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Facts
The assessee, a charitable institution registered under section 12A, filed its return for AY 2015-16 declaring 'Nil' income. The Assessing Officer (AO) disallowed write-offs of old balances, old assets, and investment loss amounting to Rs. 30,63,405/-, treating it as a claim of setting off incurred losses. The AO also denied exemption under section 11(2) because Form 10 regarding accumulation was filed belatedly.
Held
The Tribunal noted that the delay in filing Form 10 was a procedural lapse, and the audit report was available before the AO and CIT(A) during assessment and appellate proceedings, respectively. Citing various judicial precedents, the Tribunal held that exemption under Section 11 should not be denied solely due to the delayed filing of the audit report, as it is a procedural requirement.
Key Issues
Whether the assessee can be denied exemption under Section 11(2) for delayed filing of Form 10, despite the audit report being submitted before the assessment/appeal proceedings?
Sections Cited
11(1)(a), 11(2), 12A, 139(1), 44AB
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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 22.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds:
The Ld. AO and Ld CIT (A) has erred in law and in facts in making impugned addition Rs. 30,63,405/-by not appreciating that in facts are all application of income of the Trust: The details of impugned additions are as under:- Sr. No. Particulars Amount Rs. 1. 1 Old balances and advances w/off 3,50,499 2. 2 Old assets w/off 26,80,906
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3 Investments w/off 3 Investments w/off 32,000 32,000 30,63,40 30,63,40
2. The Ld. AO and Ld. CIT (A) erred in appreciating that the form 10 for AY 2. The Ld. AO and Ld. CIT (A) erred in appreciating that the form 10 for AY 2. The Ld. AO and Ld. CIT (A) erred in appreciating that the form 10 for AY 2015-16 was indeed filed voluntarily by the assesee before the completion 16 was indeed filed voluntarily by the assesee before the completion 16 was indeed filed voluntarily by the assesee before the completion of the assessment for AY 20L5 the assessment for AY 20L5-16. The LD. AO failed to follow binding 16. The LD. AO failed to follow binding precedents. The Ld. AO did not ask any question/ did not seek any details/ precedents. The Ld. AO did not ask any question/ did not seek any details/ precedents. The Ld. AO did not ask any question/ did not seek any details/ did not send any notice before non consideration of accumulation 85% did not send any notice before non consideration of accumulation 85% did not send any notice before non consideration of accumulation 85% accumulation u/s. 11(1)(a) on Gross Receipts. accumulation u/s. 11(1)(a) on 3. 3. The Ld. AO and Ld CIT(A) erred in granting accumulation u/s. 11(1)(a) 3. The Ld. AO and Ld CIT(A) erred in granting accumulation u/s. 11(1)(a) 3. The Ld. AO and Ld CIT(A) erred in granting accumulation u/s. 11(1)(a) short by Rs.2885498/-. short by Rs.2885498/ 4. 4. The Ld. AO did not ask any question/ did not seek any details/ did not 4. The Ld. AO did not ask any question/ did not seek any details/ did not 4. The Ld. AO did not ask any question/ did not seek any details/ did not send any notice seeking details and without appreciating the facts made send any notice seeking details and without appreciating the facts made send any notice seeking details and without appreciating the facts made impugned additions as mentioned in para 1 herein. itions as mentioned in para 1 herein. 5. 5. The Ld. AO did not inform any defect in form no. 10 ( for accumulation) 5. The Ld. AO did not inform any defect in form no. 10 ( for accumulation) 5. The Ld. AO did not inform any defect in form no. 10 ( for accumulation) and also did not inform for any late filing of form no.10 and without any and also did not inform for any late filing of form no.10 and without any and also did not inform for any late filing of form no.10 and without any show cause denied accumulation. show cause denied accumulation. 6. 6. LD CIT (A) failed to appreciate th 6. LD CIT (A) failed to appreciate that the late filing of form No.10 was duly at the late filing of form No.10 was duly allowed by CBDT circular and judicial precedents allowed by CBDT circular and judicial precedents 7. 