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Facts
A charitable society (assessee) filed its return claiming exemption under Section 11. Initially processed allowing exemption under Section 143(1), the CPC later issued a rectification order under Section 154, denying the exemption due to alleged belated filing of Form 10B. The assessee contended that Form 10B was uploaded within the extended due date, but technical glitches resulted in a delayed e-acknowledgement.
Held
The Additional CIT(A) allowed the assessee's appeal, concluding that Form 10B was uploaded on time and that technical glitches should not lead to penalization. The Tribunal affirmed this decision, finding no justification to deny exemption under Section 11, as the facts were similar to a precedent where belated filing due to technical issues was excused. The Revenue's appeal was therefore dismissed.
Key Issues
Whether exemption under Section 11 can be denied due to alleged belated filing of Form 10B when the delay was caused by technical glitches; Validity of a rectification order under Section 154 denying exemption despite timely upload of Form 10B.
Sections Cited
11, 12A, 80G(5), 139(1), 143(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
ACIT(Exemption) Guru Gobindsingh Circle-2, Ahmedabad Hospital Rogi Kalyan Vs Samiti 1 Pandit Nehru Marg, Jamnagar-361001, Jamnagar, Gujarat PAN: AAATG9920D (Appellant) (Respondent) Revenue Represented: Shri Alpesh Parmar, CIT-DR Assessee Represented: Shri Sagar Shah, A.R. Date of hearing : 24-02-2026 Date of pronouncement : 25-02-2026 आदेश/ORDER PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER
This appeal is filed by the Revenue as against the appellate order dated 14-07-2025 passed by the Additional Commissioner of Income Tax/JCIT(Appeals)-7, Kolkata arising out of the rectification order passed under section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2021-22.
Brief facts of the case is that the assessee is registered charitable Society providing medical relief to General Public with the duly registered u/s. 12A and u/s. 80G(5) of the Act. The assessee filed its Return of Income for the Asst. Year 2021-22 on 10-03-2022 declaring total income of NIL after claiming exemption u/s. 11 of the Act amounting to Rs. 29,96,92,828/-. The return was processed u/s. 143(1) dated 26-08-2022 allowing the exemption u/s. 11 of the Act and refunded Rs.30,38,090/-. Thereafter by suo moto rectification order u/s. 154 of the Act, the Computer Processing Centre, Bengaluru passed rectification order dated 07-03-2023 that Audit Report in Form 10B filed belatedly by the assessee Society, therefore the claim of exemption u/s. 11(1)(d) was denied and the entire income of Rs.29,96,92,828/- was assessed to tax and demanded tax of Rs.12,17,30,930/-.
Aggrieved against the rectification order, the assessee filed an appeal before Addl. CIT(A) and explained that the due date for furnishing Audit Report in Form 10B was extended from 30-09-2021 to 15-02-2022 by the CBDT vide Circular No. 17/2021. The assessee obtained Audit Report in Form 10B on 14-02-2022 and uploaded in the e-filing portal with Acknowledgement No. 257583800250222 dated 14-02-2022. However the e-acknowledgement was generated and received on 25-02- 2022 due to some technical glitches. Therefore requested the Ld. Addl. CIT(A) to grant exemption u/s. 11 of the Act. Ld. Addl. CIT(A) considered the above submissions of the assessee and allowed the appeal filed by the assessee by observing as follows: “5.1 I have carefully gone through the Intimation u/s 143(1), the grounds of appeal and submission made by the appellant in this regard. Briefly stating facts of the case is that the appellant filed return of income which was processed u/s 143(1) by CPC making certain adjustments over and above the returned income. The only issue involved in this case is that the appellant which is a registered charitable society had filed return of income claiming exemption of its income u/s 11 of the I.T. Act. While processing the return u/s 143(1), CPC denied the exemption claimed u/s 11. 5.2 All the grounds of appeal raised by the appellant are against the denial of exemption u/s 11 of the Act. Facts involved in the issue is that the appellant
filed return of income claiming exemption amounting to Rs.2,99,692,828/- as per provisions of Section 11(1). However, as the audit report in Form 10B was not filed within specified date, exemption u/s 11 was denied. Appellant claimed that although the Form 10B was electronically filed within the specified date, it was accepted by the System after such date due to which it was showing as delayed submission. As per the provisions of sec. 12A(1)(b) of the Act, to be eligible for exemption u/s 11, the appellant was required to file audit report in Form 10B on or before one month prior to the due date of filing return of income u/s 139(1). In the present case, the extended due date of filing return was 15.03.2022. The appellant was therefore required to e-file Form 10B on or before 15.02.2024. It is seen from the documents and other evidences submitted by appellant during appellate proceedings that the Form 10B was electronically uploaded in e-filing portal on 14.02.2022 itself. The IP address and the time at which it was uploaded is also showing the date of 14.02.2022. However, due to technical glitches in the system, the form was accepted and acknowledgement generated only on 25.02.2022. Since this date was after the date required to e-file the Form, CPC treated it was delay in filing and therefore disallowed the exemption u/s 11 claimed in return. In this regard, it is to be stated that the appellant has submitted sufficient evidence which suggests that the Form 10B was uploaded in e-filing portal well within the specified date but it is only due to technical glitches that it was accepted by system after due date. For such technical glitches, the appellant should not be penalized. Since the appellant had discharged its duty of uploading the relevant form and therefore satisfied the conditions laid down in section 12A(1)(b), exemption u/s 11 as claimed in return is directed to be allowed. The appeal is therefore allowed.”
Aggrieved against the appellate order, Revenue is in appeal before us raising the following Ground of Appeal: “Whether on the facts and in circumstances of the case, Ld. CIT(A), NFAC is justified in deleting the addition of Rs.29,96,92,828/- and allowing exemption u/s. 11 of the I.T Act as claimed in return.”
5. Heard rival submissions and perused the materials available on record. It is undisputed fact that the assessee uploaded Audit Report in Form 10B within the extended period on 14-02-2022 due to some technical glitches. Though the CPC allowed the claim of exemption u/s. 11 in the 143(1) proceedings dated 26-08-2022 and refunded the tax due to the assessee Society, thereafter invoked suo moto rectification order denying the benefit of exemption on the sole ground that Audit Report in Form 10B filed belatedly.
On identical case, Co-ordinate Bench of this Tribunal in the case of Shankeshwar Parshwanath Jain Swetamber Murti Pujak Aradhna Bhuvan Trust vs. NFAC, Delhi in vide order dated 08-10-2024 held as follows:
“8. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We find that assessing officer (CPC-Bengaluru), has erred in law, as well as on facts, in subsequently, disallowing the exemption claimed under section 11 of the Income tax Act 1961, by passing the rectification order under section 154 of the Act, dated 30.03.2023, on the ground, that no Form 10B was filed by the assessee. However, looking to the facts of the assessee's case, we find that assessee had duly uploaded the Form -10B, on e-filing portal of the Income Tax Department, on 10.01.2022. This fact is evident from the acknowledgement of Form 10B, hence the allegations, made by the assessing officer, in the order under section 154 of the Act, is completely baseless. Based on these facts and circumstances, we delete the addition made by the assessing officer.
In the result, assessee's appeal is allowed.”
6.1. The facts in the present case is also similar to the case decided by Co-ordinate Bench of this Tribunal. Therefore, we do not find any justification in the ground raised by the Revenue and denying claim of exemption u/s. 11 of the Act for late filing of Form 10B. Thus the appellate order passed by Addl. CIT(A) does not require any interference.
In the result, the appeal filed by the Revenue is hereby dismissed.