ITAT Chennai Allows Section 11 Exemption Despite 31-Day Delay in Form 10B

G.C.T. Alumni Association Vs ACIT (ITAT Chennai)

Summary: The Income Tax Appellate Tribunal, Chennai Bench, allowed the appeal filed by G.C.T. Alumni Association for Assessment Year 2020-21 against the order of the Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-1, Bengaluru dated 29.09.2025. The assessee, a charitable trust, had filed its return of income on 09.02.2021 declaring Nil total income after claiming exemption under Section 11 of the Income Tax Act, 1961. The return was processed under Section 143(1), with income assessed at Rs.73,00,273/- after denial of the Section 11 exemption because the audit report in Form No.10B had been filed belatedly.

The assessee explained that the audit report could not be filed within the specified time because of the Covid pandemic and that it was filed immediately after the return, on 10.02.2021, resulting in a delay of 31 days. The first appellate authority did not accept the explanation because the assessee’s petition for condonation of delay under Section 119(2)(b) had been rejected.

Before the Tribunal, the assessee contended that the delay in filing Form No.10B could not by itself result in denial of exemption under Section 11. The assessee relied upon Section 13(9), submitting that the exemption could be denied on the stated grounds where the return was not filed within the due date under Section 139(1) or where the prescribed form for accumulation of income had not been submitted. The assessee also relied upon the Chennai Tribunal’s decision in Victoria Educational Trust Vs ITO, ITA No.946/Chny/2025 dated 05.08.2025.