7. Ld. CIT (A) did not consider the contentions of the assesse on application 7. Ld. CIT (A) did not consider the contentions of the assesse on application 7. Ld. CIT (A) did not consider the contentions of the assesse on application of Income. 2. Briefly stated facts of the case are that the assessee is Briefly stated facts of the case are that the assessee is Briefly stated facts of the case are that the assessee is registered as a charitable institution with the Director of Income charitable institution with the Director of Income charitable institution with the Director of Income-tax (Exemption), Mumbai u/s 12A of the Income (Exemption), Mumbai u/s 12A of the Income-tax Act, 1961 (in short tax Act, 1961 (in short ‘the Act’) vide Registration dated 19.08.1980. The Trust filed its ‘the Act’) vide Registration dated 19.08.1980. The Trust filed its ‘the Act’) vide Registration dated 19.08.1980. The Trust filed its return of income for the year under consideration declaring income return of income for the year under consideration declaring income return of income for the year under consideration declaring income at Rs. Nil. The return of income filed by the assessee was selected at Rs. Nil. The return of income filed by the assessee was selected at Rs. Nil. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices for scrutiny assessment and statutory notices were were issued and complied with. The Assessing Officer observed that assessee complied with. The Assessing Officer observed that assessee complied with. The Assessing Officer observed that assessee claimed old balance written off amounting to Rs.3,59,499/- , old claimed old balance written off amounting to Rs.3,59,499/ claimed old balance written off amounting to Rs.3,59,499/ assets write off of Rs.26,80,906/ Rs.26,80,906/- and loss of investment of and loss of investment of rs. 32,000/-, totaling to , totaling to Rs.30,63,405/-, towards application of towards application of fund. The Assessing Officer disallowed the same as this was nothing but The Assessing Officer disallowed the same as this was nothing but The Assessing Officer disallowed the same as this was nothing but claim of setting off of of loss incurred. Further, the Assessi loss incurred. Further, the Assessing Officer
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noted that the Form No. 10 was filed on noted that the Form No. 10 was filed on 28/07/2017 28/07/2017 by the assessee showing accumulation of Rs.1,02,55,516/-, which was assessee showing accumulation of Rs.1,02,55,516/ assessee showing accumulation of Rs.1,02,55,516/ belated , thus not accepatbale belated , thus not accepatbale and therefore, the exemption claimed and therefore, the exemption claimed u/s 11(2) of the Act was denied to the assessee and total income u/s 11(2) of the Act was denied to the assessee and total u/s 11(2) of the Act was denied to the assessee and total was assessed at Rs.59,48,903/ was assessed at Rs.59,48,903/-.
On further appeal, the Ld. CIT(A) dismissed the grounds raised On further appeal, the Ld. CIT(A) dismissed the grounds raised On further appeal, the Ld. CIT(A) dismissed the grounds raised by the assessee observing as under: by the assessee observing as under:
“4.1.1 There is no further discussion on the findings by the A.O. in his order. 4.1.1 There is no further discussion on the findings by the A.O. in his order. 4.1.1 There is no further discussion on the findings by the A.O. in his order. However appellant has made details However appellant has made details submission in the appeal procedures. The submission in the appeal procedures. The appellant also relied upon few cases were in support his arguments. I have appellant also relied upon few cases were in support his arguments. I have appellant also relied upon few cases were in support his arguments. I have gone through the case laws relied upon by the appellant and noticed that these gone through the case laws relied upon by the appellant and noticed that these gone through the case laws relied upon by the appellant and noticed that these are pertaining to denial on the exemption on the basis of la are pertaining to denial on the exemption on the basis of late filing on form No. te filing on form No. 10. In the present case the form No. 10 was file late which is an admitted fact. 10. In the present case the form No. 10 was file late