New Bombay Merchants Educational Foundation Vs ACIT (ITAT Mumbai)
The assessee, a charitable trust engaged in imparting education and registered under the Bombay Public Trust Act, section 12A/AB, and approved under section 80G, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 18.02.2025 for Assessment Year 2018-19. The trust argued that its appeal before CIT(A) was dismissed ex parte without considering written submissions, without granting the requested hearing, and without adjudicating several grounds, including denial of exemption under section 11, adjustments under section 143(1), disallowance of expenditure, and assessment without notice under section 143(2).
The assessee stated that its income consisted only of school fees amounting to about Rs. 3.56 crore, which was spent mainly on running the school, leaving a minimal surplus. It had filed its return and obtained an audit report in Form 10B on 25.09.2018, filing the return on 26.09.2018. The Form 10B report, though obtained in time, was uploaded digitally on 27.06.2019. The assessee subsequently filed an application under Rule 17B before the CIT(E) on 12.12.2019 seeking condonation of delay. It was argued that the audit report was available at the time of processing, and denial of exemption solely due to delayed uploading was unwarranted. The assessee relied on several judicial precedents, including decisions of the Gujarat High Court, Bombay High Court, and Tribunal rulings which held that delayed filing of Form 10B is a procedural lapse that should not result in denial of exemption when substantive conditions for section 11 are satisfied.
