Joygopalpur Youth Development Centre Vs ITO (ITAT Kolkata)
Form 10B Delay Not Fatal- Belated Form 10B Is Only a Procedural Lapse — ITAT Kolkata Restores Sec.11 Exemption
Assessee-society registered u/s 12AA faced denial of exemption u/s 11 because Form 10B was allegedly filed belatedly. AO treated late filing as fatal and assessed income at ₹1,13,00,961, CIT(A) mechanically upheld the denial.
Before ITAT, Assessee explained that original Form 10B was filed on 30.10.2018 (within the due date for audit report), and revised Form 10B on 27.10.2019 during assessment proceedings to correct an accountant’s mistake. Assessee also demonstrated that no payment was made to specified persons u/s 13(3), and the revised report was filed before completion of assessment.
ITAT noted:
- Requirement to file Form 10B u/s 12A r/w Rule 17B is directory, not mandatory.
- Audit report was available with AO during assessment; thus denial of exemption for a procedural lapse is unjustified.
- Followed Kolkata ITAT ruling in Saraswati Devi Educational & Social Trust, and Gujarat HC in Sarvodaya Charitable Trust (125 taxmann.com 75) holding that exemption u/s 11 cannot be denied solely on delay in Form 10B.
- Purpose of Form 10B is compliance, not revenue collection — substantial compliance existed.
Accordingly, ITAT set aside CIT(A)’s order and directed AO to grant exemption u/s 11 as claimed.
