INCOMETAX OFFICER (EXEMPTIONS), ALAPPUZHA vs. ALLIANCE EDUCATIONAL FOUNDATION, PATHANAMTHITTA

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ITA 847/COCH/2023Status: DisposedITAT Cochin25 September 2024AY 2018-19Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI AMARJIT SINGH (Accountant Member)5 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the filing of the audit report in Form 10B is directory, not mandatory. Considering the extension of the due date for filing returns due to flood conditions, the assessee's filing of Form 10B was deemed to be within the extended period.

What were the facts?

The assessee, an educational foundation, claimed exemption under Section 11. The Assessing Officer denied this exemption because the auditor's report in Form 10B was filed after the due date. The assessee contended that the due date for filing returns was extended due to floods in Kerala.

What were the issues?

Whether the delay in filing Form 10B beyond the original due date, but within an extended period due to natural calamities, invalidates the claim for exemption under Section 11.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH

Hearing: 21.08.2024Pronounced: 25.09.2024

PER SATBEER SINGH GODARA, J.M. : This Revenue’s appeal, for assessment year 2018- 2019, arise against the CIT(A)-National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/1055034038(1), dated 10.08.2023, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”).

1.

2 ITA.No.847/COCH./2023 Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte.

2.

Learned DR vehemently argued and drew our attention to the CIT(A)’s impugned lower appellate discussion reading as under :

“5. I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order. The contentions/submissions of the appellant are being discussed and decided as under :-

Ground No. 1 to 6 These grounds are covered by my finding given with respect to additional ground. Therefore, these grounds were not adjudicated.

Additional ground of Appeal The AO denied the exemption on the ground that auditor's report under Form 108 was not filed along with the return of income within due date

3 ITA.No.847/COCH./2023 According to AO the last date of filing return of income was 31st October, 2018 and the Form 108 was filed on 14-11-2018.

Therefore, the AO held that Form 10B was filed after the due date.

Before me the assessee submitted that the due date of filing return was extended to 28-02-2019 by CBDT for Kerala State due to flood condition, As the last date of filing Income Tax Return and Tax Audit Reports was extended to 28 February 2019. Form 10B filed on 14-11-2018 shall be deemed to have been filed by 31.10.2018 as per CBDT circular dated 27 February, 2019 (File No. 225/15/2019/ITA.II).

Considering the above the AO is directed to allow deduction claimed by assessee under section 11.

This ground of appeal is allowed.

6.

In the result, for statistical purpose the appeal is treated as allowed.”

4 ITA.No.847/COCH./2023 2.1. The Revenue’s contentions in light of these pleadings therefore is that the impugned sec.11 exemption had been rightly disallowed in assessee’s case once it had failed to file it’s audit report/Form-10B within the due date. We note in this factual backdrop that case law CIT vs. Xavier Kelavani Mandal (P. ) Ltd., [2014] 41 taxmann.com 184 (Guj.), has settled the issue in assessee’s favour and against the department to the effect that compliance to the foregoing filing of such sec.10B audit report is a directory one than a mandatory one in nature. We thus see no merit in Revenue’s instant sole substantive grievance. Rejected accordingly.

3.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open Court on 25.09.2024.

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