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Facts
The assessee, a charitable trust, claimed exemption under Section 11 of the Income-tax Act, but the exemption was denied by the CPC because the audit report (Form 10B) was not filed along with the return. The assessee contended that the report was obtained before the return was filed, and the CIT(A) condoned the delay, allowing the exemption.
Held
The Tribunal found no reason to interfere with the CIT(A)'s discretion to condone the delay, especially since the audit report and Form 10B were obtained prior to filing the return. It dismissed the Revenue's appeal, but directed the Assessing Officer to admit the audit report with Form 10B and decide the issue afresh as per law.
Key Issues
Whether the CIT(A) correctly exercised its discretion in condoning the delay in filing Form 10B for claiming exemption under Section 11/12, when the audit report was obtained prior to the return filing.
Sections Cited
Section 11, Section 12, Section 119(2)(b), Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order dated 17.03.2023 pertaining to A.Y. 2016-17.
The substantive grievance of the Revenue reads as under:
Briefly stated, the facts of the case are that the assessee filed its return of income on 16.10.2016 declaring income of Rs. 1,42,302/- after claiming deduction of Rs. 7,63,25,506/- u/s 11 of the Income-tax Act, 1961 [the Act, for short].
Return was revised on 16.10.2017 declaring income as NIL after claiming deduction of Rs. 7,18,83,658/- u/s 11 of the Income-tax Act, 1961 [the Act, for short]. Return was processed by CPC on 25.9.2018 wherein exemption claimed was denied.
The main reason for denying the exemption is that the audit report was not filed alongwith Form No. 10B with the return of income.
The assessee preferred an appeal before the ld. CIT(A) and explained that the audit report and Form 10B was obtained by the assessee much before the filing of return of income and since the audit report has been obtained prior to the filing of the return, the assessee is very much eligible for claiming deduction,
After considering the facts and submissions, the ld. CIT(A) held that the assessee is a registered charitable trust and has been allowed exemption in earlier years. The only reason for denying exemption is delay in filing audit report, but the audit report was obtained much before the filing of return. The ld. CIT(A),accordingly, condoning the delay allowed exemption.
We have given thoughtful consideration of the findings of the ld. CIT(A). The undisputed fact is that the assessee has obtained audit report alongwith Form 10B prior to filing of return of income. In our considered opinion, when an appellate authority is vested with powers to condone delay, discretion of the appellate authority should not be questioned. We, therefore, do not find any reason to interfere with the discretion of the ld. CIT(A). However, modifying the findings, we direct the Assessing Officer to admit the audit report with Form 10B and decide the issue afresh as per provisions of law.
In the result the appeal of the Revenue in is dismissed.
The order is pronounced in the open court on 08.02.2024.