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2023 (7) TMI 293 - AT - Income TaxExemption u/s. 11 - late filing of Audit Report u/s. 12A(1)(b) in the prescribed Form 10B - As per assessee it is a sufficient compliance with the procedure, if the Audit Report u/s. 12A(1)(b) is filed at any stage before the completion of assessment or even at the appellate stage - whether it is permissible to the assessee to produce the audit report at the appellate stage? - HELD THAT - As decided in the case of CIT Vs. Gujarat Oil Allied Industries Ltd. 1992 (9) TMI 67 - GUJARAT HIGH COURT the provisions regarding furnishing of audit report along with the return has to be treated as a procedural provision. It is directory in nature and its substantial compliance would suffice. Benefit of exemption should not be denied merely on account of delay in furnishing the same. Also see SOCIAL SECURITY SCHEME OF GICEA case 2022 (12) TMI 1172 - GUJARAT HIGH COURT No hesitation in confirming the order passed by Ld. CIT(A) who has directed JAO to verify the Form No. 10B and allow the claim of exemption u/s. 11 and compute the total income. Decided in favour of assessee.
Issues involved:
Late filing of Audit Report u/s. 12A(1)(b) leading to denial of exemption u/s. 11 of the Income Tax Act, 1961 for the Assessment Year 2017-18. Late filing of Audit Report u/s. 12A(1)(b): The appeal was filed by the Revenue against the Appellate order dated 02.09.2022 passed by the Commissioner of Income Tax (Appeals) concerning the late filing of Audit Report u/s. 12A(1)(b) in Form 10B. The assessee, a Public Charitable Trust, failed to upload the Audit Report along with the Return of Income for the Assessment Year 2017-18, resulting in the denial of exemption u/s. 11. Despite a procedural delay in submitting Form 10B due to technical issues, the assessee contended that filing the Audit Report at any stage before the completion of assessment or even at the appellate stage should suffice for compliance. The Jurisdictional High Court's judgment in CIT Vs Xavier Kelavani Mandal (P.) Ltd. supported this argument, stating that such requirements are directory in nature. The assessee also cited various High Court judgments to strengthen their case. The Ld. CIT(A) accepted the contention, allowing the exemption u/s. 11 and directing the Assessing Officer to compute the total income accordingly. The Revenue appealed the decision, questioning the condonation of the delay and allowance of the exemption. Judgment and Decision: Upon careful consideration, the Tribunal referred to the Jurisdictional High Court's decision in CIT Vs. Gujarat Oil & Allied Industries Ltd., affirming that the provision of furnishing the audit report with the return is procedural and directory in nature, with substantial compliance being sufficient. Citing the Social Security Scheme of GICEA case, the Tribunal emphasized the equitable and judicious approach required in such matters. The Tribunal upheld the Ld. CIT(A)'s order, directing the Assessing Officer to verify Form No. 10B and allow the exemption u/s. 11. Relying on the judicial pronouncements, the Tribunal dismissed the Revenue's appeal, deeming it devoid of merits. Consequently, the appeal filed by the Revenue was dismissed, affirming the decision in favor of the assessee.
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