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2019 (5) TMI 1865 - AT - Income TaxExemption u/s 11 - assessee failed to file audit report in form 10B alongwith return of income as per the provisions of sect ion 12(1) (b) - HELD THAT - We note that the assessee obtained the copy of the audit report in Form 10B on 13.08.2014 and the return of income was filed by the assessee on 30.09.2014. It was also brought to our notice that the assessee had suo-moto uploaded the audit report in Form 10B on 15.06.2015 which was successfully uploaded and the CPC, Bangalore has processed the return of income of the assessee only on 16.03.2016. Thus, the requirement of law that the assessee shall have its account audited has been complied within the time prescribed by the statute since the assessee has obtained the audit report in Form 10B on 13.08.2014 before the return of income was filed thereafter only on 30.09.2014. We note that the assessee has audited its account as per law and obtained copy of the audit report in Form 10B and also taking note the Hon ble jurisdictional High Court High Courts held that the filing of furnishing the audit report along with the return of income is directory and not mandatory - See Garment Exporters Association of Rajasthan 2016 (7) TMI 709 - RAJASTHAN HIGH COURT , Bhawani Plywood (P) Ltd. 2007 (7) TMI 706 - PUNJAB AND HARYANA HIGH COURT , M/S KRISHI UPAJ MANDI SAMITI 2019 (1) TMI 1083 - RAJASTHAN HIGH COURT . - Decided in favour of assessee.
Issues:
Appeal against deletion of disallowance of exemption claim under section 11 of the Income Tax Act, 1961 due to failure to file audit report in Form 10B along with the return of income. Detailed Analysis: Issue 1: Disallowance of Exemption Claim The Revenue appealed against the deletion of the disallowance made by the Assessing Officer (AO) of the claim for exemption of a certain amount under section 11 of the Income Tax Act, 1961. The AO disallowed the claim as the audit report in Form 10B was not filed along with the return of income, as required by section 12(1)(b) of the Act. The assessee filed an application for rectification under section 154 of the Act, which was rejected by the AO, leading to the appeal before the Ld. CIT(A). Issue 2: Compliance with Audit Report Requirement The Ld. CIT(A) noted that the assessee had obtained the audit report in Form 10B before filing the return of income. The Ld. CIT(A) held that the compliance required by law, i.e., obtaining the audit report at the time of claiming exemption under section 11, had been fulfilled by the assessee. Relying on a decision of the Hon'ble Jurisdictional High Court, the Ld. CIT(A) granted relief to the assessee, leading to the Revenue's appeal before the Appellate Tribunal. Issue 3: Tribunal's Decision The Appellate Tribunal observed that the assessee had obtained the audit report before filing the return of income, meeting the statutory requirement. It was highlighted that the assessee had uploaded the audit report later, which was successfully processed by the CPC, Bangalore. The Tribunal referred to various High Court decisions where filing the audit report along with the return of income was considered directory and not mandatory. Citing these precedents, the Tribunal confirmed the Ld. CIT(A)'s order and dismissed the Revenue's appeal. In conclusion, the Appellate Tribunal upheld the decision of the Ld. CIT(A) and dismissed the appeal of the Revenue, emphasizing the timely compliance by the assessee with the statutory requirements for claiming exemption under section 11 of the Income Tax Act, 1961.
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