Balaji Educational and Cultural Trust Vs ITO (ITAT Panaji)
Summary: ITAT Panaji allowed the appeal of Balaji Educational and Cultural Trust for Assessment Year 2023-24 and held that exemption under Section 11 of the Income Tax Act, 1961 could not be denied merely because of delay in filing the audit report in Form No. 10B. The assessee, a charitable trust, filed its return of income on 28 November 2023, before the extended due date, declaring income of Rs.18,000 after claiming exemption under Section 11. Form No.10B was also filed on 28 November 2023, though there was an admitted delay in furnishing the audit report within the prescribed period. CPC denied the exemption while processing the return under Section 143(1), and the CIT(A) affirmed that action.
The Tribunal observed that Coordinate Benches have consistently treated the requirement of filing Form No.10B within the prescribed time as directory and procedural in nature. It relied upon Vardhman Stanakvasi Jain Shravak Trust Vs ITO, where exemption under Sections 11 and 12 was held not deniable merely because Form No.10B was filed late but before conclusion of appellate proceedings. The Tribunal also relied upon Premprakash Ashram Trust Vs ITO. Since Balaji Educational and Cultural Trust had filed Form No.10B along with its return and before the Section 143(1) intimation, the Tribunal reversed the CIT(A)’s finding and allowed the assessee’s appeal.
Cases Discussed
- Vardhman Stanakvasi Jain Shravak Trust Vs Income-tax Officer (ITAT Ahmedabad) — [2025] 172 taxmann.com 165 (Ahmedabad – Trib.), dated 14.02.2025
- Premprakash Ashram Trust Vs ITO (Exemption) (ITAT Surat) — ITA No. 284/Srt/2024, dated 17.05.2024
- CIT Vs Gujarat Oil & Allied Industries (Gujarat High Court) — (1993) 201 ITR 325 (Guj)
- Gujarat Paghuthan Energy Corporation (P) Ltd. Vs DCIT (Gujarat High Court) — 225 Taxman 70 (Guj)
- Zenith Processing Mills Vs CIT (Gujarat High Court) — 219 ITR 721 (Guj)
- CIT Vs Sakal Relief Fund (Bombay High Court) — (2017) 81 taxmann.com 396 (Bombay)
FULL TEXT OF THE ORDER OF ITAT PANAJI
The captioned appeal at the instance of assessee pertaining to A.Y. 2023-24 is directed against the order dated 08.12.2025 framed by Addl./JCIT(A)-1, Pune arising out of Intimation Order dated 19.11.2024 passed u/s.143(1) of the Income Tax Act, 1961 (in short ‘the Act’).
2. The grievance of the assessee is that exemption u/s.11 of the Act has been denied for delay in submitting Form No.10B.
3. We have heard the rival contentions and perused the record placed before us. We notice that assessee is a Charitable trust and return of income for A.Y. 2023- 24 was filed on 28.11.2023, i.e. before the extended date of filing the return of income declaring income of Rs.18,000/- after claiming exemption u/s.1 1 of the Act. Assessee was required to file Audit Report on Form No.10B one month prior to the date of filing the return of income. Admittedly, there is delay in filing Audit Report on Form No.10B along with return of income on 28.11.2023. For the said delay, CPC denied the benefit of exemption u/s.11 of the Act. Subsequently, ld. CIT(A) also affirmed the action of CPC.
4. The issue in the instant case in no long res integra as the various Coordinate Benches have been consistently holding that filing of Audit Report on Form No.10B is directory in nature and even if the same is filed at the appellate stage, the benefit of exemption u/s.11 cannot be denied to the assessee.
5. In this connection, we quote the decision of Coordinate Bench, Ahmedabad in the case of Vardhman Stanakvasi Jain Shravak Trust vs. Income- tax Officer [2025] 172 taxmann.com 165 (Ahmedabad – Trib.) [14-02-2025], the ITAT held that delay in submission of Form No. 10B is a procedural defect, hence, where assessee had filed Form No. 10B before Commissioner (Appeals) before conclusion of appellate proceedings, exemption under sections 11 and 12 could not be denied to assessee only on account of late filing of Form No. 10B.
6. In yet another case Coordinate Bench, Surat dealing with an identical issue in the case of Premprakash Ashram Trust vs. ITO in ITA No. 284/Srt/2024 for A.Y. 2018-19 vide order dated 17.05.2024 the Tribunal observed as under:
“4. We have considered the submissions of both the parties and perused the record carefu lly. There is no dispute that the assessee- trust is having registration under section 12A/12AB of the Act. The assesse filed return of income on 29/08/2018. In the computation of income, the assessee claimed application of income under section 11/12 of the Act. The return of income was filed within the time allowed under section 139(1) of the Act. The return of income was processed by CPC Bangalore vide order dated 26.09.2019. The CPC while processing return of income disallowed exemption of Rs. 15,48,619/- . We find that the assessee uploaded audit report under Form 10B dated claimed that the audit report was obtained before filing return of income. There is no material to disbelieve the contention of the ld AR for the assessee that audit report was obtained well in time. We also find that audit report was filed/ uploaded on ITBA portal before adjudication of appeal by ld CIT(A). Therefore, considering the decisions of Hon’ble Jurisdictional High Court in CIT Vs. Gujarat Oil & Allied Industries (1993) 201 ITR 325 (Guj), Gujarat Paghuthan Energy Corporation (P) Ltd. Vs DCIT 225 Taxman 70 (Guj) and Zenith Processing Mills vs CIT 219 ITR 721 (Guj) and the decision of Hon’ble Bombay High Court in CIT Vs Sakal Relief Fund (2017) 81 taxmann.com 396 (Bombay) that uploading of audit report is a procedural provision and should not be construed as mandatory, hence, we direct the Assessing Officer to verify the fact and allow appropriate relief to the assessee by foll owing the aforesaid decisions. Needless to direct that before passing the order, the Assessing Officer shall grant opportunity of hearing to the assessee. In the result, the grounds of appeal raised by the assessee is allowed.
5. In the result, this appeal of assessee is allowed.”
7. Respectfully following the decisions cited (supra), we hold that the assessee cannot be denied the benefit of exemption for which it is entitled merely on the lapse of procedural requirement i.e. delay in filing the audit rep ort in the prescribed form. In the present case, assessee filed the Audit Report on Form No.10B along with return of income on 28.11.2023 which is prior to the passing of Intimation u/s.143(1) of the Act and therefore the assessee cannot be denied exemption u/s.11 of the Act. Finding of ld.CIT(A) is reversed and grounds of appeal raised by the assessee are allowed.
8. In the result, the appeal of the assessee is allowed.
Order pronounced on this 21st day of August, 2026.
