Managingbody of Shri Haryana Gaushala Vs ITO (ITAT Delhi)
Delhi ITAT: Belated Filing of Form 10B is a Procedural Lapse; Section 11 Exemption Cannot Be Denied on Technical Grounds
The Delhi ITAT held that the delayed filing of Form 10B is only a procedural requirement and cannot, by itself, be a ground to deny exemption under section 11 to a charitable trust. Accordingly, it set aside the orders of the CPC and the CIT(A) and directed the Assessing Officer to consider the belatedly filed audit report and decide the exemption claim on merits.
The assessee, a trust registered under section 12A, had filed its return of income on 15.03.2022, but filed Form 10B only on 03.09.2024. CPC denied the exemption under section 11 as the audit report had not been furnished within the prescribed time, and the CIT(A) upheld the denial, noting that the Commissioner (Exemptions) had rejected the assessee’s application for condonation of delay.
The Tribunal observed that the legal position is now well settled that filing of Form 10B is directory and procedural, intended to facilitate assessment, and is not a mandatory condition for claiming exemption. Therefore, exemption u/s 11 cannot be denied merely because the audit report was filed belatedly.
In reaching this conclusion, the ITAT relied upon the Chennai Bench decision in Gift Trust v. ITO, which in turn followed the judgments of the Gujarat High Court in CIT v. Xavier Kelavani Mandal, the Punjab & Haryana High Court in CIT v. Shahzedanand Charity Trust, the Madras High Court in CIT v. SPIC Educational Foundation, and an earlier Delhi Tribunal decision. These authorities consistently hold that the audit report can be furnished even at a later stage before the Assessing Officer or appellate authority, and the exemption claim should be examined on merits rather than rejected on technical grounds.
Accordingly, the Tribunal allowed the appeal, set aside the impugned order, and directed the AO/CPC to take the belatedly filed Form 10B into consideration and adjudicate the assessee’s claim for exemption under section 11 in accordance with law.
Cases Discussed
- Gift Trust Vs. The ITO (ITAT Chennai), ITA No.170/Chny/2025, order dated 14.08.2025
- ITA No.302/Del/2024 (ITAT Delhi), AY 2022-23 dated 21.11.2024
- CIT vs. Xavier Kelavani Mandal (P.) Ltd. (Gujarat High Court), [2014] 41 taxmann.com 184
- CIT v. SPIC Educational Foundation (Madras High Court), TCA No.1593 of 2008 dated 12.12.2018
- CIT v. Shahzedanand Charity Trust (Punjab & Haryana High Court), [1997] 228 ITR 292
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 01.01.2025 of the Ld. Addl/JCIT(A)-2 Jaipur (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/APL/S/250/2024-25/1071767781(1) arising out of the intimation order dated 26.10.2022 u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by AO, CPC, Bengaluru, for AY: 2021-22.
