Isa Viswa Prajnana Trust Vs DCIT (ITAT Cochin)
Income Tax Appellate Tribunal (ITAT), Cochin Bench, has ruled that the Centralised Processing Centre (CPC) was not justified in denying tax exemption to a charitable trust simply because its audit report was filed after the due date for the return of income and after the return was processed. The tribunal directed the CPC to amend its intimation and allow the exemption.
The case involved the Isa Viswa Prajnana Trust, a registered charitable trust engaged in activities related to social and economic development, education, and environment. For the assessment year 2017-18, the trust filed its income tax return on July 31, 2017, claiming exemption under Section 11 of the Income-tax Act, 1961 for income applied towards its charitable purposes, amounting to Rs. 20,20,174.
However, when the CPC processed the return under Section 143(1) of the Act on November 25, 2019, it made an adjustment by disallowing the claimed exemption. The reason cited for this disallowance was the non-filing of the audit report in Form 10B within the prescribed due date for filing the return under Section 139(1).
The trust appealed this decision to the Additional/Joint Commissioner of Income-tax (Appeals), arguing that the delay in filing the audit report was due to the demise of their Chartered Accountant and that the report was subsequently furnished during the appellate proceedings in 2023. They contended that the requirement to file the audit report was procedural and that the mere delay should not lead to the denial of the substantive exemption under Section 11.
