Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 808 - AT - Income TaxIssues Involved: 1. Entitlement to exemption u/s 11/12 when the audit report (Form No. 10B) was filed after the return of income but before the first appeal. 2. The procedural requirement of filing the audit report along with the return of income. 3. The applicability of CBDT Circular No. 10/2019 regarding condonation of delay in filing the audit report. 4. The appropriate procedural route for challenging the denial of exemption. Summary: Issue 1: Entitlement to Exemption u/s 11/12 The primary issue was whether the assessee was entitled to exemption u/s 11/12 when the audit report (Form No. 10B) was filed after the return of income but before the first appeal. The Tribunal referred to the ITAT Indore decision in Indore Contract Bridge Association Vs. CPC, Bangalore, which held that the exemption u/s 11/12 cannot be denied for the mere delay in filing the audit report. The Tribunal emphasized that the requirement to file the audit report is procedural and directory, not mandatory, and that subsequent filing before the first appeal suffices. Issue 2: Procedural Requirement of Filing Audit Report The Tribunal noted that the assessee had filed the return of income on 31.08.2018, and the accounts were audited on 14.08.2018. However, the audit report was not filed with the return but was submitted later on 15.06.2023. The Tribunal cited multiple judicial decisions, including those from the ITAT and High Courts, which have consistently held that the late filing of the audit report is a procedural defect that does not justify denying the exemption u/s 11/12. Issue 3: CBDT Circular No. 10/2019 The CIT(A) had noted that the assessee did not file a petition for condoning the delay in filing the audit report as per CBDT Circular No. 10/2019. The Tribunal referred to the Hon'ble Gujarat High Court decision in Indian Panel Board Manufacturer Vs. DCIT, which clarified that the application for condonation of delay is an additional remedy and not mandatory. Therefore, the absence of such a petition does not invalidate the claim for exemption. Issue 4: Procedural Route for Challenging Denial of Exemption The CIT(A) had also pointed out that the assessee should have appealed against the intimation u/s 143(1) instead of filing rectification applications u/s 154. The Tribunal referred to the ITAT Jodhpur decision in Akbar Mohammad Vs. CPC, which held that even if the assessee chose the wrong procedural route, the tax authorities are obligated to ensure that the correct amount of tax is imposed. Therefore, the procedural misstep does not justify denying the exemption. Conclusion: The Tribunal concluded that the assessee cannot be denied the benefit of exemption u/s 11/12 for the mere delay in filing the audit report. The matter was remanded back to the AO for fresh assessment, considering the audit report filed by the assessee. The appeal was allowed for statistical purposes. Order Pronounced: The order was pronounced in the open court on 16.05.2024.
|