Friends of Sick Association Vs ITO (Exemption) (ITAT Bangalore)
Missed Form 10? ITAT Gives Trust a Lifeline – AO Directed to Await Condonation Decision Before Denying Section 11(2) Benefit
The Bangalore ITAT granted relief to Friends of Sick Association by restoring the matter to the Assessing Officer where exemption under Section 11(2) had been denied merely because Form 10 was not filed within the prescribed time, resulting in taxation of accumulated income of ₹93.36 lakh and a consequential demand of about ₹34.28 lakh.
The CPC, while processing the return under Section 143(1), denied the accumulation benefit under Section 11(2) on the ground that Form 10 had not been filed before the due date. The appellate authority upheld the adjustment, observing that Form 10 was filed only on 14.02.2025, after the intimation under Section 143(1) had already been issued, and therefore the statutory requirement had not been complied with.
Before the Tribunal, the assessee explained that Form 10 had not been filed due to an inadvertent error on the part of the auditor. Immediately upon noticing the omission after receipt of the intimation, the trust filed Form 10 and thereafter submitted an application before the CIT(Exemptions) under Section 119(2)(b) seeking condonation of delay. The condonation application was still pending.
The Tribunal noted that this was not a case where Form 10 had never been filed, but rather a case of delayed filing coupled with a pending condonation request before the competent authority. Considering the circumstances, the ITAT held that the proper course would be to restore the matter to the Assessing Officer and direct him to take a decision in accordance with law after the condonation application is decided.
Accordingly, the issue was remanded to the AO with a direction to act based on the outcome of the condonation proceedings and after granting a reasonable opportunity to the assessee.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
