Loading judgment…
Facts
The assessee, Institute of Actuaries of India, filed its return for AY 2015-16 declaring Nil income, claiming exemption under Section 10(23C)(vi) of the Income Tax Act, 1961. The return was processed by CPC, Bangalore, which disallowed the exemption due to non-filing of the mandatory Audit Report in Form-10B. The CIT(E) set aside the matter to the AO to verify and allow the exemption but rejected the assessee's application for condonation of delay in filing Form-10B.
Held
The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to the assessee pursuing alternative remedies. Regarding exemption under Section 10(23C)(vi), the Tribunal directed the AO to examine the issue afresh. The Tribunal also noted that the issue of condonation of delay for Form-10B is pending before the High Court.
Key Issues
Whether the delay in filing the appeal and the audit report (Form-10B) is to be condoned, and whether the assessee is eligible for exemption under Section 10(23C)(vi).
Sections Cited
10(23C)(vi), 11, 119(2)(b), 143(1), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PAWAN SINGH, JM & SHRI ARUN KHODPIA, AM
: Shri K. Gopal & Shri Om Assessee by Kasndalkar, AR Revenue by : Shri Pitamber Kumar, Sr. DR (Virtually appeared). Date of Hearing 06.01.2026 : Date of Pronouncement : 11.02.2026 O R D E R
Per Arun Khodpia, AM:
This captioned appeal is preferred by the assessee to challenge the order of Ld. Commissioner of Income Tax (Exemption)/ National Faceless Appeal Centre (NFAC), Delhi (in short “Ld. CIT(E)”), dated 23.03.2022, for the Assessment Year (AY) 2015-16, which in turn arises from the intimation / order issued under section 143(1) of the Income Tax Act, 1961 (the Act) by Central processing Centre (CPC), Bangalore dated 30.03.2017. The grounds of appeal raised by the assessee are as under:
“1. The National Faceless Appeal Centre, Delhi (hereinafter referred to as "NFAC") has erred in passing the impugned order dated 23.03.2022 u/s, 250 of the Act without appreciating the facts and circumstances of the present case. Hence, the impugned order passed by the NFAC is arbitrary and unlawful.
The NFAC has grossly erred in passing the impugned order dated 23.03.2022 without adjudicating the ground raised by the Appellant in Form No.35, challenging the actions of the Assessing Officer in not granting exemption u/s. 10(23C)(vi) of the Act in respect of the entire income of the Appellant. Hence, the impugned order passed by the NFAC is bad in law.
The impugned order dated 23.03.2022 passed by the NFAC issuing directions to the Assessing Officer only with respect to claim of exemption u/s. 11 of the Act is unsustainable as the Appellant was granted approval u/s. 10(23C) vide order dated 12.09.2013 and therefore, duly entitled to claim entire income amounting to Rs.14,53,91,502/- as exempt u/s. 10(23C)(vi) of the Act. Hence, the impugned order passed NFAC is erroneous and unlawful.
The NFAC has passed the impugned order dated 23.03.2022 without appreciating that the Appellant had duly e-filed the Audit Report in Form No.10BB within the stipulated time limit under the Act which makes it entitled to claim the exemption u/s. 10(23C)(vi) of the Act. Hence, impugned order passed by the NFAC without allowing the exemption u/s. 10(23C)(vi) of the Act is without any basis and therefore, unlawful.
5. The NFAC has failed to appreciate the fact that the Appellant has duly satisfied the pre-requisite conditions for claiming exemption u/s. 10(23C)(vi) of the Act and therefore, the entire income of the Appellant amounting to Rs. 14,53,91,502/- ought to allowed as exempt u/s. 10(23C)(vi) of the Act.”
Institute of Actuaries of India 2. Condonation of delay: At the very beginning of the hearing, it is brought to our notice that the appeal under consideration is barred by limitation, being delayed by 1258 days. To explain the reasons for delay, the ld. AR of the assessee has furnished before us an application for condonation of delay along with affidavit duly signed by the President of the assessee’s institution. On perusal of the said application and the affidavit, wherein it is clarified that the impugned order was passed by the ld. CIT(A)/NFAC on 23.03.2022 directing the ld. AO to verify and allow the assessee’s claim of exemption. Further, the ld. CIT(A) also directed to accept the filing of Form-10B with delay subject to condonation of delay as per provisions of section 119(2)(b) by the Commissioner of Income Tax (Exemption) (for short “Ld. CIT(E)”). The assessee, thus, had instituted an application on 21.04.2022 and submitted letter on 05.04.2022 requesting the ld. AO to give effect to the order of ld. CIT(A) dated 23.03.2022. Further, an application for condonation of delay in filing of Audit report (10B) was furnished before the jurisdictional CIT(E) on 29.04.2022, which was disposed by rejecting the application of assessee vide order dated 22.04.2025. It is submitted that the assessee was advised by the Tax Practitioner/ Professionals to pursue the matter before the ld. AO and ld. CIT(E), therefore the filing of appeal before the ITAT was delayed and filed after the rejection order u/s 119(2)(b) and further confirmation of total income by the AO in consequential order passed on 19.09.2025. It is submitted that the delay is not because of any mala fide intention, but on account of circumstances 3 Institute of Actuaries of India beyond the control of assessee, the ld. AR placed his reliance on certain judicial pronouncements and requested to condone the delay. On a thoughtful consideration of the aforesaid submissions regarding condonation of delay, we find that there were sufficient causes preventing the assessee to file the appeal before the ITAT within the stipulated time as per law. The assessee was bonafide, while pursuing and trying to find relief through remedies alternatively available to it, therefore the case of assessee found to be substantiated, having sufficient cause qua the delay in filing of appeal, we, therefore, are of the considered view that the delay in present matter deserves to be condoned and we do so.
