2024 (5) TMI 454 - AT - Income Tax

Exemption u/s 11 - Claim denied on account of delay in filing of the audit report in Form 10B - HELD THAT - Considering CBDT firstly came up with a Notification dt. 03/01/2020 authorising the Commissioners to admit applications of condonation of delay in filing Form No. 10B for AY 2018-19 and subsequent AY, where there is a delay of up to 365 days. Subsequently on 19/07/2022 i.e., after the end of the Covid Pandemic restrictions again a Circular 16/2022 was issued where the delays in filing of Form 10B beyond 365 days but upto three years were also directed to be considered for admitting the application for condonation of delay. This Circular in itself shows that the Income-tax Department was aware about the technical glitches and the problems faced by the tax-payers in furnishing various types of Forms including Form No. 10B is with regard to the furnishing of audit report in case of Trusts and Societies. In the instant case since, delay is merely 28 days, we find that the said delay deserves to be ignored in larger interest of justice. The assessee is thus entitled to claim exemption u/s 11 of the Act made in the Income-tax return e-filed by it. We further fund support from the decisions of Bangarh Educational Welfare Trust 2022 (1) TMI 1321 - ITAT KOLKATA wherein also similar issue was raised for AY 2018-19 and the return was filed within time limit prescribed u/s 139(1) of the Act but there was a delay in furnishing of the audit report on Form 10B and this Tribunal after considering the facts of the case as well as judicial precedents allowed the benefit of Section 11 12 of the Act to the assessee. We allow the benefit of Section 11 to the assessee as claimed in the income tax return. Accordingly, the effective grounds raised by the assessee are allowed.

Summary

Issues Involved:
The denial of benefit u/s 11 of the Income Tax Act due to a delay in filing the audit report in Form 10B.

Summary:
The Appellate Tribunal ITAT Kolkata heard an appeal by the assessee against the order of the Commissioner of Income Tax (Appeals) concerning the denial of the benefit of Section 11 of the Act for the Assessment Year 2020-21 due to a delay in filing the audit report in Form 10B. The assessee, a public charitable trust, faced a delay of 28 days in uploading the audit report, attributed to technical glitches and changes in filing procedures during the Covid pandemic. The assessee filed the income tax return within the due date but uploaded the audit report late. The Tribunal considered the Circulars issued by the CBDT allowing condonation of delay in filing Form 10B beyond 365 days, indicating awareness of technical issues faced by taxpayers. Relying on precedents and considering the delay insignificant, the Tribunal allowed the benefit of Section 11 to the assessee, emphasizing the larger interest of justice. The decision was consistent with a previous case where a similar issue was resolved in favor of the assessee. Consequently, the appeal was allowed, granting the benefit of Section 11 to the assessee as claimed in the income tax return.

Separate Judgment:
No separate judgment was delivered in this case.