TMI Blog2023 (12) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... r filing return of income) but before the assessment/ intimation u/s 143(1) was made by the Department. The intimation/assessment order was framed under section 143(1) of the Act, on 23.08.2022, hence Form No. 10B was available before the AO/CPC, at the time making the assessment/processing the return of income of the assessee. The assessee could not attend the communication due to IT-website technical glitches, however has eventually filed the audit report in Form No 10B on 04.08.2022 and complied with the condition laid in section 12A(1)(b) so as to entitle for a claim of exemption envisaged under sections 11 and 12 of the Act, hence we delete the disallowances made by the AO and allow the appeal of the assessee. - Shri Pawan Singh, JM And Dr. A.L.Saini, AM For the Assessee : Ms. Chaitali Shah, C.A For the Respondent : Shri Ashish Pophare, CIT-DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2021-22, is directed against the order passed by the National Faceless Appeal Centre, Delhi, [ NFAC/Ld.CIT(A) for short] dated 05.06.2023, which in turn arises out of an assessment order/In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by CPC also includes voluntary contributions forming part of the cropus amounting to Rs. 1.50 lakhs. 5. During the appellate proceedings, the assessee in its written submission has stated that the required audit report could not be uploaded on the e-filing portal due to some technical errors on Income Tax Portal. The assessee was not able to assign the role of its CA for electronic filing of Form 10B. Further, the assessee stated that it has also filed grievance in this regard on the portal on 19.11.2021 but the grievance window was closed without providing any resolution on 13.12.2021. Subsequently, the assessee filed Form 10BB on 14.01.2022. The Form 10B was subsequently field on 04.08.2022. In view of the above submission, the assessee pleaded before ld CIT(A) that adverse views in respect of delayed filing of Form 10B should not be taken and exemption u/s 11 should be allowed. 6. The ld CIT(A) noted that assessee has filed return of income on 20.12.2021 and due date of filing of return was 15.03.2022. The tax audit in Form 10BB was filed on 14.01.2022 and tax audit in Form 10B was filed on 04.08.2022 (after filing return of income). The assessee is engaged in running ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to do in this regard. Grievance Resolution Your request has been processed and the issue has been resolved Kindly re-try. If issue persists you are requested to attach and Share following details to efilingwebmanager@incometax.gov.in PAN Error sreen shot * Contract Details * issue description 8. The ld CIT(A) noted that e-filing team in the redressal of the grievance has stated that issue has been resolved and asked the assessee to retry. Further, the assessee was also advised that if issue persists then the details of PAN, screen shot, contract details and issue description should be shared with efilingwebmanager@incometx.gov.in. Since no details were shared by the appellant after resolution of the grievance on 13.12.2021 by the e-filing portal, it can be assumed that the technical glitch faced by the appellant was resolved. However, the appellant has not filed the required audit report in form 10B within the stipulated time but the same has been filed after about 5 months of the due date of filing of the return of Income. Therefore, ld CIT(A) did not agree with the contention of the appellant that it was prevented from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for the sake of brevity. 13. We have heard the rival submissions of both the parties and carefully gone through the submissions put forth on behalf of the assessee. We note that assessee has filed return of income on 20.12.2021 and due date of filing of return was 15.03.2022. The tax audit in Form 10BB was filed on 14.01.2022 and tax audit in Form 10B was filed on 04.08.2022 (after filing return of income). The assessee is engaged in running pre-primary, primary, secondary and higher secondary school and is registered u/s 12A/12AA of the Act. Therefore, as per ld CIT(A), the assessee is required to file Form 10B, one month prior to the due date of filing of the return. This has not been done by the assessee. Therefore, in the intimation u/s 143(1) of the Act, issued on 23.08.2022 by the CPC, the exemption of Rs. 3,30,07,028/-claimed u/s 11 of the Act, in the return of income was disallowed, due to non-filing of Form 10B prior to furnishing return of income. Further the voluntary contributions forming part of the corpus amounting to Rs. 1,50,000/- is also disallowed and added to the total income of the assessee. We note that assessee had filed Form 10B on 04.08.2022 (after fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks audited u/s 12A(1)(b) of the Act from