2023 (3) TMI 263 - AT - Income Tax

Deduction u/s.11 & 12 - delay in filing of the audit report in Form 10B - auditors of the assessee had failed to include the Form 10B being the audit report alongwith return of income - HELD THAT:- A perusal of the decision of the Hon’ble P&H High Court in the case of Shahzedanand Charity Trust [1997 (8) TMI 72 - PUNJAB AND HARYANA HIGH COURT] clearly shows that the Hon’ble P&H High Court has categorically held that the audit report u/s.12A(1)(b) of the Act can be filed even at the appellate stage. Thus, clearly, the Hon’ble P&H High Court has held that the filing of the audit report alongwith the return as per provisions of section 12A(1)(b) is not mandatory. As we are faced with a decision of the Hon’ble High Court on the issue, the decision of the Co-ordinate Bench of this Tribunal would not hold value of precedence.

Thus, clearly, it is noticed that the audit has been done within time in the case of the assessee and it is only the audit report which has not been filed within the time prescribed. This is only a venial breach of the provisions. This being so, as also considering the fact that CBDT in its Instruction No.1/1148 has given the powers to the AO to condone the delay in filing of the audit report, we are of the view that the impugned assessee should not be denied the benefit of deduction u/s.11 & 12 of the Act on account of the said venial breach in respect of the delay in filing of the audit report. Consequently, the delay in filing of the audit report in Form 10B is condoned and the Assessing Officer is directed to consider the same when computing the income of the assessee. Appeal of the assessee stands allowed.