Loading judgment…
Facts
The assessee, Rajdhani Maitri Club Foundation, appealed against the disallowance of its Section 11 exemption claim for AY 2022-23 by the lower authorities. The disallowance was based on the belated filing of the Form 10B audit report after the due date for filing the return of income. The appeal proceeded ex parte as no one represented the assessee during the hearing.
Held
The Tribunal, citing prior judgments, noted that the issue of belated filing of Form 10B for Section 11 exemption is no longer res-integra, allowing such compliance even at the first appellate stage. Consequently, the Tribunal accepted the assessee's grievance in principle and directed the CIT(A)/NFAC to re-adjudicate the appeal on merits, with the assessee responsible for presenting all relevant facts.
Key Issues
Whether belated filing of Form 10B audit report after the due date for return but before first appellate proceedings can be considered for Section 11 exemption, and if disallowance on this ground is correct.
Sections Cited
Section 250, Section 11, Section 139(1), Section 143(1)
AI-generated summary — verify with the full judgment below
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 2022-23 arises against National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/APL/S/250/2023-24/1058355572(1), dated 30.11.2023, in case no. NFAC/2021-22/10245385 in proceedings u/s 250 of the Income-tax Act, 1961 ( in short the “Act”).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex parte.
The assessee pleads the following substantive grounds in the instant appeal:
“On the facts and in the circumstances of the case and in law the ADDL/JCIT(A)-5. Mumbail erred in-
confirming the following actions of DDIT, CPC, Bengaluru - a. determining taxable incorne at Rs. 14,90,811/-against NIL return: b. not allowing exemption claimed u/s 11 of the LT. Act, 1961 on the ground that Audit Report in Form 108 dated 22.09.2022 was filed on 07.11.2022 with the return of income: c. ignoring the Audit Report in Form 108 even though the same was available at the time of passing order u/s 143(1) of the Act; d. taxing the gross receipts of Rs. 14,90,811/- without allowing revenue expenduture Incurred in a sum of Rs. 14,75.974/- on the activities of the Assessee; The above actions being arbitrary, fallacious, unwarranted and illegal must be quashed with directions for appropriate relief.”
Suffice to say, the substantive issue between the parties herein appears to be that of correctness of learned lower authorities’ action in disallowing the assessee section 11 exemption claim on the ground that it had belatedly filed its form 10B audit report dated 22.09.2022 than the due date of filing return u/s 139(1) of the Act. The Revenue’s case is that this tax audit report compliance is a mandatory provision for an assessee who claims section 11 exemption.
We note in this factual backdrop that the instant issue is no more res-integra in light of ACIT v. Xavier Kelvani Mandal Pvt. Ltd. (Gujarat), wherein their lordships have already settled the same at rest in assessee’s favour and against the department that such a compliance could be even made in first appellate CIT(A)/NFAC. I thus accept the assessee’s instant sole substantive grievance in principle and direct the learned CIT(A)/NFAC to re- adjudicate the lower appeal on merits as per law preferably within three effective opportunities subject to a rider that it shall be the taxpayer’s risk and responsibility only to plead and prove all the relevant facts within three effective opportunities in consequential proceedings. Ordered accordingly.
This assessee’s appeal is allowed for statistical purpose in above terms.
Order pronounced in open court on 21.11.2024.