FRP Institute Vs ITO (ITAT Chennai)
Delay in Form-10B Not Fatal: ITAT Revives Appeal and Directs Fresh Consideration in Light of CBDT Circular
The Chennai Bench of the ITAT, in FRP Institute v. ITO (AY 2019-20), addressed denial of section 11 exemption solely on account of delayed filing of audit report in Form-10B and the ex-parte dismissal of appeal by the First Appellate Authority (FAA).
The assessee-trust, registered under section 12A, had filed its return claiming exemption under section 11 but failed to upload Form-10B within the due date, owing to inadvertent oversight and pandemic-related disruptions. The audit report was eventually filed with a delay of 1008 days, leading CPC to deny exemption while processing the return under section 143(1). The assessee pursued condonation under section 119(2)(b) and relied upon CBDT Circular No.16/2024 dated 18.11.2024, but before the appellate authority, the appeal itself was dismissed in limine due to a delay of 1750 days.
The Tribunal held that the assessee had demonstrated bonafide reasons for the delay, as it was actively pursuing statutory remedies to regularise the Form-10B lapse and was not properly advised earlier. Recognising that procedural lapses should not defeat substantive charitable exemptions, the ITAT set aside the FAA’s order, directed condonation of delay, and remanded the matter for fresh adjudication, specifically instructing the FAA to consider the impact of CBDT Circular No.16/2024 and the assessee’s explanation on merits.
Accordingly, the appeal was allowed for statistical purposes, restoring the opportunity to claim exemption under section 11
FULL TEXT OF THE ORDER OF ITAT CHENNAI
