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Facts
The assessee's appeal arose from an order related to assessment year 2020-21. The CIT(A) refused to condone a significant delay of 1213 days in filing the lower appeal. The assessee's section 11 exemption claim was disallowed due to the non-filing of the prescribed tax audit report in Form 10B within the due date.
Held
The Tribunal held that the requirement to file/upload the tax audit report in Form 10B is a directory provision, not mandatory. The delay in filing the appeal was condoned, and the matter was restored to the assessing authority for fresh computation.
Key Issues
Whether the filing of Form 10B is a mandatory or directory requirement for claiming exemption under Section 11, and whether the delay in filing the appeal should be condoned.
Sections Cited
143(1), 139(1), 11
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal 2020-21 arises against CIT(A)-3, Chennai’s order dated 12.06.2025 (DIN & Order No. ITBA/APL/S/250/2025-26/1076972156(1), in proceedings u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties. Case file perused.
It emerges during the course of hearing that the CIT(A) has refused to condone the assessee’s delay of 1213 days in filing of the lower appeal since instituted on 26.04.2025 against the assessment in question framed on 30.11.2021. The Revenue could hardly dispute that not only the assessee had indeed filed its condonation petition explaining all the corresponding reasons of the above said delay of 1213 days but also a part thereof is already covered under the Covid-19 pandemic out period as well. The impugned delay is condoned therefore.
Coming to the sole substantive issue between the parties on merits, it is noticed that learned lower authorities have disallowed the assessee’s section 11 exemption claim for the sole reason that it had not filed/ uploaded the prescribed tax audit report in form 10B within the “due” date of filing the return u/s 139(1) of the Act. The Revenue therefore wants to treat the foregoing compliance as mandatory than a directory provision.
That being the case, I hereby quote (2014) 41 taxmann.com 184 (Guj) CIT v. Xavier Kelavani Mandal (P) Ltd. & (2019) 110 taxmann.com 11 (Mad) Chandraprabhuji Maharaj Jain v. DCIT(E) to conclude that the impugned section 10B tax audit report filing/ uploading is a directory provision only; to accept the assessee’s sole substantive ground in principle and the matter is hereby restored to the assessing authority therefore for computation in the assessee’s case as per law, in very terms.
This assessee’s appeal is allowed. Order pronounced in open court on 22.09.2025.