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Issues Involved: Interpretation of the requirement to file audit report in Form No. 10B u/s 12A(b) of the Income-tax Act, 1961.
Summary: The High Court of Madhya Pradesh addressed the issue of whether filing the audit report in Form No. 10B with the return of income was mandatory u/s 12A(b) of the Income-tax Act, 1961. The assessee-trust had filed returns of income for the years 1982-83 and 1983-84 without the audit reports, which were later submitted during the assessment proceedings. The Income-tax Officer disallowed the exemption claim under section 11 due to non-filing of audit reports with the returns. The Appellate Assistant Commissioner and the Tribunal held that filing the audit report during assessment proceedings was sufficient compliance with the law. The Revenue contended that the requirement to furnish the audit report along with the return was mandatory as per section 12A(b) of the Act. However, the Tribunal ruled that filing the audit report at any stage during assessment proceedings was acceptable. The Court noted that the Act allowed filing returns even after the due date, implying flexibility in submitting required reports. Therefore, the Court found that denying exemption solely based on the timing of filing the audit report would go against the spirit of the Act. Consequently, the Tribunal's decision was upheld, ruling in favor of the assessee and against the Revenue. In conclusion, the High Court of Madhya Pradesh clarified that filing the audit report in Form No. 10B with the return of income was not mandatory u/s 12A(b) of the Income-tax Act, and it was sufficient compliance if the report was filed during the assessment proceedings.
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