SHRI MODH PATNI GHANCHI GNATI PUNCH TRUST,SURAT vs. INCOME TAX OFFICER, WARD-2(3)(6), SURAT

The grounds of appeal

1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of Dy.CIT, (CPC) while issuing intimation order u/s 154 of the Act in determining total income of assessee at Rs.16,21,600/- by disallowing sum of Rs.15,44,820/- claimed as application of income & Rs.76,775/- claimed as accumulation of income u/s 11(1)(a) of the I.T. Act, 1961 on the ground that audit report in Form 10B was not filed.

It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted.

Assessee craves leave to add, alter or delete any ground(s) either before or in the curse of hearing of the appeal.”

Alternatively, the Ld. DR for the Revenue, also argued that matter may be remitted back to the file of CIT(Exemption) to condone the delay in filing Form No.-10B and the Tribunal should not condone the delay, as the Ld.CIT(Exemption) has necessary power to condone the delay in filing audit report, hence matter may be remitted back to the file of Ld.CIT(Exemption) to condone the delay.

In rejoinder, the Ld. Counsel submitted that audit report in Form-10B, was of course, available with the assessee but it could not be filed before the lower authorities, due to the circumstances beyond its control. The Ld. Counsel also submitted that the audit report is dated 07.10.2016, which is prior to framing the assessment order / intimation by the CPC / Assessing Officer, dated 29.08.2018. Therefore, the audit report was available with the assessee but assessee could not file it due to mistake committed by his CA/Advocate, as the assessee`s CA/Advocate did not complete his assignment given to him. The ld Counsel submitted that Tribunal has power to condone the delay therefore matter should not be remitted back to the file of the ld CIT(E ) for condonation of delay. The Ld. Counsel then explained the reasons of delay stating that assessee-trust has already filed the Income and Expenditure Account and Balance Sheet as on 31.03.2016 before

We have heard both sides in detail and also perused the records of the case including the paper book filed by the assessee-trust. Before us Ld. Counsel for the assessee submitted following documents and evidences, viz: (i) Acknowledgement of return of income along with computation of total income for A.Y 16-17 ( vide pg. 1-2 of paper book), (ii) Audit report in Form-10B along with audited Profit &Loss account and balance sheet for assessment year 16-17 (pg No.3-16 of paper book) (iii) Letter of CIT-II, certifying that the trust is registered u/s 12A(a) (vide paper book page No.17), and (iv) Certificate of registration of charity Commissioner (vide paper book pg-18).

As a fact finding authority, we have examined the above factual documents, and noted that the assessee filed its return of income for AY.2016-17 on 13.08.2016. The return was processed u/s 143(1) of the Act. While processing the return, the AO has not allowed deduction u/s 11 of the Act and raised demand. Against such intimation u/s 143(1) of the Act, the assessee moved rectification application u/s 154 of the Act before CPC, Bengaluru. An order u/s 154 of the Income Tax Act, 1961

We note that the certificate of registration of the trust is effective. Thus, looking into the facts and circumstances of the present case, where the assessee-trust has satisfied all conditions for availing benefit of exemption u/s 11/12 of the Act, such trust should not be penalized merely because the assessee has filed the Form-10B belated. We also note that Form No.-10B was available with the assessee on 07.10.2016, that is, Form No.10B is dated of 07.10.2016, therefore Form-10B has been prepared prior to assessment order and just because assessee could not file before the authorities, the assessee-trust should not be penalized. We also note that assessee-trust has already filed the Income and Expenditure Account and Balance Sheet, as on 31.03.2016, under the Bombay Public Trusts Act, 1950, on time, hence there is no mala-fide intention to file Form No.10B belated. Moreover, the assessee-trust had substantially satisfied all the conditions availing the benefit of exemption u/s 11 /12 of the Act. Therefore, we of the view that in these circumstances the delay in filing Form No.-10B should be condoned. For this reliance can be placed on the Judgement of Jurisdictional High Court of Gujarat in the case of Sarvodaya Charitable Trust, [2021] 125 taxmann.com 75(Gujarat), wherein it was held that exemption available to a charitable -trust should not be denied merely because the assessee-trust filed Form No.10B belated. Considering these facts and circumstances, we condone the delay in filing Form No.10B.

Since delay in filing audit report in Form No.-10B has been condoned by us, therefore we remit the issue back to the file of /AY.16-17 Shri Modh Patni Ghanchi Gnati Punch Trust Assessing Officer to examine the Form No.-10B and frame the assessment order in accordance with law. The assessee-trust is directed to appear before the Assessing Officer, and file documents and evidences, as required by assessing officer, as and when called for. For statistical purposes, the appeal of assessee is treated as allowed.

In the result, appeal filed by the assessee is allowed for statistical purposes in above terms.