Rotary Club of Bombay Queens Necklace Charitable Trust Vs ITO (Exem.) (ITAT Mumbai)
The assessee, a public charitable trust registered under the Maharashtra Public Trusts Act, 1950 and Section 12AB of the Income Tax Act, filed its return of income for Assessment Year 2023–24 claiming exemption under Sections 11 and 12. The return was filed within the extended due date, declaring a nominal income and claiming a refund. However, the audit report in Form No. 10B, required under Section 12A(1)(b), was filed with a delay of 29 days beyond the extended due date of 31.10.2023, though it was submitted before filing the return and prior to its processing.
The Centralized Processing Centre (CPC) processed the return under Section 143(1) and denied exemption under Sections 11 and 12 solely on account of the delayed filing of Form 10B. This resulted in substantial additions of Rs. 31.31 lakh and a tax demand after adjusting the refund. The CIT(A) upheld this denial, leading to the appeal before the Tribunal.
The assessee explained that the delay occurred due to the late release of the new Form 10B utility and schema in August and September 2023, which required extensive compilation and verification of information. It was also submitted that accountants faced practical difficulties in timely compliance. The assessee emphasized that the audit report was filed before submission of the return and was available on record during processing. It argued that the requirement is procedural and substantial compliance was achieved.
