ITAT Accepts Trust's Late Tax Return, Grants Section 11 & 12 Exemptions After Finding Audit Rules Inapplicable Pre-Registration.

ITAT ruled in favor of the trust appellant, reversing denial of exemptions u/ss 11 & 12. The tribunal held that prior to registration on 23/11/2022, mandatory audit requirements were inapplicable to the unregistered trust. The belated filing of income tax return was deemed acceptable, particularly considering the 2023 amendment to section 12A(1)(b) allowing returns filed u/ss 139(1) or 139(4) to satisfy compliance requirements. ITAT noted the trust's existence since 1965 and found the tax demand creation untenable. The tribunal directed acceptance of returned income, granting full relief on grounds of both income return submission and audit report compliance, while dismissing CIT(A)'s divergent reasoning as perverse. .....

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