Parantap Charitable Trust Vs ITO (ITAT Ahmedabad)
Belated Form 10B Cannot Defeat Section 11 Exemption: ITAT Ahmedabad Condones 368-Day Delay and Grants Relief
The Ahmedabad SMC Bench of the ITAT allowed the assessee-trust’s appeal for AY 2017-18, holding that exemption under section 11 cannot be denied merely due to belated filing of Form 10B, when the audit report was available before the tax authorities during rectification proceedings.
The Tribunal condoned a delay of 368 days in filing the appeal, accepting the assessee’s explanation that it was under a bona fide and reasonable belief that relief had already been granted—since the CPC had allowed exemption in rectification and the CIT(A) had held filing of Form 10B to be procedural and directory, subject only to verification under CBDT Circular No. 10/2019. The assessee realised the adverse impact only when the AO passed the appeal-effect order reversing the exemption, prompting the appeal before ITAT.
On merits, the ITAT held that:
- Filing of Form 10B is a procedural requirement, not a substantive condition,
- If the audit report is filed before completion of assessment or during rectification, the requirement of law is satisfied, and
- The issue is squarely covered by binding precedents of the Gujarat High Court (Association of Indian Panelboard Manufacturers, Sarvodaya Charitable Trust) and earlier ITAT rulings.
Since even the CIT(A) had accepted the legal position that Form 10B filing is directory, the Tribunal found no justification to deny exemption. Accordingly, the AO was directed to allow exemption under section 11.
The appeal was thus allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) dated 15.06.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18.