which is an admitted fact. 10. In the present case the form No. 10 was file late which is an admitted fact. Similarly in the relied upon cases the Hon'ble Judicial Authorities have given Similarly in the relied upon cases the Hon'ble Judicial Authorities have given Similarly in the relied upon cases the Hon'ble Judicial Authorities have given relief on this ground but the appellant failed to mention that whether these relief on this ground but the appellant failed to mention that whether the relief on this ground but the appellant failed to mention that whether the decisions by the department or not. decisions by the department or not. Similarly the Ld. A.O. not only relied upon Similarly the Ld. A.O. not only relied upon the late filing issue but he mention that Form No. 10 was defective. It is the late filing issue but he mention that Form No. 10 was defective. It is the late filing issue but he mention that Form No. 10 was defective. It is pertinent to mention here that the appellant has not made any specific ground pertinent to mention here that the appellant has not made any specific ground pertinent to mention here that the appellant has not made any specific ground on the issue of form No. 10. In the grounds of appeal the issue is related to the No. 10. In the grounds of appeal the issue is related to the No. 10. In the grounds of appeal the issue is related to the amount of Rs. 30,63,405/ amount of Rs. 30,63,405/- but in his submissions he has raised the issue of but in his submissions he has raised the issue of Form No. 10. In the absence of specific grounds and submissions, the Form No. 10. In the absence of specific grounds and submissions, the Form No. 10. In the absence of specific grounds and submissions, the contention of the appellant cannot be accepted. H contention of the appellant cannot be accepted. Hence this ground of appeal is ence this ground of appeal is dismissed. Due to disallowance of this amount, the short accumulation was dismissed. Due to disallowance of this amount, the short accumulation was dismissed. Due to disallowance of this amount, the short accumulation was allowed. 4.2 Ground of Appeal No. 2 is pertain the opportunity not grant as alleged by Ground of Appeal No. 2 is pertain the opportunity not grant as alleged by Ground of Appeal No. 2 is pertain the opportunity not grant as alleged by the appellant. It is true that the Ld. A.O. has not discussed the the appellant. It is true that the Ld. A.O. has not discussed the explanations of explanations of the assessee in this order, but in appellate proceeding in submission has been the assessee in this order, but in appellate proceeding in submission has been the assessee in this order, but in appellate proceeding in submission has been considered decided accordingly. Hence, the ground of appeal filed by the considered decided accordingly. Hence, the ground of appeal filed by the considered decided accordingly. Hence, the ground of appeal filed by the appellant is dismissed. appellant is dismissed.” 4. We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the Ld. CIT(A) has duly noted that assessee had filed details the Ld. CIT(A) has duly noted that assessee had filed details the Ld. CIT(A) has duly noted that assessee had filed details submission along with case laws relied upon. However, the Ld. submission along with case laws relied upon. However, the Ld. submission along with case laws relied upon. However, the Ld. CIT(A) has merely dismissed the appeal on the ground of delay in CIT(A) has merely dismissed the appeal on the ground CIT(A) has merely dismissed the appeal on the ground
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filing of the Form No. 10. The filing of Form No. 10 was only a filing of the Form No. 10. The filing of Form No. 10 was only a filing of the Form No. 10. The filing of Form No. 10 was only a technical requirement. The e irement. The e-filing of form no. 10 has been made filing of form no. 10 has been made effective form AY 2016 form AY 2016-17 and for any condonation of delay in any condonation of delay in uploading or efiling the form No. 10 uploading or efiling the form No. 10 the authority has been giv has been given to the Commissioner of Income the Commissioner of Income-tax Exemption, But the case of the tax Exemption, But the case of the assessee pertains to period prior to AY 2016 assessee pertains to period prior to AY 2016-17. 