Rajdhani Maitri Club Foundation Vs ITO (ITAT Delhi)
The case of Rajdhani Maitri Club Foundation Vs ITO involved an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi, for the assessment year 2022-23. The appellant challenged the decision of the National Faceless Appeal Centre (NFAC), which upheld the disallowance of exemption under Section 11 of the Income Tax Act, 1961. The NFAC’s order was based on the assessee’s delayed filing of the audit report in Form 10B, required under the Act for claiming exemption. Despite being called twice, the assessee did not appear, and the case was decided ex parte.
The primary issue pertained to the denial of Section 11 exemption due to the filing of Form 10B beyond the due date for return submission under Section 139(1). The Revenue argued that the submission of this audit report is a mandatory compliance requirement for claiming the exemption. The assessee contended that the audit report was available at the time of assessment and should not have been ignored. Additionally, the assessee opposed the taxation of gross receipts without considering expenses incurred for its activities.
The ITAT referred to the precedent set by the Gujarat High Court in ACIT v. Xavier Kelvani Mandal Pvt. Ltd., which held that a belated audit report could be accepted during appellate proceedings. Based on this precedent, the tribunal directed the NFAC to reconsider the matter on merits. The reassessment was to be completed within three effective opportunities, placing the responsibility on the assessee to present relevant facts and evidence during the proceedings.
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