the claim of the Assessee on merit by considering the Form 10B filed as valid.
In the result, Assessee’s appeal is allowed.
Order pronounced in open court on 23.09.2025 as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963.