17. We find that Coordinate Bench of Tribunal Jaipur in the case of Deputy Coordinate Bench of Tribunal Jaipur in the case of Coordinate Bench of Tribunal Jaipur in the case of Commissioner of Income Commissioner of Income-tax (Exemption) Vs State Institute of tax (Exemption) Vs State Institute of Health & Family Welfare reported in [2023] 153 taxmann.com & Family Welfare reported in [2023] 153 taxmann.com & Family Welfare reported in [2023] 153 taxmann.com 740 (Jaipur - Trib.)/[2023] 202 ITD 480 (Jaipur Trib.)/[2023] 202 ITD 480 (Jaipur - Trib.)[12-07- Trib.)/[2023] 202 ITD 480 (Jaipur 2023 AY 2014-15 held that held that where assessee, a charitable trust, where assessee, a charitable trust, registered under section 12A, filed registered under section 12A, filed its return of income within time its return of income within time prescribed, however, filed audit report in Form 10B prescribed, however, filed audit report in Form 10B at a later stage during assessment proceedings, benefit of exemption under section11 during assessment proceedings, benefit of exemption under section11 during assessment proceedings, benefit of exemption under section11 could not be denied merely on account of delay in furnishing audit could not be denied merely on account of delay in furnishing audit could not be denied merely on account of delay in furnishing audit report. The relevant finding of the Tribunal is repr The relevant finding of the Tribunal is reproduced as under oduced as under:
“2.4 We have heard both the parties and perused the materials available on 2.4 We have heard both the parties and perused the materials available on 2.4 We have heard both the parties and perused the materials available on record. In this case, the ld. CIT(A) has narrated about the two issues i.e. Issue record. In this case, the ld. CIT(A) has narrated about the two issues i.e. Issue record. In this case, the ld. CIT(A) has narrated about the two issues i.e. Issue No. 1 which pertains to delay in filing Form 10/10B and Issue No. 2 which No. 1 which pertains to delay in filing Form 10/10B and Issue No. 2 which No. 1 which pertains to delay in filing Form 10/10B and Issue No. 2 which pertains to non-indicating specific purpose/ purpose for which the fund was indicating specific purpose/ purpose for which the fund was indicating specific purpose/ purpose for which the fund was accumulated. As regards the issue of delay in filing Form 10/10B, it is noted accumulated. As regards the issue of delay in filing Form 10/10B, it is noted accumulated. As regards the issue of delay in filing Form 10/10B, it is noted that the assessee filed its return of income on 28.11.2014 which is within the that the assessee filed its return of income on 28.11.2014 which is within the that the assessee filed its return of income on 28.11.2014 which is within the due date as per section 139(1) due date as per section 139(1) i.e. 30.11.2014. However, the audit report as i.e. 30.11.2014. However, the audit report as Form 10 was submitted by the assessee on 20.09.2016 i.e. during the Form 10 was submitted by the assessee on 20.09.2016 i.e. during the Form 10 was submitted by the assessee on 20.09.2016 i.e. during the assessment proceedings. As a result, the assessing officer did not accept the assessment proceedings. As a result, the assessing officer did not accept the assessment proceedings. As a result, the assessing officer did not accept the Form 10 and disallowed the deduction for the amount accumulated under Form 10 and disallowed the deduction for the amount accumulated Form 10 and disallowed the deduction for the amount accumulated provisions of section 11 of the Income Tax Act, 1961. In order to claim provisions of section 11 of the Income Tax Act, 1961. In order to claim provisions of section 11 of the Income Tax Act, 1961. In order to claim exemptions u/s 11 and 12 of the Act, the conditions mentioned u/s 12A of the exemptions u/s 11 and 12 of the Act, the conditions mentioned u/s 12A of the exemptions u/s 11 and 12 of the Act, the conditions mentioned u/s 12A of the Act are to be fulfilled for which relevant part of the section 12A is reproduced Act are to be fulfilled for which relevant part of the section 12A is reproduced Act are to be fulfilled for which relevant part of the section 12A is reproduced hereunder.
