Case Law Details
Tarun Shiksha Avam Jan Seva Samiti Vs ITO (ITAT Jaipur)
Background of the Case
The assessee, a trust, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur, challenging the order of the Commissioner of Income Tax (Appeals) dated 13.02.2025. The appeal was filed with a delay of 84 days. The Secretary of the trust explained through an affidavit that the delay occurred because his father was undergoing cancer treatment, requiring frequent travel between Tonk and Jaipur, which prevented timely compliance. The Tribunal accepted the explanation as sufficient cause and condoned the delay.
Issue Before the Tribunal
The primary dispute concerned the denial of exemption under Section 11 of the Income Tax Act, 1961. The exemption was denied while processing the return under Section 143(1) solely because Form 10B, the prescribed audit report, was allegedly filed late. Consequently, the entire gross receipts of ₹31,33,867 were taxed, and interest under Sections 234A, 234B, 234C, and 234F was also charged.
Assessee’s Contentions
The assessee argued that Form 10B had been filed on 07.10.2022, whereas the return for Assessment Year 2021-22 was processed under Section 143(1) only on 25.10.2022. Therefore, the audit report was already available on record when the return was processed.
The assessee further submitted that several decisions of the ITAT and High Courts had held that filing Form 10B is a directory requirement. According to these decisions, if the audit report is available before the assessment or processing of the return, the exemption under Section 11 cannot be denied merely because the form was filed after the due date. It was also argued that the CIT(A) reproduced these judicial precedents but did not distinguish them before rejecting the claim on the ground that the delay had not been condoned by the competent authority.
The assessee also relied upon a Jaipur ITAT decision and a judgment of the jurisdictional High Court, both supporting the proposition that exemption cannot be denied where the audit report is available before issuance of the intimation under Section 143(1)(a).
Revenue’s Stand
The Departmental Representative relied on the order of the CIT(A). However, he could not point out any factual discrepancy in the assessee’s submissions, distinguish the judicial precedents relied upon by the assessee, or cite any contrary decision of the jurisdictional High Court or the Supreme Court.
Tribunal’s Findings
The Tribunal held that the denial of exemption under Section 11 solely because Form 10B was filed after the prescribed time was unjustified where the audit report had already been filed before the return was processed under Section 143(1). It observed that the Revenue had not disputed the relevant facts or the legal position relied upon by the assessee.
Accordingly, the Tribunal directed that the assessee be granted exemption under Section 11 of the Income Tax Act.
Outcome
The ITAT condoned the delay of 84 days in filing the appeal, allowed the appeal, and directed the Revenue to grant the exemption under Section 11, holding that denial of exemption merely due to delayed filing of Form 10B, despite its availability before processing of the return, was not justified.
Appellant was represented by: Sh. Devang Gargieya, Adv.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax (Appeal), Addl/JCIT (A)-6 Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 13.02.2025 u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. The appeal is delayed for filing by 84 days. The assessee is a trust and the Secretary of the trust has filed an application seeking condonation of the delay by way of an affidavit stating that his father was undergoing treatment for Cancer during the period March 25 to April 25, and because of this medical emergency, the appeal against the order passed by the Ld. CIT(A) on 13th February 2025 could not be filed on or before 30th of April, 2025, and was filed with a delay of 84 days on the 23rd of July, 2025,since the Secretary was required to attend to his father on frequently travel between Tonk and Jaipur, and therefore, could not devote adequate attention to the trust-related compliance work.
3. Considering the averments of the assessee as above, stated on oath before me, I find that there was sufficient cause for the delay in filing of the present appeal before me of 84 days and accordingly, condone the delay.
4. Taking up the appeal for hearing, the grounds raised by the assessee read as under:-
1. The Id. CIT erred in law as well as on the fact of the case in confirming the impugned additions and disallowances made in the intimation u/s 143(1) of the Act dated 13.02.2025, which are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.
