2024 (11) TMI 1100 - AT - Income Tax

Disallowance of section 11 exemption - belated filling of form 10B audit report - Revenue s case is that this tax audit report compliance is a mandatory provision for an assessee who claims section 11 exemption - HELD THAT - The instant issue is no more res-integra in light of ACIT v. Xavier Kelvani Mandal Pvt. Ltd. 2011 (6) TMI 863 - ITAT AHMEDABAD wherein their lordships have already settled the same at rest in assessee s favour and against the department that such a compliance could be even made in first appellate proceedings before the CIT(A)/NFAC. Thus accept the assessee s instant sole substantive grievance in principle and direct the learned CIT(A)/NFAC to read-judicate the lower appeal on merits as per law preferably within three effective opportunities subject to a rider that it shall be the taxpayer s risk and responsibility only to plead and prove all the relevant facts within three effective opportunities in consequential proceedings. Assessee s appeal is allowed for statistical purpose

Summary

The appeal against the National Faceless Appeal Centre's order for assessment year 2022-23 was heard ex parte. The issue was the disallowance of section 11 exemption claim due to a belatedly filed audit report. Citing precedent, the Tribunal allowed the appeal, directing a re-adjudication by the CIT(A)/NFAC within three opportunities.