Ramalingeswara Swamy Temple Vs ITO (Exemptions) (ITAT Hyderabad)
The issue arose because the temple filed its audit report in Form 10BB on 28.11.2023, while the due date was 31.10.2023—a delay of 28 days. The CPC processed the return u/s 143(1) & disallowed exemption u/s 11, resulting in assessed income of ₹1.13 crore. The CIT(A) upheld the denial, relying on the Supreme Court’s ruling in Wipro Ltd. that stressed the mandatory nature of timelines for filing statutory declarations.
Tribunal observed that there is no dispute with regard to the fact that, the appellant is a religious institution under the management & administrative control of Endowment Department of the Govt. of Telangana & is registered u/s 12A & 12AA. Assessee has claimed exemption u/s 11 & filed relevant audit report in Form 10BB on 28/11/2023 along with the return of income filed for the impugned A.Y. Audit report in Form 10BB is filed beyond the due date provided under the Act. The due date for filing the audit report for the year under consideration was 31/10/2023. whereas the appellant has filed the audit report on 28/11/2023. Admittedly, there is a delay of 28 days in filing Form 10BB. But, the said audit report was filed before AOpassed the assessment order u/s 143(1) on 19/11/2024. No doubt, the assessee needs to file audit report on or before the due date in order to get the benefit of exemption u/s 11 . However, in a case where the assessee has filed the audit report with a small delay of 28 days & further when such audit report was filed before AO who passed the assessment order, AO ought to have taken a lenient view going by the facts of the case to consider the claim of the assessee for exemption u/s 11 . This legal position is supported by the decision of Sardeivatha Education Trust vs ITO (E) (2024) 166 Taxmann.com 524 (Bang.Trib) wherein it was held that filing of Form 10BB was not mandatory but directory & that when audit report was available while passing intimation u/s 143(1) & requirement of law were complied with, exemption u/s 11 should not be denied to the assessee. The Hon’ble High Court of Telangana in the case of Shilparamam Arts, Crafts & Cultural Society vs, Addl./Jt./ACIT (2024) 468 ITR 350 had considered an identical issue & held that, where the assessee trust filed its return of income for the relevant A.Y on due date but, uploaded Form 10BB belatedly i.e. 2 ½ years before the assessment order was passed, application for condonation of delay in filing Form 10BB ought to have been decided by the CIT by taking a liberal approach. The sum & substance of ratio laid down by the Hon’ble High Court of Telangana & the ITAT Bangalore Bench of the Tribunal that, if audit report in Form 10BB was made available to AO before he passes his assessment order, then merely for the reason of delay in filing the relevant report, exemption claimed u/s 11 cannot be denied.In this casee assessee has filed return of income on or before the due date on 28/11/2023 & also filed audit report in Form 10BB on the very same day i.e. on 28/11/2023. Although, there is a small delay of 28 days in filing the audit report but, such audit report was made available to AO when he passed order u/s 143(1) on 19/11/2024. Therefore, AO ought not to have denied exemption u/s 11 . CIT (A) without considering the relevant facts has simply upheld the additions made by AO by rejecting exemption u/s 11 . Tribunal directed AO to allow exemption claimed u/s 11 & deleted the additions.
