Sou Taradevi Asopa Foundation Vs ITO (ITAT Panaji)
Summary: ITAT Panaji allowed the appeal of Sou Taradevi Asopa Foundation and held that exemption under Section 11 of the Income-tax Act, 1961 could not be denied merely because the prescribed audit report in Form 10B was filed with a delay of 22 days, when the report was already available with CPC before the return was processed under Section 143(1). The assessee, a Section 8 company registered under the Companies Act, 2013 and also registered under Sections 12A and 80G of the Income-tax Act, had claimed Section 11 exemption for AY 2022-23. CPC denied the exemption because Form 10B had not been furnished at least one month before the due date for filing the return under Section 139(1). The assessee’s rectification application under Section 154 also resulted in no change.
The Tribunal noted that the due date for filing the return was 07.11.2022 and consequently the prescribed date for Form 10B was 07.10.2022. The assessee furnished Form 10B on 29.10.2022, resulting in a delay of 22 days. Significantly, the return itself was also furnished on 29.10.2022 within the extended time limit under Section 139(1), while CPC processed it only on 28.03.2023. Thus, the audit report was already on the Department’s record well before processing of the return.
The assessee relied on Shree Gajanan Maharaj Shegaon Mandir Vishwasth Mandal vs. Exemption Ward, Aurangabad, ITA No.625/PUN/2026, order dated 10.08.2026. That decision had followed Indian Medical Association Pune Branch vs. DCIT(E), which in turn relied on the Gujarat High Court judgment in CIT vs. Laxmanarayan Dev Shrishan Seva Khendra. The Gujarat High Court had accepted condonation where Form 10B was furnished electronically during appellate proceedings with the audited financial statements and had distinguished the Supreme Court decision in PCIT vs. Wipro Ltd.
Following the coordinate Bench ruling in Shree Gajanan Maharaj Shegaon Mandir Vishwasth Mandal, the Panaji Bench held that the assessee was entitled to Section 11 exemption because Form 10B was already available with CPC before processing of the return under Section 143(1). It therefore allowed the grounds raised by the assessee and allowed the appeal.
Cases Discussed
- Shree Gajanan Maharaj Shegaon Mandir Vishwasth Mandal vs. Exemption Ward, Aurangabad, ITA No.625/PUN/2026, order dated 10.08.2026 – Followed by the Tribunal for allowing Section 11 exemption despite delayed Form 10B filing.
- Indian Medical Association Pune Branch vs. DCIT(E), ITA No.761 to 766/PUN/2025, order dated 31.07.2025 – Coordinate Bench decision relied upon in Shree Gajanan Maharaj Shegaon Mandir Vishwasth Mandal on delayed filing of Form 10B.
- CIT vs. Laxmanarayan Dev Shrishan Seva Khendra, (2024) 167 taxmann.com 548 (Gujarat High Court) – Relied upon for condoning delayed Form 10B filing where the audit report was furnished during appellate proceedings.
- PCIT vs. Wipro Ltd. [2022] 446 ITR 1 (Supreme Court) – Distinguished in the precedent followed by the Tribunal.
- Sarvodaya Charitable Trust v. Income Tax Officer (Exemption), Special Civil Application No.6097 of 2020, decided on 09.12.2020 (Gujarat High Court) – Cited in the reproduced precedent for the equitable, balancing and judicious approach to delayed Form 10B filing.
- Social Security Scheme of GICEA – Followed by the Gujarat High Court in the precedent reproduced by the Tribunal on condonation of Form 10B delay.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PANAJI
This appeal filed by the assessee is directed against the order dated 17.02.2026 passed by Ld. Addl./JCIT(A)-1, Ahmedabad [‘Ld. CIT(A)’] for the assessment year 2022-23.
2. The appellant has raised the following grounds of appeal :-
“1. That the order dated 17.02.2026 passed by the Commissioner of Income Tax, Appeal, ADDL/JCIT (A)-1, Ahmedabad (“the learned CIT(A)” in short), the Rectification order passed by the Assessing Officer (“the learned AO” in short) under Section 154 of the Income-tax Act, 1961 (“the Act” for short), dated 14.08.2023 and the Intimation passed by the learned AO under Section 143(1) of the Act dated 28.03.2023, are all bad in law, arbitrary, unjustified, unsustainable, and opposed to the facts of the case.
