Savitri Bai Jhawar Sewa Nyas Vs ITO (Exemption) (ITAT Indore)
In the case of Savitri Bai Jhawar Sewa Nyas Vs ITO (Exemption), the assessee, a charitable trust registered under section 12A, filed its return for AY 2020–21 declaring income of Rs. 20,080 after claiming exemption under sections 11/12. The return was processed under section 143(1), denying exemption and assessing income at Rs. 27,42,960 on the ground that the audit report in Form 10B was filed without audited accounts. The assessee’s rectification application under section 154 was rejected by the Assessing Officer (AO), who held there was no mistake. The appeal before the CIT(A) was dismissed as time-barred with a delay of 505 days without examining merits.
Before the Tribunal, the assessee explained that the delay occurred due to a bona fide belief that the rectification order was invalid as it lacked a Document Identification Number (DIN). Upon noticing an outstanding demand, the appeal was filed with a condonation request. The Tribunal accepted this explanation, observing that the delay was due to a reasonable misunderstanding and not deliberate conduct, and condoned the delay in the interest of substantial justice.
On merits, the Tribunal noted that the assessee had filed Form 10B before filing the return, though without attaching audited financial statements, which was a procedural lapse. The audited accounts were later furnished during rectification proceedings and were available for verification. The Tribunal relied on consistent judicial views that filing of audit reports is a directory requirement and that exemption under sections 11/12 cannot be denied for technical or procedural defects when substantive conditions are fulfilled.
