SHRI GANADHIPATI GANDHARACHARYA KUNTIUSAGAR VIDYA SODH SONSTHA,KOLHAPUR V. ITO, EXEMPTION, PUNE, KOLHAPUR

ITA 2024/PUN/2025

AI Insights

The case involves Shri Ganadhipati Gandharacharya Kuntiusagar Vidya Sodh Sansthan, a public trust registered under sections 12A and 80G of the Income Tax Act, which appealed against the orders of the Income Tax Officer and the Additional/Joint Commissioner of Income Tax (Appeals) for the assessment years 2018-19 to 2021-22. The appeals were primarily concerned with the denial of exemptions under Section 11 of the Income Tax Act due to alleged late filing of the audit reports in Form 10B and the income tax returns. The Tribunal considered the medical conditions of the trust's managing trustee and consultant, which led to delays, and the legal precedents that supported the view that such procedural requirements are directory and not mandatory.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792112 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 26-08-2025
• Other Referred Cases: Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune, Dr. Prabha Atre Foundation vs. ITO Exemption, Ward 1(2), Mumbai, CIT-IV Vs Xavier Kelavani Mandal Pvt Ltd, DCIT(E) vs. Audyogik Shikshan Mandal, CIT vs. Shahzadanand Charity Trust, CIT-II, Th3ne vs. Mumbai Metropolitan Regional Iron & Steel Market Committee, M/S. Incredible India Projects Private vs ACIT, Bangarh Educational Welfare Trust, Sahaj Seva Trust Vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT ANDHALE
• Assessee Lawyers: BHUVANESH KANKANI; CATENA OF
• Keywords: Condonation of delay; Set aside; Charitable institution; Benefit of exemption; Maximum Marginal Rate
• Section: 143(3); 11; 12AA; 12A; 139; 10B; 80G; 139(5)

