Delay in Form 10B Filing Cannot Deny Section 11 Exemption to Trust: ITAT Panaji

Balaji Educational and Cultural Trust Vs ITO (ITAT Panaji)

Summary: ITAT Panaji allowed the appeal of Balaji Educational and Cultural Trust for Assessment Year 2023-24 and held that exemption under Section 11 of the Income Tax Act, 1961 could not be denied merely because of delay in filing the audit report in Form No. 10B. The assessee, a charitable trust, filed its return of income on 28 November 2023, before the extended due date, declaring income of Rs.18,000 after claiming exemption under Section 11. Form No.10B was also filed on 28 November 2023, though there was an admitted delay in furnishing the audit report within the prescribed period. CPC denied the exemption while processing the return under Section 143(1), and the CIT(A) affirmed that action.

The Tribunal observed that Coordinate Benches have consistently treated the requirement of filing Form No.10B within the prescribed time as directory and procedural in nature. It relied upon Vardhman Stanakvasi Jain Shravak Trust Vs ITO, where exemption under Sections 11 and 12 was held not deniable merely because Form No.10B was filed late but before conclusion of appellate proceedings. The Tribunal also relied upon Premprakash Ashram Trust Vs ITO. Since Balaji Educational and Cultural Trust had filed Form No.10B along with its return and before the Section 143(1) intimation, the Tribunal reversed the CIT(A)’s finding and allowed the assessee’s appeal.