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Facts
The assessee, Kaveri Trust, claimed exemption under section 11 for Assessment Year 2020-21. This claim was denied by lower authorities because the assessee failed to file its Form 10B tax audit report within the due date for filing the return under section 139(1). The revenue, however, conceded that the report was indeed filed on 12.07.2022.
Held
The Tribunal held that the requirement to file Form 10B is directory, not mandatory, citing High Court precedents. It observed that such compliance could even be made at the first appellate stage. Consequently, the Tribunal directed the CIT(A)/NFAC to re-adjudicate the assessee's claim on merits, allowing the assessee three opportunities to present all relevant facts.
Key Issues
Whether the claim for exemption under section 11 can be denied solely due to the delayed filing of Form 10B, and whether the requirement to file Form 10B is mandatory or directory.
Sections Cited
Section 11, Section 139(1), Section 143(1), Income-tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for assessment year 2020-21 arises against Commissioner of Income Tax (Appeals) ADDL/JCIT(A) Faridabad’s DIN and order no. ITBA/APL/M/250/2024-25/1066245799(1), dated 29.06.2024, in case no. NFAC/2019-20/10073748, in proceedings u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
It emerges during the course of hearing that both the lower authorities have refused the assessee’s claim of section 11 exemption for the sole reason that it had failed to file/upload its prescribed form 10B tax audit report within the due date of filing section 139(1) return of income.