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TMI Blog2025 (1) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon & consolidated order. 3. Briefly stated facts of these cases are that; 3.1 The assessee for assessment year 2017-18 filed its return of income [for short 'ITR'] on 01/01/2018 declaring total income at Rs. 1,98,700/- after claiming exemption of Rs. 24,01,811/- u/s 11 & 12 of the Act. The ITR was summarily processed on 24/03/2019 determining total income of the assessee at Rs. 26,00,512/- u/s 143(1) of the Act on account of denial of exemption claimed u/s 11 & 12 of the Act for not accompanying audit report i.e. Form No. 10B. For assessment year 2018-19 the assessee filed its ITR on 16/06/2018 declaring NIL total income after claiming Rs. 15,71,817/- exemption u/s 11 & 12 of the Act. The said ITR was also summarily processed on 21/05/2019 determining taxable income at Rs. 15,71,817/- u/s 143(1) of the Act on account of like denial on a similar reason of failure to file audit report along with ITR which was one of the conditions precedent for claiming exemption u/s 11 & 12 of the Act. 3.2 Aggrieved assessee assailed former denial of exemptions on legal ground as well as on merits in separate appeals before first appellate authority u/s 246A(1) of the Act. The said appeals cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vowed by the Ld. AR that, the first appellate authority possess co-terminus powers with that of assessing officer, therefore filing of such audit reports any-time before culmination of such appellate proceedings should be treated as due compliance of 12A(1)(b) of the Act and thus the benefit of exemption be allowed. The entitlement can-not be taken away for technical or unintended delay in filing Form No. 10B. Au contraire, placing strong reliance on the orders of tax authorities below the Ld. DR Mr Ravindra acquiesced that, in absence of statutory provision for condoning the delay in filing audit reports, the denial of exemption on account of violation of prime condition laid u/s 12A(1)(b) of the Act is perfectly in law, ergo prayed for dismissal of appeals in limine. 5. We have heard the rival contentions; and subject to rule 18 of ITAT-Rules, 1963 perused the material placed on record and duly considered the facts of the case in the light of settled legal position which are forewarned to the respective rival parties. The sole dispute in present twin appeals encircled around denial of exemption u/s 11 and 12 of the Act for the cannonball reason of filing Form No. 10B belatedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marily processed on 24/03/2019. Thus, there was clear non-compliance with the mandatory provision of section 12(1)(b) of the Act. Therefore, we see no infirmity with the order of summary assessment passed u/s 143(1) of the Act. Insofar as the AY 2018-19 is concerned, the appellant filed its ITR on 16/06/2018 i.e., well within the due date of filing prescribed u/s 139(1) of the Act, however it was filed without accompanying therewith the required audit report. Though for the year under consideration the books of account were also audited and report thereof was issued by the auditor (supra) on 14/06/2018 however same was filed by the appellant online on dt. 27/11/2019 whereas the ITR was summarily processed on 21/05/2019. Thus, in the subsequent year also there was clear non-compliance with the mandatory provision of section 12(1)(b) of the Act. Therefore, we see no infirmity with the order of assessment passed u/s 143(1) of the Act. 8. We note that, there is no dispute over the fact that, the books of account of the appellant assessee for both the years under consideration were duly audited in terms of section 12A(1)(b) of the Act and the respective audit reports were obtained much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment' as stands u/c XIV of the Act, provides for procedures and conditions for filing of return of income, and the section 139(4A) mandates that, every person in receipt of income derived from property held under trust, i.e., Charitable or religious Trust, etc., to file its return of income in case its total income of the previous year without giving effect to the provisions of section 11 and 12 of the Act exceeds the maximum amount not chargeable to tax and in case of failure to do so, a penal action has been prescribed u/s 272A(2)(e) of the Act. On a plain reading of the relevant provisions, in our opinion, failure to file Form No. 10B along-with return u/s 139(4A) cannot be interpreted to mean that the charitable trust per se disentitles from the claim of exemption u/s 11 of the Act. On the contrary, during the impugned assessment year under appeal, there was no such provision in the Act that, in case return vis-à-vis audit report if not filed by the due date u/s 139(4A) by the Charitable Trust, then its income cannot to be computed in accordance with the provision of the Act. Albeit, clause (b) of section 12A(1) mandates every charitable trust or institution, whose tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was delay in filing the required audit reports for both the year under consideration. In a similar facts & circumstance the Hon'ble Bombay High Court in 'Shree Jain Swetamber Murtipujak Tapagachha Sangh Vs CIT(E)' [2024, WP/1321/2024] and 'Al Jamia Mohammediyah Education Society Vs CIT(E)' [2024, 162 taxmann.com 114] held that the error on the part of auditor cannot be rejected but should be accepted as a reasonable cause shown by the trust management. In that case alike the present case, assessee did not suo-motto even realize its mistake of non-filing of audit report along-with return until the intimation was served u/s 143(1) of the Act. 14. In view of the aforestated judicial precedents and for the reasons cited hereinabove; we hold that the Revenue was not justified in denying the benefit of exemption u/s 11 of the Act in pleno to the appellant trust. Consequently we set aside the orders of tax authorities below for both the years under consideration and remand both these matters back to the files Ld. AO with a direction to (a) take on record both the audit reports filed for the respective assessment years (b) treat them as filed in compliance with the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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