TMI Blog2023 (5) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... when the audit-report (Form No. 10B) was filed belatedly after processing of return u/s 143(1)? - HELD THAT:- We are convinced that the controversy is directly settled in favour of assessee by decision in Savitri Foundation [ 2022 (8) TMI 1372 - ITAT MUMBAI] where as following the decision of Mumbai Metropolitan Regional Iron Steel Market Committee[ 2015 (4) TMI 512 - BOMBAY HIGH COURT] held that late filing of required documents would not disentitle the assessee from availing benefit of section 11 of the Act. We are of the view that in the present case, the assessee can t be denied the benefit of exemption u/s 11 as claimed in the return of income for mere delay in filing of audit-report. We, therefore, deem it fit to remand this matter back to the file of AO for a fresh assessment after considering the audit-report filed by assessee, in accordance with law. These grounds are accordingly allowed. - ITA No.403/Ind/2022 - - - Dated:- 18-4-2023 - Ms. Suchitra Kamble, Judicial Member And Shri B.M. Biyani, Accountant Member For the Assessee : Shri S.S. Deshpandey, CA And AR For the Revenue : Shri Ashish Porwal, Sr. DR ORDER PER B.M. BIYANI, A.M.: Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration on 03.08.2017 claiming the exemption u/s 11/12. The books of account of assessee were duly audited by statutory auditors and the return was filed on the basis of audited accounts dated 08.06.2017. But, however, the auditors did not e-file/upload the audit-report (Form No. 10B) before filing return of income; the same was done on 03.04.2019 / 04.05.2019. When the AO processed intimation u/s 143(1) on 09.03.2019, it denied exemption u/s 11/12 for the sole reason that Form No. 10B was not filed along with return of income. Immediately after receiving such intimation, the assessee filed a rectification-application u/s 154 of the Act to the very same AO on 20.03.2019 and the assessee was awaiting a favourable disposal of rectification-application by AO but finding no action from AO for a period of about 5 months and certain days (Ld. AR pointed out that the AO has not made rectification even till now), ultimately the assessee took a decision to file appeal to CIT(A); therefore the appeal could be filed only on 24.08.2019. Thus, the Ld. AR submits, the sole reason of delay in filing first-appeal to CIT(A) was the pendency of assessee s rectification application u/s 154 before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of dismissal taken by Ld. CIT(A). The assessee succeeds in this ground. Ground No. 2 to 3: 8. The exact controversy involved in these grounds is whether or not the assessee was entitled for exemption u/s 11/12 as claimed in the return of income, when the audit-report (Form No. 10B) was filed belatedly after processing of return u/s 143(1)? 9. Apropos to this issue, the precise facts are: The assessee is a charitable society registered u/s 12A of the Income-tax Act, 1961 and entitled for exemption u/s 11/12; accordingly it claimed exemption u/s 11/12 in the return of income. But when the AO processed return u/s 143(1) vide intimation dated 09.03.2019, he did not allow exemption u/s 11/12 for the reason that the audit report (Form No. 10B) was not filed by assessee with return of income. Subsequently after processing of return, the Form No. 10B was e-filed/uploaded on 03.04.2019 / 04.05.2019 before filing of first-appeal. 10. Ld. AR submitted that the assessee was engaged in charitable activities; that the registration granted to it by tax authorities u/s 12A was in force; that the assessee had been granted benefit of section 11/12 in preceding assessment-ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii) the said decision involved interpretation of sub-section (8) of section 10B which is a negative provision i.e. it provides that if the assessee did not want to apply section 10B, then the assessee had to file a declaration but this is not a case in section 11/12. 11. Per contra, Ld. DR vehemently defended the orders of lower authorities and submitted that furnishing of audit-report alongwith return of income is a pre-condition for allowability of exemption u/s 11. Since the assessee has not fulfilled such condition, the lower-authorities have rightly denied the assessee s claim of exemption u/s 11 and there is no infirmity in the action of lower-authorities. 12. We have heard rival contentions of both sides and examined the present controversy in the light of judicial decisions. At first, we are convinced that the controversy is directly settled in favour of assessee by decision in Savitri Foundation (supra) where the Hon ble Mumbai ITAT, following the decision of Hon ble Mumbai High Court in CIT vs. Mumbai Metropolitan Regional Iron Steel Market Committee 378 ITR 103 has observed and held thus: 4. Submissions made by rival sides heard, orders of authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, after following the decisions of Hon ble Gujrat High Court in CIT vs. Gujarat Oil Allied Industries reported in 201 ITR 325 and CIT vs. Mayur Foundation reported in 274 ITR 562 . The relevant paragraphs of the order of ITAT are as under: 12. We have heard the rival contentions of both the parties and perused the materials available on record. As per the provisions of section 12A(1)(b) of the Act, it is necessary for the assessee in order to claim exemption under section 11 of the Act to get the accounts audited as well as obtain the audit report in the prescribed form from the qualified chartered accountant which is to be filed along with the return of income. Admittedly, in the case on hand the assessee has not filed form 10B being the audit report along with the return of income and the same was also not filed till the completion of the assessment order as well as appellate order by the learned CIT-A. As such the order of the learned CIT(A) was passed dated 30th November 2017 whereas the Form 10B of the audit report was filed/uploaded dated 25th December 2017 which evidences that the audit report in Form 10B was filed subsequent to the appellate order by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the assessment proceedings was pending before the AO whereas in the case on hand the assessee complied the requirement at the stage of appellate proceeding before tribunal. Thus, a question arises before us whether the principles laid down in the judgment cited above can be applied in the given facts and circumstances. In this context we note that, in the judgment cited above it was observed that procedural requirement for filing the audit report was fulfilled by the assessee before the completion of the assessment. But the facts of the case on hand are different in so far the audit report was filed by the assessee after the completion of the assessment framed under section 143(3) of the Act. In this regard we note that the assessment remains pending if any appeal is pending before the higher forum. In other words, if any appeal is pending either before the ld. CIT-A or before the ITAT which transpires the fact that the assessment is pending. In holding so we draw support and guidance from the judgment of Hon ble Gujarat High Court in case of CIT vs. Mayur Foundation reported in 274 ITR 562 , wherein it was held as under: Thus, the proceedings before the Tribunal are meant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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