M/s S. D. Pednekar Co which issued furnished the said audit report on 05/07/2017 i.e. prior to filing of ITR for the impugned AY, however the copy thereof remained to be filed alongwith ITR as well in response to communication u/s 143(1)(a) of the Act on account of technical glitches beyond the control of the assessee and the deficiency came to light only upon service of demand u/s 156 of the Act. Thus, the non-compliance with communication u/s 143(1)(a) of the Act due to IT- Website technical glitches was unintentional and beyond the control of the appellant is sufficient to form a reasonable cause for non-compliance and since the procedural compliance has been duly made good by fling the audit report on record, we see no reason to deny the exemption in the present facts and circumstance, ergo we set-aside the order of both the tax authorities below and direct the Ld. AO to grant the claim of exemption in the evince of Form No 10B. 7. Since ground no 1 is adjudicated in favour of the assessee, the balance grounds rendered academic. 15. On the identical facts, we also rely of the judgment of the Jurisdictional Tribunal Ahmedaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue is now before the Tribunal. 5. Before us, the ld.DR while strongly objecting to the finding of the ld.CIT(A) contended that provisions of section 11 and 12 shall not apply in relation to the income of any trust or institution unless the person in receipt of income furnishes along with the return of income for the relevant assessment year the audit report in the prescribed form. And the assessee having failed to fulfill the conditions provided in section 12A(1)(b) of the Act, the assessee cannot claim benefit under section 11 and 12. He accordingly supported order of the AO/CPC. 6. The ld.counsel for the assessee, on the other hand, supported the order of the ld.CIT(A). He further submitted that the law in this regard is settled that benefit of exemption under section 11 and 12 should not be denied merely on account of delay in furnishing the audit report, and it would be sufficient compliance, if the audit report is furnished at a later stage either before the AO during the assessment proceedings or before the ld.CIT(A) in the appellate proceedings. In support of his submissions, the ld.counsel for the assessee drew our attention to a recent judgment of the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant/assessee for the amount applied for the charitable purpose on revenue account as well as capital account. It was merely a procedural lapse on part of assessee to not file Form 10B alongwith return of income. The appellant/assessee uploaded the audit report within a week of filing return of income. It cannot be denied the benefit of exemption under section 11 merely on account of delay in furnishing audit report. Thus the addition made by CPC Bangalore in its order under section 143(1) of the IT Act 1961 dated 17.03.2020 in respect of voluntary contribution other than the corpus received by the appellant trust amounting to Rs. 1,52,03,71,381/- is ordered to be deleted. 8. The appellate proceedings being the continuation of assessment proceedings merely because the assessee has not furnished at the threshold i.e. furnishing the audit report along with return of income, but filed during the assessment proceedings, and available even during the appellate proceedings, it cannot be stated that the assessee has failed to comply with the provisions so as to deny substantial justice by way of granting exemption. The Hon ble Jurisdictional High Court in a recent decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 11 of the Act for non-filing of requisite form alongwith return of income, to be not as per law, noting the fact that the assessee did file the requisite form during regular assessment proceedings and appellate proceedings before him. We, therefore, uphold order of the ld.CIT(A) and reject the grounds of appeal of the Revenue. 16. Hon`ble Gujarat High Court in the case of Gujarat Oil Allied Industries, [1993] 201 ITR 325 (Gujarat), held that where an assessee could not file audit report along with return of income but filed it later before completion of assessment before the Assessing Officer, the assessee was entitled to claim deduction. We note that the law in this regard is settled that benefit of exemption under section 11 and 12 should not be denied merely on account of delay in furnishing the audit report, and it would be sufficient compliance, if the audit report is furnished at a later stage either before the assessing officer during the assessment proceedings or before the ld.CIT(A) in the appellate proceedings. Therefore, at the cost of repetition, we state that assessee has filed Form No. 10B on 04.08.2022 (after filing return of income) but before the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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