Jogniya Mata Shaktipith Vs ITO (ITAT Jodhpur)
The appeal concerned the denial of the assessee’s claim for exemption under Section 11 of the Income Tax Act, 1961 for alleged late filing of Form 10B for assessment year 2022-23. The assessee was an institution/trust registered under Section 12A. It filed its return of income claiming exemption under Section 11, while the audit report in Form 10B was furnished along with the return rather than within the prescribed statutory time limit. While processing the return under Section 143(1)(a), the Centralized Processing Centre (CPC) denied the exemption on account of delayed filing/uploading of Form 10B.
The assessee challenged the denial before the First Appellate Authority, but the appeal was dismissed on the ground that the jurisdiction to condone the delay lay with CIT(E). Before the Tribunal, it was noted that the audit report in Form 10B had been furnished along with the return. The order records the return date as 21.12.2022 in paragraph 4, while paragraph 3 states that the return was filed on 31.12.2022. The return was processed by CPC on 28.07.2023. Thus, the Tribunal found that the Form 10B report was available with CPC well before the processing of the return.
The Tribunal observed that it is fairly well settled that even where there is delay in furnishing Form 10B, exemption under Section 11 cannot be denied solely on that ground where the audit report is available at the time of assessment or processing of the return. It relied upon Kinkini Vs. ITO, Association of Indian Panel Board Manufacturer Vs. CIT and Raniwala Jewellers Private Limited Vs. ACIT.
Following the ratio stated in those precedents, the Tribunal directed the Assessing Officer to allow the assessee’s claim of exemption under Section 11, subject to fulfilment of the other conditions of that provision.
The Tribunal further noted that after denial of the Section 11 exemption, the entire receipts had been treated as income without allowing any deduction. It observed that denial of exemption under Section 11 does not mean that the income of the assessee cannot be computed on commercial principles.
Accordingly, the Tribunal allowed the appeal and directed allowance of the Section 11 exemption subject to fulfilment of the other statutory conditions. The order was pronounced in the open court on 07.08.2026.
Cases Discussed
- Kinkini Vs. ITO (ITAT), (ITA No. 1185/JPR/2025), order dated 24.12.2025
- Raniwala Jewellers Private Limited Vs. ACIT (ITAT), (ITA No. 10/JPR/2025), order dated 06.05.2025
- Association of Indian Panel Board Manufacturer Vs. CIT, [2023] 157 com 550
Assessee Represented by Shri Mahendra Gargieya (Advocate)
FULL TEXT OF THE ORDER OF ITAT JODHPUR
This appeal by the assessee arises out of order dated 12.12.2024 passed by Additional Commissioner of Income Tax (Appeal) for the assessment year 2022-23.
2. The dispute in the present appeal, basically relates to disallowance of assessee’s claim of exemption u/s 11 of the Income Tax Act, 1961 for alleged late filing of Form 10B.
3. Briefly the facts are, the assessee is an institution/trust registered u/s 12A of the Act. For the assessment year under dispute, assessee filed its return of income on 31.12.2022 claiming exemption u/s 11 of the Act. However, the audit report in From 10B was not filed within the statutory time limit but along with the return of income. While processing the return of income u/s 143(1)(a) of the Act, the Centralize Processing Centre (CPC) did not allow assessee’s claim of exemption due to late filing/uploading of Form 10B. Though, the assessee challenged the denial of exemption u/s 11 of the Act by filing an appeal before the First Appellate Authority, however, the appeal was dismissed on the ground that the jurisdiction for condonation of delay lies with CIT(E).
4. We have considered rival submissions and perused the materials on record. Admittedly, along with the return of income filed on 21.12.2022 the assessee had furnished the audit report in Form 10B. Whereas, the return of income was processed by CPC much after on 28.07.2023. Thus, it is a fact on record that much prior to the processing of return of income, the audit report in Form 10B was available with the CPC. Now, it is fairly well settled that even if there is delay in furnishing the audit report in Form 10B, however, if such report is available at the time of assessment or processing of return of income, assessee’s claim of exemption u/s 11 cannot be denied solely on the ground of delay in filing the audit report. In this context we may refer to the following decisions:
- Kinkini Vs. ITO (ITA No. 1185/JPR/2025), order dated 24.12.2025
- Association of Indian Panel Board Manufacturer Vs. CIT [2023] 157 com 550
- Raniwala Jewellers Private Limited Vs. ACIT (ITA No. 10/JPR/2025), order dated 06.05.2025
5. Though Ld. Counsel for the assessee has cited various other decisions, however, to avoid multiplicity we refrain from referring to them. Therefore, respectfully, following the ratio laid down in aforesaid judicial precedents, we direct the Assessing Officer to allow assessee’s claim of exemption u/s 11 of the Act, subject to, fulfillment of other conditions of the said provision. Even otherwise also, it has been noted by us that after denial of assessee’s claim of exemption u/s 11 of the Act, the entire receipt has been treated as income of the assessee without allowing any deduction. This, in our view, is wholly unacceptable. Denial of exemption u/s 11 of the Act does not mean that the income of the assessee cannot be computed on commercial principles.
6. In the result, the appeal is allowed.
Order pronounced in the open court on 07/08/2026.