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12A [(1)] The provisions of section 11 and section 12 shall not apply in The provisions of section 11 and section 12 shall not apply in The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following relation to the income of any trust or institution unless the following relation to the income of any trust or institution unless the following conditions are fulfilled, namely conditions are fulfilled, namely …… (b) where the total income of the trust or institution as computed under (b) where the total income of the trust or institution as computed under (b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section 11 and section without giving effect to the provisions of section 11 and section without giving effect to the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income 12 exceeds the maximum amount which is not chargeable to income 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year), the accounts of the trust or institution for that in any previous year), the accounts of the trust or institution for that in any previous year), the accounts of the trust or institution for that year have been audited by an accountant as defin year have been audited by an accountant as defined in the Explanation ed in the Explanation below sub-section (2) of section 288 (before the specified date referred to section (2) of section 288 (before the specified date referred to section (2) of section 288 (before the specified date referred to in section 44AB and the person in receipt of in section 44AB and the person in receipt of the income furnishes by the income furnishes by that date] the report of such audit in the prescribed form57 duly signed that date] the report of such audit in the prescribed form57 duly signed that date] the report of such audit in the prescribed form57 duly signed and verified by and verified by such accountant and setting forth such particulars as such accountant and setting forth such particulars as may be prescribed.)…..’’ may be prescribed.)…..’’ It is also note worthy to mention that as per section 12A of the Act, the It is also note worthy to mention that as per section 12A of the Act, the It is also note worthy to mention that as per section 12A of the Act, the assessee had to file Form 10B to avail the benefits of exemption u/s 11 assessee had to file Form 10B to avail the benefits of exemption u/s 11 assessee had to file Form 10B to avail the benefits of exemption u/s 11 & 12 before the specified date & 12 before the specified date as per Section 44AB of the Act. The as per Section 44AB of the Act. The specified date to file Form 10B is mentioned in explanation (ii) of section specified date to file Form 10B is mentioned in explanation (ii) of section specified date to file Form 10B is mentioned in explanation (ii) of section 44AB which is as under: 44AB which is as under: [ii. "specified date" in relation to the accounts of the assessee of the [ii. "specified date" in relation to the accounts of the assessee of the [ii. "specified date" in relation to the accounts of the assessee of the previous year relevant to an assessment year, previous year relevant to an assessment year, means [date one month means [date one month prior to][ the due date for furnishing the return of income under sub prior to][ the due date for furnishing the return of income under sub prior to][ the due date for furnishing the return of income under sub- section (1) of section 139]]]’’ section (1) of section 139]]]’’ The question of delayed filing of audit report, after the return of income The question of delayed filing of audit report, after the return of income The question of delayed filing of audit report, after the return of income has been filed, has been scrutinized by various courts has been filed, has been scrutinized by various courts of law and it has of law and it has generally been held that if the assessee submits the audit report before generally been held that if the assessee submits the audit report before generally been held that if the assessee submits the audit report before the assessing officer during the assessment proceedings, the assessee the assessing officer during the assessment proceedings, the assessee the assessing officer during the assessment proceedings, the assessee should not be denied the benefit of claiming exemption under section 11 should not be denied the benefit of claiming exemption under section 11 should not be denied the benefit of claiming exemption under section 11 and 12 of the Act. Some and 12 of the Act. Some of the case laws are mentioned as under. of the case laws are mentioned as under. (i) In the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie (i) In the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie (i) In the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust (1992) 195 ITR 825, the Calcutta High Court has affirmed that the Trust (1992) 195 ITR 825, the Calcutta High Court has affirmed that the Trust (1992) 195 ITR 825, the Calcutta High Court has affirmed that the requirement of filing the audit report with the return is merely a requirement of filing the audit report with the return is merely a requirement of filing the audit report with the return is merely a procedural requirement, and that exemption can procedural requirement, and that exemption cannot be denied so long not be denied so long as the report is available to the assessing officer before the completion as the report is available to the assessing officer before the completion as the report is available to the assessing officer before the completion of assessment (ii) In the case of Calcutta Management Association vs. ITO (1992) 42 (ii) In the case of Calcutta Management Association vs. ITO (1992) 42 (ii) In the case of Calcutta Management Association vs. ITO (1992) 42 ITD 62 