2. That the learned AO has erred in not allowing the Appellant’s rightful exemption under Sections 11 and 12 of the Act, and in consequently raising a demand of Rs. 3,65,200/- vide the impugned intimation issued under Section 143(1) of the Act, solely on account of an alleged delay of 22 days in furnishing the audit report in Form 10B. The learned CIT(A) has erred in upholding the same without proper appreciation of facts and law.
3. That the denial of exemption under Sections 11 and 12 of the Act on account of delay in filing Form 10B is wholly unjustified. The Appellant had filed Form 10B on 29.10.2022, prior to the issuance of the intimation under Section 143(1) dated 28.03.2023. It is a settled position that where Form 10B is available on record of the revenue/respondents prior to the issuance of intimation under Section 143(1), the exemption under Section 11 cannot be denied merely on account of delay in filing the said form.
4. That, in any event, the delay was occasioned due to genuine and bona fide reasons, namely that the director of the trust underwent knee surgery on 29.07.2022 and remained immobile for approximately ten weeks thereafter. The Appellant had filed an application before the Hon’ble CIT (Exemptions), Bangalore under S.119(2)(b) seeking condonation of delay in filing Form 10B. The learned CIT(A) has erred in not considering the said application and the bona fide circumstances explained therein and thereby upholding the erroneous disallowance of rightful exemptions under the Act.
5. Moreover, the learned CIT(A) failed to appreciate that the entitlement to exemption under Sections 11 and 12 is not contingent upon the S.119(2)(b) application being allowed and thus, the impugned order is bad in law.
6. That it is further well established that procedural delays, particularly those arising from bona fide and unavoidable circumstances, ought not to defeat substantive rights, more so when the delay is merely 22 days only. The delay was due to genuine medical reasons without any mala fide intent, which ought to have been duly considered by the learned CIT(A).
7. That, without prejudice and in any event, the learned AO erred in not allowing deemed expenditure of 15% of gross receipts given that it is admitted that the Appellant is a charitable trust duly registered under Sections 12A and 80G of the Act. Moreover and in any event, the learned AO erred in not allowing deduction of administrative expenditure of Rs. 41,493/-. The learned CIT(A) erred in upholding the said disallowances.
8. That, without prejudice and in any event, the impugned intimation and rectification order was passed by the learned AO without any prior intimation or effective opportunity to show cause against the same. Hence, they are illegal and contrary to the principles of natural justice.
9. Without prejudice to the above, the interest and demand levied are not in accordance with law. The same are therefore liable to be set aside in the facts and circumstances of the present case.
10. That the impugned orders of the learned AO and of the learned CIT(A) are otherwise bad in law, contrary to the facts on record, violative of the principles of natural justice, and liable to be set aside.
The Appellant most humbly craves leave of this Hon’ble Tribunal to add to or alter, by deletion, substitution or otherwise, the other grounds of appeal, at any time before or during the hearing of the appeal. The Appellant further submits that the above grounds are independent of and without prejudice to one another.”
3. Facts of the case, in brief, are that the assessee is a section 8 company duly registered under the Companies Act, 2013 and also registered u/s 12A and 80G of the Income Tax Act, 1961. The assessee company filed its return of income claiming exemption u/s 11 of the IT Act which was processed u/s 143(1) of the IT Act on 28.03.2023 by denying the exemption u/s 11 of the IT Act, since the audit report in Form 10B was not furnished at least one month prior to the due date for furnishing return of income u/s 139(1) of the IT Act. The assessee also filed rectification u/s 154 of the IT Act on 14.08.2023, however, the CPC issued revised intimation order with no change.
4. Being aggrieved with the above intimation order, the assessee preferred an appeal before Ld. CIT(A). Not being satisfied with the reply and submissions of the assessee company, Ld. CIT(A) dismissed the appeal filed by the assessee.
