ACIT (Exemptions) Vs Shivai Vidya Prasarak Mandal (ITAT Mumbai)
The Income Tax Appellate Tribunal, Mumbai Bench, examined whether exemption under Section 11 of the Income Tax Act could be denied to a registered charitable trust on account of delayed filing of audit report in Form 10B. The trust, engaged in educational activities and registered under Section 12A/12AA, had filed its return declaring nil taxable income after claiming exemption under Section 11 and also filed Form 10B on the same day, prior to issuance of intimation under Section 143(1). However, the Central Processing Centre denied the exemption and treated the gross income as taxable without considering expenses. In appeal, it was noted that no prior intimation was issued before making the adjustment under Section 143(1)(a), making such adjustment legally unsustainable. The Tribunal further examined judicial precedents cited before it, including decisions holding that filing of Form 10B is directory in nature and substantial compliance is sufficient where the report is available before completion of proceedings. It observed that in the present case, Form 10B had been filed much before processing of return and was available on record when the intimation order was passed. Following the consistent view taken in earlier Tribunal rulings on similar facts, the Tribunal held that delayed filing of Form 10B, by itself, could not justify denial of exemption where compliance was substantially met and the report was available before processing. The Revenue’s appeal was accordingly dismissed, and the assessing authority was directed to allow exemption under Section 11 after due verification in accordance with law.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
