ITO Vs P K Krishnan Educational Trust (ITAT Mumbai)
ITAT Mumbai dismissed the Revenue’s appeal and upheld the relief granted to P K Krishnan Educational Trust in respect of exemption under Section 11 of the Income-tax Act, 1961 for AY 2021-22. The assessee was an educational trust registered under Section 12A. It filed its return declaring nil income on 14.03.2022 and revised the return on 29.03.2022 at the same income. Form No. 10B was furnished on the dates of filing of the original and revised returns. The CPC nevertheless passed an order under Section 154 on 07.03.2023 on the footing that Form No. 10B/10BB had not been filed in time and denied the Section 11 exemption, determining income at ₹4,09,21,499.
The assessee challenged the rectification before the CIT(A), contending that Form No. 10B had in fact been filed and its acknowledgement was available. The CIT(A) examined the original and revised returns, Form 10B and the orders under Sections 143(1) and 154. The CIT(A) noted that Section 12A(1)(b), read with Explanation (ii) to Section 44AB, prescribed the specified date for furnishing the audit report, but relied upon judicial authorities treating the requirement as procedural/directory. The authorities cited included Sarvodaya Charitable Trust Vs ITO (Exemption), CIT Vs Hardeodas Agarwalla Trust, Shree Bhairav Seva Samiti v. ITO (Exemption), CIT v. Xavier Kalavani Mandal (P.) Ltd. and Shri Shyam Charan Sewa Trust Vs DCIT. The CIT(A) concluded that the assessee could not be denied Section 11 exemption on the facts and directed the Assessing Officer to allow it.