the Calcutta bench of the Tribunal held that the Audit Report can ITD 62 the Calcutta bench of the Tribunal held that the Audit Report can ITD 62 the Calcutta bench of the Tribunal held that the Audit Report can even be filed at the time of appeal before the Commissioner (Appeals). n be filed at the time of appeal before the Commissioner (Appeals). n be filed at the time of appeal before the Commissioner (Appeals). (iii) On a similar issue the Hon'ble Supreme Court in the case of CIT vs. (iii) On a similar issue the Hon'ble Supreme Court in the case of CIT vs. (iii) On a similar issue the Hon'ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) held Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) held Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) held "It is abundantly clear from the wordings of sub "It is abundantly clear from the wordings of sub-section (2) of section 11 section (2) of section 11 that it is mandatory for the person claiming the benefit of section 11 to that it is mandatory for the person claiming the benefit of section 11 to that it is mandatory for the person claiming the benefit of section 11 to intimate to the assessing authority the particulars required, under rule intimate to the assessing authority the particulars required, under rule intimate to the assessing authority the particulars required, under rule
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17 in Form No. 10. If during the assessment proceedings the Assessing 17 in Form No. 10. If during the assessment proceedings the Assessing 17 in Form No. 10. If during the assessment proceedings the Assessing Officer does not have the necessary information, the question of not have the necessary information, the question of not have the necessary information, the question of excluding such income from assessment does not arise at all. As a excluding such income from assessment does not arise at all. As a excluding such income from assessment does not arise at all. As a matter of fact, the benefit of excluding this particular part of the income matter of fact, the benefit of excluding this particular part of the income matter of fact, the benefit of excluding this particular part of the income from the net of taxation arises from section 11 and is subjec from the net of taxation arises from section 11 and is subjec from the net of taxation arises from section 11 and is subjected to the conditions specified therein. Therefore, it is necessary that the conditions specified therein. Therefore, it is necessary that the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time it completes assessing authority must have this information at the time it completes assessing authority must have this information at the time it completes the assessment in the absence of any such information, it will not be the assessment in the absence of any such information, it will not be the assessment in the absence of any such information, it will not be possible for the assessing authority possible for the assessing authority to give the assessor the benefit of to give the assessor the benefit of such exclusion and once the assessment is so completed, it would be such exclusion and once the assessment is so completed, it would be such exclusion and once the assessment is so completed, it would be futile to find fault with the assessing authority for having included such futile to find fault with the assessing authority for having included such futile to find fault with the assessing authority for having included such income in the assessable income of the assessee. Therefore, even income in the assessable income of the assessee. Therefore, even income in the assessable income of the assessee. Therefore, even assuming that there is no valid imitation prescribed under the Act and t there is no valid imitation prescribed under the Act and t there is no valid imitation prescribed under the Act and the Rules, even then it is reasonable to presume that the intimation the Rules, even then it is reasonable to presume that the intimation the Rules, even then it is reasonable to presume that the intimation required under section 11 has to be furnished before the assessing required under section 11 has to be furnished before the assessing required under section 11 has to be furnished before the assessing authority authority authority completes completes completes the the the concerned concerned concerned assessment assessment assessment because because because such such such requirement is mandatory and without the particulars of the income, the uirement is mandatory and without the particulars of the income, the uirement is mandatory and without the particulars of the income, the assessing authority cannot entertain the claim of the assessee under assessing authority cannot entertain the claim of the assessee under assessing authority cannot entertain the claim of the assessee under section 11. Therefore, compliance of the requirement of the Act will have section 11. Therefore, compliance of the requirement of the Act will have section 11. Therefore, compliance of the requirement of the Act will have to be any time before the assessment proceed to be any time before the assessment proceedings." It is also noted in the instant case that the assessee submitted the Form It is also noted in the instant case that the assessee submitted the Form It is also noted in the instant case that the assessee submitted the Form 10 dated 28.11. 2014 during the assessment proceedings on 10 dated 28.11. 2014 during the assessment proceedings on 10 dated 28.11. 