TMI Blog2023 (7) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... /2022 - - - Dated:- 5-7-2023 - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri Tej Shah, A.R. For the Revenue : Shri Atul Pandey, Sr.D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee against the Appellate order dated 16.03.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as NFAC ) refusing to condone the delay in filing Form No. 10B for the Assessment Year 2017-18 and thereby denying the claim of exemption u/s. 11 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of the case is that the assessee is a public trust having the main object of educational, medical and social upliftment of the Public by giving computer training to the students. The Assessee Trust is having registration u/s. 12AA from the A.Y. 2008-09 onwards. For the Assessment Year 2017-18, the assessee filed its Return of Income on 29-01-2018. The CPC vide office communication dated 22-08-2018 and 09-10-2018 sent to the registered email communication address of the assessee directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kerala and Hon'ble High Court of Bombay the disallowance of exemption claimed u/s 11 and 12 is upheld. 5. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The NFAC erred in law and in the facts of the case in confirming the order of the AO in denying exemption u/s 11 and 12 of the act. 2. The NFAC erred in law and in the facts of the case in confirming the action of the AO in allowing prima facie adjustment u/s 143(1)(a) of the act. 3. The NFAC erred in law and in the facts of the case in confirming the action of the AO in not allowing rectification of its order u/s 154 of the act. 5.1. Ld. Counsel Shri Tej Shah appearing for the assessee submitted before us that in response to the communication dated 09-10-2018 by CPC, the assessee uploaded its Audit Report in Form No. 10B on 17-10-2018, whereas the assessee was required to response to the CPC on or before 07-11-2018. Without taking cognizance of the Form No. 10B uploaded by the assessee on 17- 10-2018, the CPC passed intimation u/s. 143(1) denying the claim of exemption u/s. 11 on the ground that Audit Report in Form No. 10B was not filed along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of the availability of the audit report when the assessment was undertaken by the Assessing Officer even though the same may not have been filed along with the return of income. Filing of audit report is held to be substantive requirement but not the mode and stage of filing, which is procedural. Once the audit report in Form 12B is filed to be available with the Assessing Officer, before assessment proceedings take place, the requirement of law is satisfied. In that view, the Income Tax Tribunal was not justified in dismissing the appeal of the assessee. 6.1 The appellant assessee has to be held to be eligible and entitled to exemptions under Section 11(1) and 11(2) of the Act and the alleged ground of non-filing of audit report alongwith return of income which was at the best procedural omission, could never to an impediment in law in claiming the exemption. 8.2. On similar set of facts the Mumbai Bench of the Tribunal in the case of Shree Bhairav Seva Samiti (cited supra) held as follows: 9. In the present case, it is undisputed that the assessee trust is registered under section 12AA of the Act for the past 40 years and the said registration is still ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of exemption as a charitable could not be denied exemption, the assessee merely on bar of limitation in furnishing audit report in Form 10B. Considering the aforesaid and legal discussion, we find that though the assessee has not filed any return of income at the time, however, it was available before the Id. CIT(A) as it was uploaded much before filing application under section 154. Therefore, respectfully following the decisions of Hon'ble jurisdictional High Court in case of CIT vs. Xavier Kalavani Mandal (P.) Ltd. (supra) and in Sarvodaya charitable Trust vs. ITO (Exemption) (supra), we find that the assessee has complied the procedural requirement, therefore, the Assessing Officer/CPC is directed to verify the claim of the assessee and grant necessary deduction under section 11 of IT Act. In the result, the appeal of the assessee is allowed for statistical purposes. 10. As in the present case also the assessee has complied with the procedural requirement of obtaining and filing Form 10B, therefore, respectfully following the aforesaid decision of the Co-ordinate Bench of the Tribunal, the Assessing Officer is directed to decide the claim of the assessee under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent dated 12-3-2021 is quashed and aside. The impugned order of rectification under section 154 of the Act dated 25-1-2019 is also quashed and set aside. The application for condonation of delay filed by the petitioner before the respondent is allowed. 6. The respondent is now directed to process the return in accordance with law. It is noticed that no assessment is framed and only an intimation under section 143(1) of the Act was issued. No scrutiny could be carried out by the respondent since the audit report under section 10B was not on record. Learned advocate for the petitioner Mr. B.S. Soparkar fairly submitted that the issue of benefit of exemption may be examined by issuance of notice u/s 143(1)/143(2) and the petitioner shall not object to the said proceedings by taking the ground of limitations. 6.2. Respectfully following the above judicial pronouncements by Jurisdictional High Court, we have no hesitation in confirming the order passed by Ld. CIT(A) who has directed the Jurisdictional Assessing Officer (JAO) to verify the Form No. 10B and allow the claim of exemption u/s. 11 and compute the total income. Thus the grounds raised by the Revenue is devoid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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