Aarti Singal Foundation Vs CPC (ITAT Delhi)
Form 10B Is Directory, Not Mandatory: Minor Delay Can’t Defeat Charitable Exemption:- CPC Adjustment u/s 143(1) Set Aside-
Delhi ITAT ‘A’ Bench in Aarti Singal Foundation vs CPC, Bengaluru (ITA No.89/Del/2025, AY 2021-22, order dated 23-12-2025) allowed the assessee’s appeal and restored exemption u/s 11(1), holding that a marginal delay of four days in filing audit report in Form 10B cannot be a ground to deny charitable exemption.
The assessee-trust filed its return declaring nominal income of ₹39,450. CPC, while processing the return u/s 143(1), disallowed exemption of ₹72.33 lakh u/s 11(1) solely on the ground that Form 10B was filed on 19-02-2022 instead of the due date 15-02-2022. CIT(A) upheld the CPC action and dismissed the appeal ex parte.
ITAT noted that Form 10B was obtained well before filing of return and the delay was only procedural and technical. Relying on a series of coordinate bench decisions and binding precedents (including Puran Chand Arora Charitable Trust, Green Dot Health Foods, G.M. Knitting Industries), Tribunal held that filing of Form 10B is directory in nature, meant to facilitate assessment, and delay can be condoned, especially when the audit report is available before completion of proceedings.
ITAT further held that such an adjustment goes beyond the limited scope of section 143(1) and that a running charitable trust cannot be denied statutory exemption for a trivial procedural lapse. Accordingly, the orders of CPC and CIT(A) were set aside and exemption u/s 11 was directed to be allowed.
Key takeaway: Minor delay in Form 10B filing is not fatal. For charitable trusts, procedural lapses cannot override substantive exemption, and CPC cannot deny section 11 benefits through 143(1) adjustments
FULL TEXT OF THE ORDER OF ITAT DELHI
