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2010 (9) TMI 817 - AT - Income TaxExemption U/s. 11 - Audit U/s. 12A(1)(b) - CIT(A), erred in directing the AO to allow the benefit of exemption u/s. 11 of the Act, 1961, no appreciating the fact that the trustee Shri Madhav V. Shah during the course of statement u/s. 131 recorded in this office on 13/10/2008 had categorically stated that the audit was never conducted and no audit report in form No. 10B was ever prepared and further not appreciating the fact that the conduct of audit U/s. 12A(1)(b) being the mandatory condition for allowance of exemption u/s.11 of the I.T. Act, the assessee was not eligible for exemption U/s. 11 of the I.T. Act - Held that:- Shri Madhav V. Shah has claimed in his affidavit that he had never said that the books of accounts of the trust had not been audited - this claim of Shri Madhav V. Shah to be acceptable - In this regard, find that along with return of income the assessee had filed report of auditor which was required to be given under the Bombay Public Trust Act, 1950 - The said report of the auditor clearly mentions that the assessee maintains profit and loss accounts and also disclosed receipts and disbursement correctly - This report is dated 11/10/2006 and had been filed along with return of income - In these circumstances we are of the view that the report in Form No.10B, which is similar to the report under the Bombay Public Trust Act, 1950 would not have been obtained by the assessee - The plea of bonafide omission to file form No.10B along with return of income is deserves to be accepted - There is no reason why the affidavit of Shri K.P.Mehta, C.A filed in this regard should be rejected - Held that the assessee had complied with the provisions of section 12A(1)(b) of the Act - Thus, the CIT(A) was justified in holding that the assessee was entitled to exemption under section 11 of the Act - Decided in favour of assessee.
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