Case Law Details
Heralds of Good News Vs ITO (Exemption) (ITAT Visakhapatnam)
The Income Tax Appellate Tribunal considered an appeal against the order of the Commissioner of Income Tax (Appeals) for AY 2016–17, where the core issue was whether disallowance under Section 11(2) was justified due to delayed filing of Form-10.
The assessee had filed its return of income within the extended due date of 17.10.2016. However, Form-10, required for claiming accumulation of income for specific purposes under Section 11(2), was not filed along with the return. Consequently, the Assessing Officer disallowed Rs.57,04,939 and denied the benefit of accumulation. The CIT(A) upheld this disallowance.
Before the Tribunal, the assessee submitted that Form-10 was filed on 25.10.2018 and was available on record during assessment proceedings. It was argued that filing Form-10 along with the return is procedural and not mandatory, and that no prejudice would be caused to the Revenue if the matter was reconsidered. The Revenue contended that filing Form-10 with the return is mandatory but did not object to remanding the matter for fresh consideration.
The Tribunal noted that the return was filed within the due date and that Form-10 was available before the Assessing Officer during assessment. It also considered judicial precedents where delay in filing Form-10 was condoned and exemption was not denied solely on that ground.
Applying these principles, the Tribunal directed the Assessing Officer to examine the Form-10 filed on 25.10.2018 and allow accumulation under Section 11(2) if found in order. The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
This appeal by the assessee against order dated 26.09.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] for the A.Y. 2016–17.
2. The assessee raised five grounds of appeal amongst which only issue emanates for consideration, as to whether the CIT(A) is justified in confirming the disallowance made by the A.O on account of filing of Form-10 belatedly in the facts and circumstances of the case.
3. At the outset, it is noted that the extended due date for filing of return of income for the year under consideration is 17.10.2016 and assessee filed return of income on 17.10.2016. We note that assessee’s claim under section 11A of the Act was denied for non-filing of Form-10 along with the return of income. Accordingly, the A.O disallowed an amount of Rs.57,04,939/- on account of specific purposes under section 11(2) of the Act vide its order dated 30.12.2018 by holding that the assessee is not eligible for accumulation or set-apart of funds under section 11(2) of the Act. The CIT(A) confirmed the same vide Para No. 5.1 and 5.2 by recording his reasons.
4. The Learned Authorised Representative, Shri C. Subrahmanyam, CA [hereinafter in short “Ld.AR”] raised a contention before us that the Form-10 was filed on 25.10.2018 and it was available on record before passing Assessment Order. He referred to decisions as placed on record from Page Nos. 41 to 55 and argued to give a direction to A.O to consider the Form-10 in giving relief to the assessee claimed under section 11 of the Act. Further, he argued filing of Form-10 along with the return of income is a procedural in nature but not mandatory and no prejudice will cause to the Revenue by remanding the matter to the file of A.O for his fresh consideration.
5. Learned Departmental Representative, Shri CVA Rama Rao, Sr.AR [hereinafter in short “Ld.DR”] opposed the arguments of the Ld.AR and argued that the statute very clearly contemplates filing of Form-10 along with the return of income to claim exemption under section 11 of the Act. The A.O rightly denied the claim for non-filing of Form-10 along with the return of income. The Ld. DR vehemently argued that when the statue provides filing of Form-10 along with the return of income, is mandatory in nature but not procedural in nature. He reported no objection in remanding matter to the file of A.O considering the decisions as placed on record by the assessee for his fresh consideration.
6. Having heard both the parties, we note that the assessee filed return of income within the due date as prescribed under statute. Three is no dispute with regard to filing of Form-10 during the course of assessment proceedings which is clear from Page No.3 of assessment order, was available on record before the A.O during the course of assessment proceedings. On perusal of the case laws placed on record by the Ld.AR, we note that the Hon’ble Delhi High Court in the case of Bar Council of India CIT (Exemption) reported in [2024] 466 ITR 780 (Delhi) condoned the delay in filing Form-10. Further, the Hon’ble Bombay High Court in the case of KSB Care Charitable Trust v. CIT (Exemption) [2025] 178 taxmann.com 771 (Bombay), held that the benefit of exemption should not be denied merely on account of delay in furnishing Form-10 and it is permissible for the assessee to produce at a later stage either before the ITO or before the Appellate Authority by assigning sufficient cause. Further, ITAT Chennai Bench in the case of Joy of Sharing Foundation-Charitable Trust v. ITO (Exemptions) [2025] 174 taxmann.com 745 (Chennai – Trib), directed the CPC/A.O to allow the accumulation of income claimed by the assessee under section 11(2) of the Act though Form-10 was filed belatedly. We find the facts and circumstances of the present case are similar to the facts and circumstances with the above case laws and by applying the finding rendered therein we direct the A.O to examine Form-10 filed on 25.10.2018 and allow accumulation under section 11(2) of the Act. Thus, grounds raised by the assessee are allowed for statistical purposes.
7. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th April, 2026.
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