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TMI Blog2025 (4) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... n Proceedings u/s 263: 1. The learned CIT(Exemption), Ahmedabad ("the CIT(E)") erred in fact and in law in revising the assessment by invoking powers u/s 263 of the Income Tax Act, 1961 ("the Act") without satisfying the conditions stipulated for invoking such extraordinary jurisdiction u/s 263 of the Act. 2. The learned CIT(E) erred in fact and in law in initiating revision proceedings u/s 263 of the Act for AY 2017-18 despite the fact that assessment order u/s 147 rws 144 of the Act is neither erroneous nor prejudicial to the interest of the revenue. 3. The learned CIT(E) erred in fact and in law in initiating proceeding u/s 263 of the Act on the issue of allowance of exemption u/s11 of the Act despite that fact that said issue was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w in holding that that exemption u/s 11 of the Act is not allowable to the Appellant despite the fact that the Appellant has satisfied the conditions for claim of exemption u/s 11 of the Act. 10. Your Appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the grounds of appeal." 3. The brief facts of the case are that on verification of the case records, the CIT(E) observed that the assessee had claimed exemption amounting to Rs. 96,71,15,100/- under Section 11 of the Act, in the return of income filed in response to notice issued under Section 148 of the Act. The CIT(E) observed that the Assessing Officer had allowed exemption amounting to Rs. 96,71,15,100/- despite the fact that the Audit Repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral judicial precedents which have held that delay in filing of Form 10B being only a procedural lapse should not disentitle the benefit of availing benefit of Section 11 of the Act to the assessee, in case all other conditions / requirements for availing the benefit of Section 11 of the Act have been met by the assessee. 6. In response, Ld. D.R. placed reliance the observations made by Ld. CIT(E) in the 263 order. 7. We have heard the rival contentions and perused the material on record. 8. We note that in the case of Brahmchari Wadi Trust vs. Commissioner of Income-tax (Exemption) [2025] 173 taxmann.com 54 (Gujarat) [17-03-2025], the Gujarat High Court held that where delay in filing Form No. 10 by assessee-trust had occurred due to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) before conclusion of appellate proceedings, exemption under sections 11 and 12 could not be denied to assessee only on account of late filing of Form No. 10B. 9. In the case of Shiksha Foundation vs. Income Tax Officer (Exemption) [2024] 164 taxmann.com 757 (Ahmedabad - Trib.) [14-06- 2024] the ITAT made the following observations in this regard: "We have heard the rival contentions and perused the material on record. In this case, on going through the facts of the case, what transpires from the records is that the audit report for assessment year 2018-19 was duly signed by the auditor on 21-09- 2018, though the same was omitted to be filed on the income tax portal. The due date of filing of income tax return for assessment year 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Social Security Scheme of GICEA v. CIT (Exemptions) [2023] 147 taxmann.com 283 (Guj.), the Assessee a Public Charitable Trust had been filing returns of income in time along with audit report under section 12A(1)(B). For relevant assessment year 2016-17, assessee obtained audit report from Chartered Accountant well before time, however, same could not be uploaded along with return of income inadvertently. In absence of any audit report, Central Processing Centre had not granted exemption under section 11 which otherwise was available to it since many years and resultantly demand was raised. The Assessee therefore filed a rectification application under section 154, seeking to place on record audit report to Central Processing Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Guj.), the High Court held that where an assessee could not file audit report along with return but filed it later before completion of assessment by ITO, he was entitled to deduction under section 80J of the Act. 7.6 Accordingly, in light of the above judicial precedents cited above and the assessee's set of facts, we are of the considered view that the claim of application of income cannot be denied to the assessee only on the ground that the assessee/the auditor of the assessee omitted to file form 10B (auditor's report) along with return of income, when the same was submitted to the tax authorities before the order/intimation under section 143 (1) of the Act was issued. 8. In the result, the above ground of appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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