2014 during the assessment proceedings on 20.09.2016 and the same is also confirmed by the assessing officer in 20.09.2016 and the same is also confirmed by the assessing officer in 20.09.2016 and the same is also confirmed by the assessing officer in the assessment order. The audit report was the assessment order. The audit report was also available before the available before the assessing officer during the assessment proceedings as well as before assessing officer during the assessment proceedings as well as before assessing officer during the assessment proceedings as well as before the CIT(A) during the appellate proceedings. As per the case laws the CIT(A) during the appellate proceedings. As per the case laws the CIT(A) during the appellate proceedings. As per the case laws mentioned above, the Hon'ble Courts took the view that the benefit of mentioned above, the Hon'ble Courts took the view that the benefit of mentioned above, the Hon'ble Courts took the view that the benefit of exemption should not be deni exemption should not be denied merely on account of delay in ed merely on account of delay in furnishing the audit report and it is permissible for the assessee to furnishing the audit report and it is permissible for the assessee to furnishing the audit report and it is permissible for the assessee to produce the audit report at a later stage, either before the AO or the produce the audit report at a later stage, either before the AO or the produce the audit report at a later stage, either before the AO or the appellate authority. This view has been reiterated by the Hon'ble Court appellate authority. This view has been reiterated by the Hon'ble Court appellate authority. This view has been reiterated by the Hon'ble Court in the recent judgement of Hon'ble Gujarat High Court in the case of ent judgement of Hon'ble Gujarat High Court in the case of ent judgement of Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust v. Income Tax Officer. (Exemption) [2021] Sarvodaya Charitable Trust v. Income Tax Officer. (Exemption) [2021] Sarvodaya Charitable Trust v. Income Tax Officer. (Exemption) [2021] 125 taxmann.com 75 (Gujarat). It is further noted that the ld. CIT(A) in 125 taxmann.com 75 (Gujarat). It is further noted that the ld. CIT(A) in 125 taxmann.com 75 (Gujarat). It is further noted that the ld. CIT(A) in view of the above discussions held that the AO erred in view of the above discussions held that the AO erred in not allowing not allowing deduction to the /assessee for the amount accumulated under the deduction to the /assessee for the amount accumulated under the deduction to the /assessee for the amount accumulated under the provisions of section 11 of the Income Tax Act, 1961. The ld. CIT(A) provisions of section 11 of the Income Tax Act, 1961. The ld. CIT(A) provisions of section 11 of the Income Tax Act, 1961. The ld. CIT(A) further observed that it was merely a procedural lapse on part of further observed that it was merely a procedural lapse on part of further observed that it was merely a procedural lapse on part of assessee to not file Form 10 alongwith retu assessee to not file Form 10 alongwith return of income. The ld. CIT(A) rn of income. The ld. CIT(A) thus observed that the assessee submitted the audit report at a later thus observed that the assessee submitted the audit report at a later thus observed that the assessee submitted the audit report at a later stage after filing the return of income and thus the benefit of exemption stage after filing the return of income and thus the benefit of exemption stage after filing the return of income and thus the benefit of exemption under section 11 of the Act cannot be denied merely on account of delay under section 11 of the Act cannot be denied merely on account of delay under section 11 of the Act cannot be denied merely on account of delay in furnishing audit report. We found that the observation of the ld. ng audit report. We found that the observation of the ld. ng audit report. We found that the observation of the ld. CIT(A) does not suffer from any infirmity and we find no reason to CIT(A) does not suffer from any infirmity and we find no reason to CIT(A) does not suffer from any infirmity and we find no reason to interfere in the order of the ld. CIT(A). interfere in the order of the ld. CIT(A). …………………………………………………………………………………………” …………………………………………………………………………………………” …………………………………………………………………………………………”
ACIL Navasar Jan Rural Development Foundation ACIL Navasar Jan Rural Development Foundation 7 ITA No. 3743/M/2023
4.1 Since, the assessee has been deprived of Since, the assessee has been deprived of benefit benefit of application of fund for charitable purpose of fund for charitable purpose under section 11(2) of the Act only for under section 11(2) of the Act only for the reason of delay in submitting the Form 10 of Income-tax Rules, the reason of delay in submitting the Form 10 of Income the reason of delay in submitting the Form 10 of Income therefore, we feel if appropriate to therefore, we feel if appropriate to condone the delay in filing of condone the delay in filing of form no 10 and restore this appeal restore this appeal back to the Ld. CIT(A) back to the Ld. CIT(A) for considering the claim of application of fund towards write off etc in considering the claim of application of fund towards write off etc in considering the claim of application of fund towards write off etc in accordance with law and pass accordance with law and pass a speaking order. It is need eaking order. It is needless to mention that sufficient opportunity of being heard sufficient opportunity of being heard shall be provided shall be provided to the assessee. The gr The grounds raised by the assessee are accordingly ounds raised by the assessee are accordingly allowed for statistical purposes. allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on nounced in the open Court on 01/03/2024. /2024. Sd/ Sd/- Sd/ Sd/- (KAVITHA RAJAGOPAL KAVITHA RAJAGOPAL) (OM PRAKASH OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 01/03/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai