Masoomeen Education Society Vs CIT (ITAT Pune)
ITAT Pune Condoned Delay, Ruled Late Audit Report Filing Not Fatal to Charitable Trust Exemption
The ITAT Pune, in the appeal filed by Masoomeen Education Society Vs CIT, addressed two primary issues: the condonation of a significant delay in filing the appeal and the disallowance of the application of income for charitable purposes due to the late submission of the audit report in Form 10B.
Condonation of Appeal Delay
The appeal itself was filed with a delay of 323 days. The assessee attributed this delay to the non-communication of the impugned order by the earlier tax consultant, who had received the order via email. Recognizing that assessees often depend on tax consultants for appeal filing, and finding that the delay was not intentional but due to sufficient cause, the Tribunal condoned the 323-day delay. This decision followed the principles established by the Supreme Court in cases like Collector, Land Acquisition vs. Master Katiji and Others and Inder Singh Vs State of Madhya Pradesh.
Validity of Late Form 10B Submission
The sole grievance of the assessee was the disallowance of the application of income incurred for charitable purposes, amounting to ₹39,95,991/-, solely because the audit report in Form 10B was not furnished within the prescribed time limit for the Assessment Year (A.Y.) 2018-19. The Central Processing Centre (CPC) had passed an order under Section 143(1)(a) of the Act dated March 4, 2020, making this adjustment. The assessee is a charitable trust operating a school and incurred expenses of ₹35,20,913/- towards administration and management, and capital expenditure of ₹4,75,078/-.
