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2024 (4) TMI 1202 - AT - Income TaxDenial of deduction claimed u/s 11 12 - assessee had not filed the statutory audit report in form 10B along with return of income filed u/s 139(1) - HELD THAT - Admittedly, in this case, the report in form 10BB was inadvertently filed by the auditor of the assessee along with return of income, which was later on rectified on 09.08.2023 by filing the correct report in form 10B. ITAT Ahmedabad order 2022 (7) TMI 1050 - ITAT AHMEDABAD relied on by the appellate authority was also reversed by the Hon ble High court of Gujarat 2023 (3) TMI 1374 - GUJARAT HIGH COURT well before passing the Appeal order dated 08.02.2024 and therefore, the order of the appellate authority in respect of the issue relating to the disallowance of deduction u/s 11 12 of the Act is no longer valid and therefore, the dismissal of the appeal by the CIT(A) is not correct. However, we restore this issue to the file of AO for verification of Audit Report filed by the assessee in Form 10B. and allow the exemption u/s. 11 of the Act as per law.
Issues: Appeal against disallowance of deductions u/s 11 & 12 of the Income Tax Act due to incorrect filing of audit report in form 10BB instead of form 10B. Challenge to the levy of interest u/s 234B & 234C for non-payment of advance tax.
The judgment involves an appeal against the order passed by the NFAC regarding the disallowance of deductions u/s 11 & 12 of the Income Tax Act for the assessment year 2020-21 due to the incorrect filing of the audit report in form 10BB instead of the required form 10B. The appellant, a company registered under the Companies Act with registration u/s 12A of the Act, filed the return of income on 6.11.2020 with the incorrect audit report. The appellant rectified the mistake by filing the correct form 10B on 09.03.2023. The NFAC upheld the disallowance of deductions and the levy of interest u/s 234B & 234C, citing the mandatory requirement of form 10B and previous judicial precedents. The appellant challenged the NFAC's decision, arguing for eligibility for deductions due to the inadvertent mistake, citing a reversal of a similar decision by the High Court of Gujarat in a different case. The ITAT Bangalore, after considering the submissions and evidence, acknowledged the inadvertent filing of form 10BB instead of 10B, which was later rectified by the appellant. The ITAT noted that the High Court of Gujarat had reversed a similar decision relied upon by the NFAC, rendering the NFAC's decision invalid. Consequently, the ITAT set aside the NFAC's order and directed the AO to verify the correct audit report filed in form 10B, allowing the exemptions u/s 11 of the Act as per the law. The ITAT found the dismissal of the appeal by the CIT(A) incorrect in light of the High Court's judgment. The judgment clarified that certain grounds raised were general or consequential in nature and did not require specific adjudication. The ITAT partially allowed the appeal, emphasizing the restoration of the issue of deductions u/s 11 & 12 to the AO for verification and proper consideration. The order was pronounced in open court on 16th April 2024.
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