Gram Nirman Mandal Vs DC/AC Exemption (ITAT Kolkata)
Form 10B Is Procedural- Delay in Form 10B Filing Not Fatal: ITAT Sets Aside NFAC’s Ex-Parte Order, Remands Matter
Patna Tribunal dealt with an ex-parte dismissal by CIT(A)/NFAC concerning denial of exemption u/s 11, 12 & 10(23B) for AY 2018-19. The Assessee, a historic voluntary organisation founded by Lok Nayak Jayaprakash Narayan in 1954 & engaged in Khadi activities, had failed to upload Form 10B on time due to severe medical issues faced by the tax auditor’s family. Though Form 10B was eventually filed electronically on 13.04.2022, its delayed filing led the AO to treat the entire surplus of ₹3,16,98,714 as taxable & the NFAC dismissed the appeal after repeated non-compliance.
Tribunal noted that CBDT Circular No.2/2020 & subsequent Circular No.16/2022, as well as the Calcutta High Court ruling in CIT (Exemptions) Kolkata vs Indian Sugar Mills Association, treat filing of Form 10B as a procedural & directory requirement. The NFAC’s order also failed to satisfy the mandate of section 250(6), having dismissed the appeal purely for non-prosecution.
In the interest of justice, the Tribunal set aside the NFAC order & remanded the matter to the AO, directing that Form 10B must be examined only after the pending condonation application is decided by the CIT(E). The appeal was thus partly allowed for statistical purposes.
