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TMI Blog2024 (6) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... titled 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... involved into educational activity and duly registered u/s 12AA vide order dated 19.08.2019. It is pertinent to mention that the order of AO was passed on 02.03.2021 and the order of Ld CIT (A) was passed on 19.01.2024 i.e. much after receiving registration certificate u/s. 12AA of the Act. As per assessee, he was entitled to claim exemption u/s. 10(23C) (iiiad) of the Act, but mistakenly claimed exemption u/s. 11 of the Act. For better clarity and objective analysis of the issue, we are reproducing herein below the provisions of section 139(4A) of the Act as under:- Section - 139, Income-tax Act, 1961 - FA, 2023 Return of income. 139. "(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 11 and section 12 of the Act. The specified date for A.Y. 2018-19 was 30.09.2018 later extended to 15.10.2018. As per Rule 12(2) of the Rules, such audit report is to be furnished electronically. The failure to furnish such report in the prescribed from along with the return of income results in disentitlement of the trust or institution from claiming exemption under sections 11 and 12 of the Act. 5. The appellant is a registered charitable trust. It filed revised return on 31.10.2018 (as against due date for filing 15.10.2018) declaring Nil income. As per the appellant, the claim of exemption u/s. 11 was denied in the intimation dated 31.01.2020 due to late filing of audit report in Form No. 10B. It is also noted from the submission of the appellant that Form No. 10B was electronically uploaded on 14.10.2019. From the above details, it is clear that Form No. 10B was not filed by the appellant along with the return of income as required under section 12A (1) (b) of the Act. But the same was filed before the processing of return u/s. 143(1) (a) of the Act. Therefore, the CPC incorrectly denied the exemption in the intimation. In the absence of the audit report in Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise of the power conferred under section 119(2) of the Act, the Central Board of Direct Taxes vide circular no. 10/2019 dated 22 march, 2019 and circular no. 28/2019 dated 27th September, 2019 both issued vide F. No. 197/55/2018- ITA- I has directed that:- i. The delay in filing of Form no. 10B for A.Y. 2016-17 and A.Y. 2017-18, in all such cases where the audit report for the previous year has obtained before the filing of return of income and has been furnished subsequent to the filing of the return of income but before the date specified under section 139 of the Act is condoned. ii. In all other cases of belated application in filing Form No. 10B for years prior to A.Y. 2018-19, The commissioner of Income Tax are authorised to admit and dispose off by 31.03.2020 such applications for condonation of delay u/s. 119(2) (b) of the Act. The commissioner will while entertaining such belated application in filing Form No. 10B shall satisfy them-selves that the assessee was prevented by reasonable cause from filing such application within the stipulated time. In addition to the above, it has also been decided by the CBDT that where there is delay of up to 365 days in filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Practice. 7. In view of above circulars, it can be reasonably interpreted 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. To strengthen our view we relied upon the following judicial pronouncements of coordinate benches and the Hon'ble High Courts as under: 1. [2024] 161 taxmann.com 544 (Ori.) Oneness Educational and Charitable Trust v. CIT (E) 2. [2024] 162 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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