Jhaiji Shikshan Samiti Vs DCIT (ITAT Raipur)
Conclusion: Where a charitable institution filed its return of income within the extended due date under Section 139(4A) and furnished audit report in Form 10B (Rule 17B) on the next day but still within the extended due date prescribed under Section 12A(1)(b) r.w.s. 44AB, denial of exemption under Sections 11 and 12 on the ground that audit report was not filed “along with” return of income was unsustainable.
Held: A charitable institution filed its income tax return on October 27, 2018. It then filed the mandatory audit report in Form 10B on the very next day, October 28, 2018. The extended due date for filing the return, as notified by the CBDT, was October 31, 2018. The Assessing Officer denied the trust’s claim for tax exemption. The sole reason for the denial was that the audit report was furnished subsequent to the filing of the income tax return, which the officer viewed as a non-compliance with the provisions of section 12A(1)(b). CPC processed return u/s 143(1) denying exemption u/s 11 & 12 solely on ground that Form 10B was not filed along with return. Rectification u/s 154 was rejected. CIT(A) upheld CPC’s action. The issue arose for consideration was whether exemption u/s 11 & 12 could be denied when audit report in Form 10B was filed after return but within the extended due date. It was held that as per Section 12A(1)(b) requires audit report to be furnished “by that date” i.e., the due date u/s 44AB read with Section 139, including extensions granted by CBDT. Both return and Form 10B were filed within extended due date (31.10.2018). Thus, substantive compliance was achieved. Filing of audit report after the return but before expiry of due date could not be construed as fatal non-compliance. Denial of exemption on technical ground was unjustified. Consequently, the order denying the exemption was set aside, and assessee was allowed the benefit of sections 11 and 12.