2. Rs. 31,33,867/-: The Id. CIT erred in law as well as on the facts in confirming the taxing of the entire gross receipts of Rs.31,33,867/- simply for reason that Form 10B was filed late merely on technical grounds but ignoring the other substantial fact available on record. Include the additions made is against the concept of income and also merely based on technical glitches. Such the impugned additions thus, being contradictory to the provisions of law & facts deserves to be deleted in full.
3. The ld. CIT further erred in law as well as on the facts of the case in confirming the addition on the ground that there was delay in uploading the audit report in Form 10 B which is completely contrary to the facts on record as it was not a case of delayed filing of the audit report. Hence the addition so made and confirmed on this basis being bad in law and facts of the case the entire disallowance is deserves to be deleted in full.
4. The ld. CIT further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B, 234C & 234F of the Act. The appellant totally denies its liability of charging and withdrawal of any such interest. The interest so charged/withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full.
5. Ld. Counsel for the assessee pointed out that the solitary issue in the present appeal pertained to denial of grant of exemption claimed by the assessee of its income u/s 11 of the Act in the intimation made u/s 143(1) of the Act solely on account of the delay in filing requisite From 10B.
6. Ld. Counsel for the assessee pointed out that the requisite form was filed by the assessee belatedly on 07.10.2022 while the return of income for the impugned year i.e. AY 2021-22 was processed u/s 143(1) of the Act on 25.10.2022. He contended therefore that the Form 10B was duly available at the time of processing of return of the assessee u/s 143(1) of the Act.
7. Ld. Counsel for the assessee thereafter, stated that the Ld. CIT(A) was apprised with the proposition of law propounded in various decision of the ITAT and even High Courts, that the requirement of filing of Form 10B for claiming exemption u/s 11 of the Act was a directory requirement and as long as the said Form was available at the time of framing assessment it would suffice with the condition of filing of Form 10B and the delay if any in no way would disentitle the assessee to grant of exemption u/s 11 of the Act.
He drew my attention to the order of Ld. CIT(A) wherein, the submissions of the Ld. CIT(A) for the assessee, in this regard were reproduced citing various decisions in support of this proposition from page 9 to 15 of the order.
8. He thereafter pointed out that the Ld. CIT(A) without distinguishing the case laws referred to before him, upheld the denial of claim of exemption u/s 11 of the Act, stating that as per law, the assessee was required to get its delay in filing Form 10B condoned by the requisite Authority and in the absence of the same the assessee could not be held eligible for claim of exemption u/s 11 of the Act.
9. Ld. Counsel for the assessee further pointed out, that this issue had been dealt with the ITAT Jaipur vide its order dated 24.12.2025 in the case of Kinkini Vs. Income Tax Officer in ITA No.1185/JPR/2025 ruling in favour of the assessee, holding that as long as audit report in Form 10BB was duly filed and available on the record prior to the issuance of intimation u/s 143(1)(a) of the Act, the denial of exemption u/s 11 of the Act was not justified.
10. He also pointed out that the Hon’ble Jurisdictional High Court in the case of Khandelwal Vaishya Samaj Charitable Trust Vs. Commissioner of Income Tax (Exemptions) Civil Writ Petition No.5829/2020 dated 03.09.2025 had also laid down this proposition of law.
11. Ld. DR though heavily relied on the order of Ld. CIT(A), was unable to either point out any discrepancy in the facts pointed out by the Ld. Counsel for the assessee before me nor was he able to distinguish the proposition of law relied upon by the Ld. Counsel for the assessee before me. He was unable to point out any contrary decision of either of the Jurisdictional High Court or the Hon’ble Apex Court in this regard.
12. In view of the same, I hold that the denial of grant of exemption u/s 11 to the assessee in the facts of the present case solely for the reason that Form 10B was filed delayed, though the facts revealed that the Form 10B was filed before the return of the assessee was processed u/s 143(1) of the Act, is unjustified and against the law. Accordingly, I direct the assessee to be granted exemption u/s 11 of the Act.
13. In effect, the appeal of the assessee is accordingly allowed.
Order pronounced in the open court on 25.06.2026
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