M P Birla Foundation Educational Society Vs DCIT (Exemption) (ITAT Kolkata)
Exemption Cannot Be Denied for Technical Delay- Late Audit Report is Procedural – ITAT Kolkata Restores 10(23C)(vi) Exemption Claim
Kolkata Tribunal dealt with denial of exemption u/s 10(23C)(vi) in an intimation issued u/s 143(1) for A.Y. 2018-19.
Assessee, an educational society, filed return on 28.03.2019 claiming exemption of ₹26.65 crores u/s 10(23C)(vi). CPC, however, denied exemption in intimation u/s 143(1) dated 18.03.2020 on the ground that return & audit report in Form 10BB were filed belatedly beyond due date u/s 139(1). Later scrutiny u/s 143(3) also repeated denial citing same reason. CIT(A) upheld CPC’s action, holding that exemption is allowable only if return & audit report are filed within prescribed time.
Before Tribunal, Assessee argued that Form 10BB, though belated, was already available at the time of processing & hence claim could not be rejected on a mere technical lapse. It relied on Calcutta HC decision in CIT (Exemption) Vs. Indian Sugar Mills Association (ITAT/270/2023, 10.01.2024), which held that audit report filing is procedural & directory. Similar reliance was placed on CBDT Circular 16/2022 issued u/s 119(2)(b), permitting condonation of delay in filing audit reports up to 3 years.
