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Facts
The assessee filed its return of income for AY 2017-18 declaring a total income of ₹52,170/- without filing the audit report in Form 10B. Although a defect notice was issued and Form 10B was subsequently filed with a revised return, the Assessing Officer (AO) and the CIT(A) denied exemption under Section 11 of the Act.
Held
The Tribunal held that the initial non-filing of Form 10B was a procedural defect that was cured by the subsequent filing of the form. Therefore, the denial of exemption under Section 11 of the Act on this ground was not sustainable.
Key Issues
Whether denial of exemption u/s 11 of the Act is justified due to belated filing of Form 10B, when the defect was cured before processing.
Sections Cited
11, 143(3)
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IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH , KOLKATA BEFORE SHRI RAJESH KUMAR, AM
ITA No. 3059/KOL/2025 (Assessment Year: 2017-18)
Bhairab Jnananandababa Seva Sangha
29D, Bentick Street, Unit-A.B & C, Kolkata-700001, West Bengal
ITO, Ward 1(2), Exempt 10B, Middleton row, Kolkata-700071, West Bengal
(Appellant) (Respondent)
PAN No. AABTB5138K
Vs.
Assessee by : Shri Ankit Jalan, AR Revenue by : Shri Susanta Saha , DR
> Date of hear ing: 29 .01 .2026 Date of pronouncement: 17 .02 .2026
O R D E R
Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals)-2, Coimbatore (hereinafter referred to as the "Ld. CIT(A)"] dated 19.11.2025 for the AY 2017-18.
- 2. The only issue raised by the assessee is against the order of ld. CIT (A) confirming the order passed by the ld. DCIT (CPC), assessing the total income at ₹509,847/- against the returned income of ₹52,170/ denying the exemption u/s 11 of the Act for the reason that the form 10B of the Act was not filed. - 3. The facts in brief are that the assessee filed the return of income on 29.05.2017, declaring total income at ₹52,170/-, but the assessee did not file the audit report in form no.10B while uploading the return of
income. Accordingly, defect notice was served upon the assessee by CPC, Bangalore, which was complied with by the assessee by filing a corrected return on 30.05.2018, curing the defect in the original return by filing form no.10B along with return. The return was processed on 27.03.2019. However, the ld. AO / CPC, denied the exemption u/s 11 of the Act.
- 4. The order of ld. DCIT/ CPC, was also confirmed by the ld. CIT (A) on the ground that the assessee has not filed form 10B within the due date. - 5. After hearing the rival contentions and perusing the materials available on record, I find that though initially the assessee has filed the return of income on 29.05.2017, without upholding the audit report in form 10B. I note that in this case, the form 10B was filed on 30.05.2018, along with the revised return and thereafter, processing was done by CPC Bangalore. Therefore, the form 10B was available before the ld. AO at the time of processing the return of income . The non filing of Form 10B at the time of filing original return income is a procedural defect in filing the return which was cured by the assessee later on. In our considered view that the ld. AO cannot deny the exemption claimed by the assessee u/s 11 of the Act on the ground that form 10B was not filed with the return of income originally. Therefore, the order passed by the ld. CIT (A) confirming the order of ld. AO/ CPC cannot be sustained. The issue is supported by the decision of Saraswati Devi Educational and Social Trust, Vs. CPC, Bangalore, in ITA Nos. 873 & 874/KOL/2025, vide order dated 04.011.2025, the operative part of the decisions is as under:-
<sup>&</sup>quot;4. After hearing the rival contentions and perusing the material available on record, we find that the assessee has filed its return of income on 27.03.2021 for A.Y.2020-2021
and on 31.10.2023 for A.Y.2023-2024. The Form 10B and Form 10BB had been filed along with returns of income for the said assessment years under consideration on 27.03.2021 & 31.10.2023, respectively. The due date for furnishing Form 10B/10BB for the assessment year 2020-2021 & 2023-2024 was prior to one month before the due date for furnishing return u/s.139(1) of the Act. The intimations/orders u/s.143(1) of the Act had been issued for A.Y. on 24.12.2021 and for AY 2023-2024 on 04.12.2024. The CPC had denied the assessee the benefit of exemption u/s.11 & 10(23C) of the Act on the ground that the audit report in Form 10B/10BB had been filed belatedly. The ld CIT(A) dismissed the appeals of the assessee by observing that the in order claim exemption u/s 11 & 12 of the Act certain conditions are required to be satisfied which were not fulfilled by the assessee. It is noticed that the audit report was very much available with the Assessing Officer when the returns of income were processed and this is only a technical/procedural breach. The coordinate bench of the Tribunal has been holding that such technical lapse cannot lead to denial of exemption u/s.11 & 12 of the Act that too in the intimation u/s.143(1) of the Act. This view is also supported by the decision of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust, reported in [2021] 125 taxmann.com 75 (Gujarat), wherein the Hon'ble High Court has held that exemption u/s.11 of the Act cannot be denied for delayed filing of Form 10B. It has also been held by the Hon'ble High Court that as the assessee is a charitable trust who satisfies the conditions for availing the benefit of exemption, the assessee could not be denied exemption merely on the ground that Form 10B was filed belatedly especially when legislature had conferred wide discretionary powers to condone such delay on authorities concerned. Consequently, respectfully following the decision of the Hon'ble Gujarat High Court, the intimations issued u./s.143(1) of the Act by the Assessing Officer and confirmed by the ld. CIT(A) denying the benefit of Section 11 & 12 of the Act for A.Y.2020-2021 on account of delay in filing Form 10B and denying the benefit of Sections 11 or 10(23C) of the Act on account of belated filing of Form 10BB for A.Y. 2023-2024, are hereby quashed.
- 5. In the result, both appeals of the assessee are allowed" - 6. Consequently, I set aside the order of ld. CIT (A) and direct the ld. AO to allow the exemption u/s 11 of the Act. - 7. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 17.02.2026.
Sd/- (RAJESH KUMAR) (ACCOUNTANT MEMBER)
Kolkata, Dated: 17.02.2026
Sudip Sarkar, Sr.PS
Copy of the Order forwarded to:
- 1. The Appellant - 2. The Respondent - 3. CIT - 4. DR, ITAT, - 5. Guard file.
BY ORDER,
True Copy//
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata