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Facts
The assessee's appeal challenges the CIT(A)'s order confirming the disallowance of exemption under Section 11 and adjustments made to income. The core issues revolve around the timely filing of Form 10B and an alleged inadvertent mistake in reporting receipts.
Held
The Tribunal held that since Form 10B was available to the Assessing Officer when processing the return, the benefit of Section 11 should be allowed. The Tribunal also directed the Assessing Officer to verify and allow relief for the inadvertent mistake in reporting receipts under Section 11(3).
Key Issues
Whether the disallowance of exemption under Section 11 was justified when Form 10B was filed after the return but before processing? Whether an inadvertent error in reporting receipts should be rectified to allow exemption under Section 11?
Sections Cited
11, 139(4A), 143(1), 11(3), 154, 12
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of learned CIT(A)/National Faceless Appeal Centre, Delhi dated 29.08.2025 for assessment year (AY) 2018-
The assessee has raised following grounds of appeal:
“1. On facts and circumstances of the casc and in law, Ld. CIT(A) erred in confirming the disallowance of exemption t/s 11 of Rs.4.75,250/-, on ignoring the fact that the tax audit report (Form-IOB) had been filed within the time limit prescribed to file the return of income w/s. 139(4A) of the Act.
2. On facts and circumstances of the case and in law, Ld. CII(A) erred in confirming the Intimation u/s 143(1), on making the adjustments t/s 11(3) of Rs.5,55.150/-, though such receipts pertain to voluntary contribution received and applied during the year 3. The appellant hereby makes a fresh claim to allow the exemption us 11 in respect of voluntary contributions received and applied during the year of R3.5,55.150/-, since the appellant had fulfilled all conditions prescribed u/s 11 and 12 of the Act.”
Rival submissions of both the parties have been heard and record perused. The learned Authorized Representative (AR) of the assessee submits that due date for filing the return of income for Assessment Year (AY) 2018-19 was 30.09.2018, the assessee filed its return of income for on 25.07.2018. However, Form 10B was also uploaded on ITBA portal on 31.07.2018. The. The CPC Bangalore while processing return of income not allowed application of income under section 11 of the Act on the ground that Form 10B was uploaded after filing return of income. The assessee filed application under section 154, which was also dismissed in a mechanical manner by taking view that Form-B is required to be furnished with return of income. The action of the Assessing Officer/CPC was upheld by ld. CIT(A). The ld. AR of the assessee further submits that there are series of decisions of Hon’ble High Courts as well as by the various Benches of the Tribunal, wherein it has been held that when Form 10B was available during assessment, benefit of section 11 be allowed to the assessee.
On ground No. 2, the learned AR of the assessee further submits that there was inadvertent mistake while reporting an amount under column 5 of part –E of schedule J, which is normal receipt received from members/ donation which can be verify from books of account, such issue is subject matter of ground no.2.
The assessee made a request before Assessing Officer to allow correction of mistake in the mode of investment. The request of the assessee was not accepted by Assessing Officer by holding that the assessee itself has Rs. 555150/- as its income, thus, there was no mistake apparent. The learned AR further submits that the Assessing Officer may be directed to verify the fact and allow the relief to the assessee on ground No.2 as well. In support of his submissions the ld AR of the assessee relied on the following case laws; Jhaiji Shikshan Samiti Vs DCIT(E) 178 taxmann.com 354 (Raipur), The Bombay St Xavier’s College Society Vs CPC in dated 25/07/2025, Church of Or Lady of Immaculate Vs ITO (E ) in ITA No. 4998/Mum/2025.
On the other hand, the ld. Senior Departmental Representative for the Revenue supported the orders of the lower authorities.
I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I have also deliberated upon various case laws relied upon by the learned AR of the assessee. So far as ground no.1 is concerned, I find that admittedly Form 10B was uploaded before due date of filing of return of income, which was 30.09.2018 for relevant assessment year. Though, the assessee filed return of income before uploading Form 10B, thus, Form 10B was available before Assessing Office when return was processed. I also find that various Benches of the Tribunal has taken a consistent view that when report in Form 10B was available before Assessing Officer at the time of process of return of income, the assessee is eligible for benefit of section 11 of Income Tax act. Thus, ground no.1 of the appeal is allowed.
So far as the ground no.2 is concerned, I find that due to inadvertent amount under column-5 of part E of Schedule-J, income chargeable under section 11(3), the assessee reported receipt as a normal receipt of the assessee trust from the membership fees/donation. Before learned CIT(A), the assessee raised specific ground of appeal and also made specific submission. The ld CIT(A) rejected the submissions of assessee by taking view that section 154 is confined to rectifying a mistake which is apparent. I find that the approach of ld CIT(A) is not correct, when the assessee has specifically requested to allow them to correct inadvertent mistake. Considering the facts that there is inadvertent mistake on the part of assessee in reporting the receipt, hence, the prayer of assessee is accepted and the Assessing Officer is directed to verify the fact and allow the relief to the assessee in accordance with law.
In the result, the appeal of the assessee is allowed. Order was pronounced in the open Court on 02nd December, 2025.