Gajanan Maharaj Shegaon Mandir Vishwasth Mandal Vs Exemption Ward (ITAT Pune)
Pune ITAT: Section 11 Exemption Cannot Be Denied Merely for Belated Filing of Form 10B-Audit Report Filed During Appellate Proceedings Is Sufficient Compliance
The Pune ITAT granted Section 11 exemption to a charitable trust despite belated electronic filing of Form 10B, holding that where the audit report was available and was filed during the pendency of appellate proceedings, the exemption could not be denied merely on account of the procedural delay.
The assessee was a public charitable trust registered under Section 12A and the Bombay Public Trusts Act. It filed its return declaring nil income after claiming exemption under Section 11, including actual application of ₹86.93 lakh and accumulation of ₹47.91 lakh under Section 11(2). CPC, however, processed the return under Section 143(1) and assessed ₹1.43 crore, effectively taxing the entire voluntary donations credited to the Income & Expenditure Account.
The controversy arose because Form 10B, though signed by the auditor on 06.10.2016, was electronically filed only on 04.09.2018, while Form 10 for accumulation was filed on 21.06.2019. The Addl./JCIT(A) treated timely filing of Form 10B as a mandatory statutory condition and upheld denial of Section 11 exemption, relying upon the Supreme Court judgment in PCIT v. Wipro Ltd.
The ITAT disagreed. It relied upon the Pune Bench decision in Indian Medical Association, Pune Branch v. DCIT(E), which in turn followed the Gujarat High Court judgment in CIT v. Laxmanarayan Dev Shrishan Seva Khendra. The Gujarat High Court had held that where a charitable trust had filed Form 10B electronically during the pendency of appellate proceedings along with audited financial statements, the delay deserved to be condoned.
Significantly, the Tribunal noted that the Gujarat High Court had specifically distinguished the Supreme Court decision in Wipro Ltd. Thus, the CIT(A)’s reliance upon Wipro to treat the delayed filing of Form 10B as fatal to the charitable exemption was misplaced in the circumstances of the case.
Applying these principles, the Pune ITAT held that the Addl./JCIT(A) erred in denying Section 11 exemption merely because Form 10B had been filed belatedly. It set aside the appellate order and directed the AO/CPC to allow the assessee’s claim of exemption under Section 11.
Since Section 11 exemption itself was allowed, the assessee’s alternative contention that only net income and not gross receipts could be taxed became academic and was therefore not adjudicated. The appeal was partly allowed.
Key principle: Belated uploading of Form 10B is not necessarily fatal to Section 11 exemption where the audit has been completed and the audit report is furnished during the pendency of appellate proceedings. A substantive charitable exemption should not be denied merely because of such procedural delay; the Supreme Court ruling in Wipro does not automatically govern such cases.
Cases Discussed:
- Indian Medical Association, Pune Branch vs. DCIT(E) (ITAT Pune),ITA No.761 to 766/PUN/2025,dt.31-07-2025
- CIT vs. Laxmanarayan Dev Shrishan Seva Khendra (Gujarat High Court),(2024) 167 taxmann.com 548 (Guj)
- PCIT vs. Wipro Ltd. (Supreme Court),[2022] 446 ITR 1(SC)
- Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) (Gujarat High Court),Special Civil Application No.6097 of 2020 decided on 09th December, 2020
- Social Security Scheme of GICEA (Gujarat High Court),supra
FULL TEXT OF THE ORDER OF ITAT PUNE
The appeal filed by the assessee is directed against the order dated 31-12-2025 of the Ld. ADDL/JCIT(A)-3, Ahmedabad, u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2016-17.
