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2024 (6) TMI 938 - AT - Income TaxDenial of benefit u/s 11 - Form No. 10B was filed belatedly as per section 139 - HELD THAT - if the return of income by the assessee was filed within the stipulation as provided in section 139 of the Act the CIT (E) is empowered to condone the delay in filing the form no. 10B. In this case the assessee has filed the return well within the time provided in section 139 of the Act and condoning delay in form no. 10B is not an anomaly. Further as held by various courts that document i.e. form no. 10B is substantive in nature but filing of the same is procedural in nature and delay in filing of the same can t be fatal for the claim of the assessee. Here in this case the assessee filed the form no. 10B well before processing of return u/s. 143(1) (a) of the Act and passing of assessment order u/s. 143(3) of the Act in these circumstances we do not find any force in the order of the authorities below and the assessee is entitled to claim the exemption. Appeal of the assessee is allowed and the AO is directed to delete the addition and allow the exemption claimed u/s. 11 and 12.
Issues Involved:
1. Rejection of Form 10B audit report. 2. Taxation of gross receipts without allowing expenditure. 3. Rejection of exemption claim u/s 10(23C)(iiiad). 4. Impact of filing return electronically with exemption claimed u/s 11 instead of u/s 10(23C)(iiiad). Summary: 1. Rejection of Form 10B Audit Report: The assessee's appeal challenges the rejection of Form 10B audit report, which was belatedly uploaded. The Ld. CIT (Appeals) faceless erred in rejecting the audit report dated 07.09.2018 for A.Y. 2018-19, uploaded on 14.10.2019, disagreeing with the jurisdictional M.P. High Court judgment and a prior ITAT Jabalpur order. The court noted that filing of Form No. 10B is a procedural requirement and its late submission should not be a hurdle in claiming exemption u/s 11 & 12 of the Act, especially when it is filed before the finalization of the assessment. 2. Taxation of Gross Receipts Without Allowing Expenditure: The Ld. CIT (Appeals) faceless taxed the entire gross receipts of Rs. 96,45,397/- without allowing the expenditure claimed/incurred, showing NIL income u/s 10(23C)(iiiad) in the original ITR filed on 01.10.2018. The court found that the exemption was incorrectly denied by CPC in the intimation dated 31.01.2020 due to the late filing of the audit report in Form No. 10B, which was uploaded on 14.10.2019. 3. Rejection of Exemption Claim u/s 10(23C)(iiiad): The Ld. CIT (Appeals) faceless wrongly applied the case of Goetze India Ltd Vs CIT, rejecting the claim u/s 10(23C)(iiiad) despite the claim being made in the original ITR and during assessment proceedings u/s 143(3). The court emphasized that the procedural delay in filing Form No. 10B should not disentitle the assessee from claiming the exemption. 4. Impact of Filing Return Electronically with Exemption Claimed u/s 11 Instead of u/s 10(23C)(iiiad): The assessee filed the return electronically claiming exemption u/s 11 but showed NIL income u/s 10(23C)(iiiad) in part B-TI-8C. The court held that this inadvertent error should not deprive the assessee of the exemption, referencing CBDT Circular No. 14 of 1955. The court also referred to various judicial pronouncements supporting the view that procedural delays in filing Form No. 10B should not be fatal to the claim of exemption. Conclusion: The appeal of the assessee was allowed, and the AO was directed to delete the addition and allow the exemption claimed u/s 11 and 12 of the Act. The judgment emphasized that procedural requirements should not override substantive rights, and delays in filing audit reports can be condoned to avoid undue hardship. Order Pronounced: The order was pronounced in the open court on 19th June 2024.
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