Seva Bharathi Vs CIT (Exemptions) (ITAT Hyderabad)
Conclusion: Since the Form 10B was filed along with the return of income and within the due date of filing the return of income, the delay in filing the Form 10B could not be a ground for denial of the exemptions under Sections 11 and 12.
Held: Assessee, a charitable trust registered under section 12A, filed its return of income for A.Y. 2022-23 along with Form 10B, though beyond the CBDT-extended due date of 07.10.2022. CPC, Bengaluru, processed the return under section 143(1) and denied exemption under sections 11 and 12 due to the delayed filing of Form 10B. The assessee’s application for condonation of delay under section 119(2)(b) was rejected by the CIT(Exemptions). CIT(A) sustained the denial of exemption. It was held that audit report in Form 10B was filed along with the return of income and was available with CPC at the time of processing. Following consistent judicial precedents (Association of Indian Panelboard Manufacturer, Ramji Mandir Religious & Charitable Trust, St. Thomas High School, etc.), it was held that the filing of Form 10B was directory and not mandatory, and minor procedural delay could not defeat a substantive claim for exemption. Since the audit report was on record before processing under section 143(1), exemption under sections 11 and 12 could not be denied.