5. It is the above order against which the assessee is in appeal before this Tribunal.
6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee is a section 8 company duly registered under the Companies Act, 2013 and also registered u/s 12A and 80G of the Income Tax Act, 1961 and furnished the prescribed audit report in Form 10B on 29.10.2022. As per section 12A(b) of the IT Act, the assessee company was required to file prescribed audit report in Form 10B at least one month prior to the due date of filing of return of income u/s 139(1) of the IT Act and for the period under consideration, the due date for filing return of income was 07.11.2022, accordingly, the last date to file Form 10B audit report in the instant case in hand was 07.10.2022, however, the same was furnished on 29.10.2022 i.e. with a delay of 22 days. We further find that the return of income was furnished by the assessee on 29.10.2022 which is within the prescribed extended time limit u/s 139(1) of the IT Act. We further find that the return of income was processed on 28.03.2023 which is admittedly subsequent to the filing of Form 10B audit report. In other words, Form 10B audit report was very well available with the CPC on 28.03.2023 i.e. before processing of return of income u/s 143(1) of the IT Act. It was the contention of the counsel of the assessee that filing of Form 10B audit report is only directory and not mandatory and in this regard, reliance was placed on various decisions passed by coordinate bench of this Tribunal including the case of Shree Gajanan Maharaj Shegaon Mandir Vishwasth Mandal vs. Exemption Ward, Aurangabad in ITA No.625/PUN/2026 order dated 10.08.2026 wherein the Tribunal allowed the deduction u/s 11 of the IT Act by relying on other coordinate bench decision passed in the case of Indian Medical Association Pune Branch vs. DCIT(E) in ITA No.761 to 766/PUN/2025 order dated 31-07-2025, wherein the Tribunal relying on judgement of Hon’ble Gujarat High Court in the case of CIT vs. Laxmanarayan Dev Shrishan Seva Khendra (2024) 167 taxmann.com 548 allowed the assessee’s claim of exemption u/s. 11 of the Act by observing as under :-
“5. The Ld.AR submitted that the assessee has been denied its claim of exemption u/s. 11 of the Act on the ground that the assessee filed audit report belatedly. The Ld.AR submitted that the audit report in Form-10B was filed electronically on 04-09-2018 (page 13 to 15 of the paper book refers). He submitted that since the assessee has filed the audit report in Form-10Bduring the appellate proceedings and the return of income was furnished on 24-11-2017 (which is filed within the due date for AY. 2016- 17 i.e. 31-03-2018) before the intimation order was passed by the CPC and Form-10 was also filed electronically on 21-06-2019 (page 30-31 of the paper book refers), therefore, the claim of exemption u/s. 11 should not be denied.
5.1. In support of his above contention, the Ld.AR relied on the decision of the Co-ordinate Bench of the Pune Tribunal in the case of Indian Medical Association, Pune Branch vs. DCIT(E) in ITA No.761 to 766/PUN/2025,dt.31-07-2025 wherein the Tribunal in turn relied on the decision of the Hon‟ble Gujarat High Court in the case of CIT vs. Laxmanarayan Dev Shrishan Seva Khendra (2024) 167 taxmann.com 548 (Guj) and allowed the appeal of the assessee, condoning the delay in filing of Form-10B.
5.2. The Ld.AR further submitted that delay in filing of Form-10B is merely a procedural lapse and relying on the settled judicial principles, and CBDT Circular No. 14(XL-35), dt. 11-04-1955 submitted that the assessee‟s claim of exemption u/s. 11 should be allowed.
6. The Ld.DR supported the order of the Ld.ADDL/JCIT(A) and the Ld.AO.
7. We have heard the Ld. Representatives of the Parties and perused the material available on record. It is an admitted fact that the assessee filed its return for AY. 2016-17 u/s. 139(4) of the Acton 24-11-2017, declaring total income of Rs. NIL, after claiming exemption u/s. 11 of the Act. The return of the assessee was processed by the Ld.AO/CPC and an intimation order u/s. 143(1) of the Act was passed on 30-05-2018, determining the income of the assessee at Rs.1,43,91,810/- as against the returned income of Rs. NIL due to non-filing of Form-10B/10 by the assessee. We find that the Ld.ADDL/JCIT(A) has dismissed the appeal of the assessee for the reasons which we have already reproduced in the preceding paragraphs. Before us, the Ld. Counsel for the assessee has taken a plea that since the assessee has filed the audit report during the appellate proceedings and the return of income was furnished before the intimation order was passed by the CPC, therefore, the claim of exemption u/s. 11 of the Act should not be denied. There is also no dispute to the fact that the assessee filed the audit report in Form-10B on 04-09-2018 and Ld.ADDL/JCIT(A) has passed the impugned order on 31-12-2025. Admittedly, Form-10B was filed after intimation order u/s.143(1) of the Act was passed, but before the appellate proceedings were completed.
