Not Filing Audit Report Along With Return Is Procedural Omission And Not Impediment In Law In Claiming Exemption U/s 11: Ahmedabad ITAT

While following the order of Co-ordinate Bench, the Ahmedabad ITAT condoned the delay and restored the matter to the file of CIT(A) to allow exemption u/s 11 of the Income Tax Act, 1961 to the assessee as per the provisions of law.

The ITAT Coram comprising Waseem Ahmed (Accountant Member) observed that “non filing of Audit Report along with return of income is a procedural omission and cannot be an impediment in law in claiming the exemption, we allow this appeal condoning the delay in filing the Audit Report in Form No. 10B. However, we also upon condoning the delay, restore the matter to the file of the CIT(A) to pass order in regard to the exemption claimed by the assessee strictly in accordance with law.” (Para 9)

As per the brief facts of the case, the Assessee filed his return. While processing the return u/s 143(1), the AO denied the exception claimed u/s 11, which was confirmed by the CIT(A).

The Bench noted that the Tribunal in identical facts and circumstances in the case of Hari Gyan Pracharak Trust vs. DCIT vide ITA No. 245/Ahd/2021 order has decided the issue in favour of the assessee.

The Bench observed that the Tribunal further committed an error in appreciating the import of Section 1192(b) of the Act in as much as the application contemplated hereunder is only a remedy for the assessee which could not be said to be compulsorily resorted to by the assessee.

The Bench stated that the only change is with regard to compulsory filing of audit report in Form 10B in electronically form which is made mandatory under Rule 12(2) of the Income Tax Rules, 1962 but there is no change with regard to the substantive law about fling of audit report.

Therefore, the ITAT allow the assessee's appeal for statistical purposes.

Counsel for Appellant/ Taxpayer: S.N Divatia

Counsel for Respondent/ Department: Saumya Pandey Jain

Case Title: Gyandeep Charitable Trust verses A.D.I.T

Case Number: ITA No. 555/AHD/2023

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