Sahaj Seva Trust Vs ITO Exemption (ITAT Pune)
Summary: The Income Tax Appellate Tribunal (ITAT), Pune, allowed the appeal of Sahaj Seva Trust for Assessment Year 2014-15, holding that exemption under Sections 11 and 12 of the Income-tax Act, 1961, could not be denied merely because the trust had filed its audit report in Form No. 10B beyond the prescribed time limit. The appeal arose from an order dated 17 December 2024 passed by the National Faceless Appeal Centre, Delhi, against an assessment-related order dated 14 January 2021 under Section 154 read with Section 143(1). The assessee maintained that it possessed valid registration under Section 12A and had furnished Form No. 10B on 2 March 2022 during appellate proceedings. It contended that the filing requirement was directory rather than mandatory and that the appellate authority should have considered the belated audit report instead of denying the exemption.
The Tribunal observed that the assessee held valid registration under Section 12A, as evidenced by a letter dated 13 March 2022, and that the audit report had been submitted during the appellate proceedings. It referred to the Surat Bench decision in S.M. K.R. Vashi High School Vs. ITO (Exemption), reported in 157 taxmann.com 702, which held that exemption under Section 11 could not be denied solely because Form No. 10B could not be uploaded within time due to technical difficulties on the income-tax portal. The Tribunal also relied on the Gujarat High Court decision in CIT (Exemption) Vs. Anjana Foundation, reported in 168 taxmann.com 462, which treated filing of Form No. 10B as a procedural requirement and held that delay in furnishing the audit report should not, by itself, result in denial of exemption.
Following these precedents, the ITAT Pune held that belated filing of Form No. 10B during appellate proceedings did not justify denial of the benefits available under Sections 11 and 12 to the registered trust. The Tribunal treated the filing requirement as directory in the circumstances of the case and concluded that the exemption claimed in the income-tax return deserved to be allowed. Accordingly, the assessee’s grounds of appeal were allowed, and the appeal was decided in its favour by an order pronounced on 6 May 2025.
Cases Discussed
- S.M. K.R. Vashi High School Vs. ITO (Exemption), 157 taxmann.com 702 (ITAT Surat) – Relied upon for the proposition that exemption under Section 11 should not be denied merely because Form No. 10B could not be uploaded on time owing to technical difficulties.
- CIT (Exemption) Vs. Anjana Foundation, 168 taxmann.com 462 (Gujarat High Court) – Relied upon for treating the filing of Form No. 10B as a procedural requirement and for holding that delay alone should not defeat exemption under Section 11.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to A.Y. 2014-15 is directed against the order dated 17.12.2024 passed by National Faceless Appeal Centre, Delhi arising out of the Assessment order dated 14.01.2021 passed u/s.154 r.w.s.143(1) of the Income-tax Act, 1961 (in short ‘the Act).
2. The only grievance of the assessee is that the benefit of sections 11 and 12 has been denied to the assessee for non- filing of Form No.10B within the prescribed time limit and that ld.CIT(E) has not considered the Form No.10B filed at the later stage on 02.03.2022 which was filed at the appellate proceedings. It was also submitted that filing of Form No.10B is directory in nature and the same should have been considered by ld.CITA) while deciding the issue.
3. Ld. Departmental Representative supported the orders of the lower authorities.
4. We have heard both the sides and perused the record placed before us. We note that assessee holds valid registration u/s.12A of the Act vide letter dated 13.03.2022, but has filedForm No.10B belatedlyon 02.03.2022 and ld.CIT(A) who has also the co-terminus powers to that of ld. AO did not accepted the audit report filed on Form No.10B and denied the benefits of sections 11 and 12 to the assessee.
5. We note that the Coordinate bench, Surat in the case of S.M. K.R. Vashi High School Vs. ITO (Exemption) reported in 157 taxmann.com 702 (ITAT, Surat) has held that even if the Form No.10B could not be uploaded due to some technical error on the income-tax portal, benefit of section 11 could not be denied merely on account of delay in furnishing the audit report. Hon’ble High Court in the case of CIT (Exemption) Anjana Foundation reported in 168 taxmann.com 462 (Gujarat) has held that filing of Form No.10B is a procedural requirement and benefit of section 11 should not be denied for delay in furnishing Form No.10B. Hon’ble Court thus affirmed the view taken by the Tribunal in its order dated 07.02.2023 in ITA No.695/Ahd/2023. We therefore following the ratio laid down in the above referred decisions hold that the assessee holding valid registration u/s.12A of the Act has filed Form No.10B belatedly but during the appeal proceedings itself and filing of such report is directory and not mandatory as held by Hon’ble Courts, therefore, benefit of sections 11 and 12 claimed by the assessee in income-tax return deserves to be allowed. Grounds of appeal raised by the assessee are allowed.
6. In the result, appeal of the assessee is allowed.
Order pronounced on this 06th day of May, 2025.
