Exemption u/s 11 should not be Denied Merely on Account of Delay in Furnishing the Audit Report in Form No. 10B: ITAT [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the exemption under Section 11 of the Income Tax Act 1961 should not be denied merely on account of delay in furnishing the audit report in Form 10B.

The assessee, Laxmanarayan Dev Shrishan Seva Khendra, was a Public Charitable Trust engaged in various educational activities and running of Schools and Yogashram. The assessee trust was registered as a charitable organization under Section 12AA of the Income Tax Act with effect from 01.04.2004 and also approved for the purpose of Section 80G of the Income Tax Act.

 The assessee filed its Return of Income for the Assessment Year 2017-18 on 11.10.2017 declaring NIL income. However, the assessee did not upload the Audit Report in Form 10B along with the Return of Income

The assessee was sent a communication from Computer Processing Centre, (CPC). However, the assessee could not respond to the above communication because of certain communication gaps.

Therefore the CPC processed the Return under Section 143(1) of the Income Tax Act dated 24.03.2019 denying the benefit of exemption under Section 11 of the Income Tax Act to the assessee and demanded tax.

Rakesh Jha on behalf of the assessee submitted that the assessee was not eligible to claim exemption u/s. 11 of the Income Tax Act the assessee submitted when the assessee failed to file an Audit Report in Form No. 10B along with the Return of Income

Nitesh Thakkar on behalf of the assessee submitted that the trust had substantially satisfied conditions for availing exemption under Section 11 of the Income Tax Act and should not be denied exemption merely on the bar of limitation especially when the legislature had conferred wide discretionary powers to condone such delay in filing Audit Report in Form No. 10B.

The two-member Bench of Waseem Ahmed, (Accountant Member) and T.R. Senthil Kumar, (Judicial Member)  dismissed the appeal filed by Revenue holding that the assessee was eligible for claim of exemption under Section 11 of the Income Tax Act referring to the decision in Social Security Scheme of GICEA.

To Read the full text of the Order CLICK HERE

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