7.1. We find that an identical issue had come up before the Co-ordinate Bench of the Pune Tribunal in the case of Indian Medical Association, Pune Branch vs. DCIT(E) (supra), where the Tribunal relied on the decision of the Hon‟ble Gujarat High Court in the case of CIT vs. Laxmanarayan Dev Shrishan Seva Khendra (supra) and allowed the assessee‟s claim of exemption u/s. 11 of the Act. In the case of CIT vs. Laxmanarayan Dev Shrishan Seva Khendra (supra), the Hon‟ble High Court has held that – “where assessee, a public charitable trust, did not upload audit report in Form 10B along with its return of income and CPC processed return under section 143(1) denying benefit of section 11, since assessee had already filed audit report in Form 10B electronically during pendency of appellate proceedings along with copy of audited financial statements, delay in filing said form was to be condoned”.
7.2. The Hon‟ble High Court while holding so, has also distinguished the decision of the Hon‟ble Supreme Court in the case of PCIT vs. Wipro Ltd. [2022] 446 ITR 1(SC), which has been relied by the Ld.ADDL/JCIT(A) in his impugned order to dismiss the appeal of the assessee. The relevant extract of the order of the Tribunal in the case of Indian Medical Association, Pune Branch vs. DCIT(E) (supra) is reproduced below:
“16. We find the Hon’ble Gujarat High Court in the case of CIT v. Laxmanarayan Dev Shrishan Seva Khendra (supra) has held that where the assessee, a public charitable trust, did not upload audit report in Form 10B along with its return of income and CPC processed return under section 143(1) denying benefit of section 11, since assessee had already filed audit report in Form 10B electronically during pendency of appellate proceedings along with copy of audited financial statements, delay in filing said form was to be condoned. The relevant observations of Hon’ble High Court read as under:
7. Reference to the aforesaid decision has no connection whatsoever remotely to the facts of the present case and therefore, in the facts of the present case, the Tribunal has rightly followed the decision of this Court in case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) in Special Civil Application No.6097 of 2020 decided on 09th December, 2020 as well as the decision in case of Social Security Scheme of GICEA (supra) to uphold the decision of the CIT (Appeals), wherein this Court has held that the approach of the authority in such type of cases should be equitable, balancing and judicious. In the facts of the case. when the assessee has already filed the audit report in Form 10B electronically on 27.02.2021 during pendency of appellate proceedings along with copy of audited financial statements, delay in filing the said form is rightly condoned by CIT(A) and the Tribunal.
8. In such circumstances, we are of the opinion that the Tribunal has not committed any error by not following the decision in case of M/s. Wipro Limited (supra) as referred to and relied upon by learned advocate for the appellant-Revenue, and has rightly followed the decision of this Court in case of Social Security Scheme of GICEA (supra).
9. In view of the foregoing reasons, we are of the opinion that no question of law much less any substantial question of law arises from the impugned order of the Tribunal. The Appeal is accordingly dismissed.”
17. In view of the above decisions, we hold that the Ld. Addl./JCIT(A) was not justified in rejecting the claim of exemption u/s 11 of the Act on account of delay in filing of the return of income as well as delay in uploading the audit report in Form 10B. We, therefore, set aside the order of the Ld. CIT(A)/NFAC and direct the Assessing Officer/ CPC to allow the claim of exemption u/s 11 of the IT Act, 1961. The grounds raised by the assessee are accordingly allowed. Since the assessee succeeds on the issue of claim of exemption u/s 11, therefore, the alternate claim of the assessee, for taxing the net income rather than gross receipt does not require any adjudication being academic in nature. The appeal of the assessee is accordingly allowed.”
7.3. Based on the factual matrix and the legal position set out above, in our view, the Ld.ADDL/JCIT(A) erred in dismissing the assessee‟s appeal denying its claim of exemption u/s. 11 of the Act on the ground of delay in filing of Form-10B. We, therefore, set aside the order of the Ld.ADDL/JCIT(A) and direct the Ld.AO/CPC to allow the assessee‟s claim of exemption u/s. 11 of the Act. The effective grounds raised by the assessee are accordingly allowed. The other grounds raised by the assessee relating to taxing of the net income and not gross receipts are not adjudicated as these grounds are rendered academic in nature in view of our decision above on the issue of claim of exemption u/s. 11 of the Act.
8. In the result, the appeal filed by the assessee is partly allowed.
7. Respectfully following the above decision passed by coordinate bench of this Tribunal in the case of Shree Gajanan Maharaj Shegaon Mandir Vishwasth Manda (supra), we are of the considered opinion that the assessee is entitled to claim exemption u/s 11 of the IT Act, since the prescribed audit report in Form 10B was very well available with CPC prior to processing the return of income u/s 143(1) of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed.
8. In the result, the appeal filed by the assessee is allowed.
Order pronounced on this 20th day of August, 2026.