3. Briefly stated that the assessee is a statutory body set up by the parliament under the Actuaries Act, 2006 for regulation of profession of Actuaries in India. It is registered as Charitable Organization under section 12A of the Act and further claims to be approved under section 10(23C) (vi) of the Act. The assessee had filed its return of income for AY 2015-16 on 29.09.2015 declaring the total income as Nil. The said return was processed on 30.03.2017 by the CPC, Bangalore and while processing the return, the CPC had disallowed application of income and claim of exemption under section 11 of the Act because of non-filing of prerequisite and mandatory Audit Report in Form-10B by the assessee.
Institute of Actuaries of India 4. The assessee, being aggrieved with the aforesaid disallowance by the CPC have carried the matter before the ld. CIT(E), who had appreciated the facts of the case and have set-aside the matter to the file of ld. AO, with the direction to verify and allow the claim of exemption to the assessee. Regarding requirement of Audit Report and filing of Form-10B, it is observed by the ld. CIT(E) that the said Form was filed by the assessee during the appellate proceedings on 22.11.2021. The assessee relied upon the various decisions and requested the ld. CIT(E) to permit the assessee to file Audit report, accept the same and accordingly direct the ld. AO to allow the claim of exemption by the assessee. The ld. CIT(E) after considering the contention of the assessee, had observed that the credence and authenticity of the assessee is beyond question, it is duly registered under the Act. Any technical mistake, therefore, should not deprive it from the benefits, which otherwise it is entitled to, however the assessee was advised to follow procedure under proviso for filing of form 10B, in terms section 119(2)(b) of the Act.
In order to comply, the aforesaid decision of ld. CIT(E) in setting aside the issue to the file of ld. AO and to apply for condonation of delay in terms of provisions of section 119(2)(b) of the Act before the CIT(E), the assessee had furnished an application for condonation of delay in filing of Form-10B under section 119(2)(b) of the Act, however the application of assessee dated 29.04.2022 was disposed of by the ld. CIT(E) vide order dated 22.04.2025 Institute of Actuaries of India wherein the request of assessee for condonation of delay has been rejected, on account of assessee’s failure to substantiate the reasonable cause for which the assessee was prevented to file the Audit report within the stipulated time period.
Before us it is submitted by the ld. AR that against the said order of rejection under section 119(2)(b) of the Act dated 22.04.2025, the assessee has approached with a Writ Petition on 19.11.2025 before the Hon’ble Jurisdictional High Court of Bombay, disposal of the said Writ Petition is awaited.
Further, to challenge the order of ld. CIT(E), the assessee is in appeal before us.
At the outset, it is contended by the ld. AR that the assessee is entitled to claim the exemption under section 11 of the Act. Further, the issue of condonation of delay in filing of the Audit Report in Form 10B, which was requested by the assessee before the ld. CIT(E), is now pending before the Hon’ble High Court, therefore we are functus officio on the issue. Further, since the exemption claimed by the assessee has already directed by the ld. CIT(A) to the ld. AO to verify and allow, therefore no further adjudication is required by this Tribunal. At the most, we may direct the ld. AO to follow the directions of the ld. CIT(A) and as and when the Writ Petition of the assessee would get Institute of Actuaries of India disposed of by the Hon’ble Bombay High Court, a copy of such order shall be furnished before the ld. AO, so as to follow the directions accordingly.
Regarding, assessee’s entitlement for exemption u/s 10(23C) (vi), which the assessee is claiming to be eligible to, having approval vide order dated 12.09.2013 and had filed the Audit Report in the prescribed Form 10BB on 28.09.2025, we direct the AO to examine the same and adjudicate afresh, in accordance with the mandate of law.
Under such facts, circumstances and our observations, the appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 11-02-2026.