Suigam Khodadhor Panjara Pole Vs Assistant Director of Income-tax (ITAT Surat)
In a significant ruling for charitable and religious trusts, the Income Tax Appellate Tribunal (ITAT) Surat Bench has held that an exemption under Section 11 of the Income Tax Act, 1961, cannot be denied to an assessee solely on the grounds of late filing of Form 10B (audit report), provided the form is submitted to the tax authorities before the issuance of an order or intimation under Section 143(1) of the Act.
The decision came in the appeal filed by Suigam Khodadhor Panjara Pole against an order from the Commissioner of Income Tax (Appeals), Udaipur, for the assessment year 2019-20. The assessee, a society and public trust registered under Section 12A and 80G of the Income Tax Act, runs various educational institutions. For the relevant assessment year, the assessee had filed its return of income on February 18, 2021, after the prescribed due date, declaring a NIL total income. While the audit report in Form 10B was prepared on September 29, 2019 (before the return filing), it was e-filed along with the return on February 18, 2021.
The Assistant Commissioner of Income Tax, CPC, Bengaluru, processed the return under Section 143(1) and, on December 24, 2021, disallowed the exemption claimed under Section 11, raising the total income to Rs. 26,70,63,238/-. This disallowance was primarily due to the belief that Form 10B was not e-filed at the time of filing the original return of income. The Commissioner of Income Tax (Appeals) upheld this disallowance, stating that the Assessing Officer could not allow Section 11 deductions unless directed by a court or if the CIT (Exemptions) condoned the delay under Section 119(2)(b) of the Act.
