Held that though the assessee had obtained the “audit report” in form 10B on September 30, 2016, prior to filing its return on June 21, 2018, the third limb in paragraph 4(i) of Circular No. 10, dated May 22, 2019 ([2019 418 ITR (St.) 2) which required that the audit report in form 10B be filed before the date specified under section 139 of the Act was not satisfied. The term “specified date” as defined in Explanation 1 to section 139 of the Act, in the case of the assessee-trust for the AY 2016-17 was June 30, 2016. As the assessee-trust had uploaded the audit report in form 10B on June 21, 2019, much beyond the date specified under section 139 of the Act, its case would clearly fall beyond the scope and gamut of paragraph 4(i) of Circular No. 10, dated May 22, 2019. The case of the assessee would fall within the sweep of paragraph 4(ii) of the Circular, which would be applicable to all other cases prior to the AY 2018-19 where form 10B is belatedly filed. The assessee not having filed any application for condonation of delay under section 119(2)(b) of the Act as provided in paragraph 4(ii) of the circular, there was no occasion for condoning the delay in filing of form 10B by the assessee beyond the stipulated time period. Thus, there was no infirmity in the view taken by the lower authorities who had rightly declined the assessee’s claim for exemption under section 11 of the Act. However, the Assessing Officer after declining the assessee’s claim for exemption under section 11 of the Act could not have summarily held its gross receipts of Rs. 24,83,562 as its income. In sum and substance, the Assessing Officer after treating the assessee as an unregistered trust was bound to have considered its claim for deduction of expenses as raised in the income and expenditure account. Accordingly, the Assessing Officer was to grant the assessee a reasonable opportunity of being heard and to consider the assessee’s claim for deduction of expenses as debited in the income and expenditure account, to the extent allowable under the Act. [Matter remanded. (AY. 2016-17, 2017-18)
Shri Jain Shwetamber Murtipujak Sangh v. ITO (E) (2023)104 ITR 58 (SN) (Raipur)(Trib)
S. 11 : Property held for charitable purposes-Audit report in Form No 10B was filed beyond prescribed date-Application for condonation of delay was not filed-Denial of exemption is not proper-Assessing Officer is bound to consider deduction of expenses debited in Income and expenditure account as allowable-Matter remanded to the Assessing Officer.[11(2), 12AA-119(2)(b), 139(1)]