Judgement Text

" आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.2023, 2024, 2025 & 2026/PUN/2025 धििाारण वर्ा / Assessment Years : 2018-19 to 2021-22 Shri Ganadhipati Gandharacharya Kuntiusagar Vidya Sodh Sansthan, Gat No. 1679, Ramling Road, Tal. Hatkanangale, Dist.-Kolhapur-416123 PAN : AADTS2791P Vs. Income Tax Officer, Exemptions Ward-1, Kolhapur अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Bhuvanesh Kankani Department by : Shri Bharat Andhale Date of hearing : 06-10-2025 Date of Pronouncement : 09-12-2025 आदेश / ORDER PER BENCH : The above four appeals filed by the assessee are directed against the separate orders dated 05.03.2024, 28.06.2024, 28.06.2024 and 07.03.2024 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-2, Gurugram [“Addl./JCIT(A)”] pertaining to Assessment Years (“AYs”) 2018-19, 2019-20, 2020-21 and 2021-22 respectively. Since identical issues are involved in all the four appeals, for the sake of convenience, all these appeals were heard together and are being disposed of by this common order. 2. ITA Nos. 2023 & 2026/PUN/2025 is filed with delay of 452 days and ITA Nos. 2024 & 2025/PUN/2025 is filed with delay of 360 days. The Ld. AR submitted that both the Managing Trustee and the Consultant of the assessee trust are senior citizens and were facing critical medical issues at the relevant time due to which the delay was caused. The assessee has filed an application along with a sworn affidavit of the Managing Trustee along with the supporting medical documents, seeking condonation of delay in filing of the appeal stating therein the reasons for delay as under : “4) That the delay was neither intentional nor deliberate. It occurred due to reasons beyond our control, as explained below: Printed from counselvise.com 2 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 4.1 That I, managing trustee of the Appellant Trust, Shri Gandhipati Gandharacharya Kuntisagar Vidya Sodh Sansthan, am deputed with the task of overall administration, financial management and compliance matters of the Trust. 4.2 That I was suffering from various health issues mainly High BP diabetes-related complications, Gastric issue, CHR Kidney Disease, Pelvis issue and hip fractur, and was also unable to sit properly during the relevant period. 4.3 That, during the relevant period, I was unable to carry out daily errands, had difficulty getting out of bed, walking, and at times even breathing. Copies of the medical certificates and prescriptions are enclosed herewith as Enclosure 1 and 2. 5) That it is further stated that, eventually, when I recovered a bit and got abreast with the orders and demands, I had asked our trusts consultant Mr. Gopalprasad Sharma ji to do the needful. However, Mr. Sharma who is also of Age 64, was also unweil due to prolonged back pain, kidney-related problems and Umbilical hernia and unable to attend office for a considerable period. Copies of the medical certificates and prescriptions are enclosed herewith as Enclosure 3. 6) That again in the year 2025, my health started to deteriorate and I was unable to look into routine chores. However, since our routine consultant is now doing better he had informed me about the delay so occurred and had requested me to provide the necessary details. Accordingly, since I am not able to perform the required activities, I had asked my son to provide the details etc. to Mr. Sharma ji. Owing to which present appeals could be ultimately filed. 7) That in view of above, I further humbly and solemnly affirm a. That the delay so occurred is because of my age and health and unfortunately also owing to the health of our consultant Mr. Sharma ji. b. That is to say, the delay in filing appeal is not at all intentional and said delay has occurred solely because of the reasons stated above.” 2.1 The affidavit of the consultant of the assessee trust along with the supporting medical documents is also placed on record stating the reasons for the delay as under : 5. The delay was neither intentional nor deliberate. It occurred due to reasons beyond our control, as explained below: 4.1 That as mentioned above I was deputed to look after tax and accounts matters of the trust since many years. 4.2 That, during the relevant period I was suffering from prolonged back pain, kidney-related problems and Umbilical hernia which severely restricted my ability to attend office and perform accounting and compliance work on a regular basis. Printed from counselvise.com 3 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 4.3 Due to my condition, I was under continuous medical treatment and frequently advised rest. Copies of my medical certificates and prescriptions are annexed herewith as Enclosure 1. 4.4Because of my health condition, I was unable to properly coordinate the appeal matters, thereby contributing to the delay in filing the present appeals. 6. That I respectfully submit that the delay was solely due to genuine medical reasons beyond my control. There has been no negligence or malafide intention on the part of the Trust. 7. That, I further state that, owing to this delay, neither I, nor the trust has gained anything.” 2.2 The Ld. DR had no objection if the delay is condoned and the appeal are admitted for adjudication. 2.3 After hearing both the sides and considering the above stated reasons, we are of the view that the delay is not intentional or deliberate but attributable to the sufficient cause. We, therefore, condone the delay in filing of the appeals and proceed to decide the appeals in light of the decision(s) of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339. ITA No. 2023/PUN/2025, AY 2018-19 3. ITA No.2023/PUN/2025 for AY 2018-19 is taken up as a lead case. The assessee has raised the following grounds of appeal :- “1. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the order passed u/s 143(1) of the Act and that upheld by Ld. Add/J.CIT(A), making addition of Rs.70,85,371/- is incorrect, unjustified and is not in accordance with the provisions of sec. 11 r.w.s 12A of the Act. Accordingly, the Addition so made by Ld. AO and that upheld by Ld. CIT(A) be deleted and Appellant be granted just and proper relief in this respect. 2. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in not appreciating the fact that the return of income and the audit report in Form 10B both were duly filed much before passing of the order u/s 143(1) of the Act and hence there was no reason for denying the claim u/s 11 of the Act. Thus, the addition so made and as upheld be kindly held as incorrect and unjustified and not in accordance with the provisions of the Act. 3. Without prejudice to above grounds and on the facts and circumstances prevailing in the case and as per provisions & scheme Printed from counselvise.com 4 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in charging to tax entire receipts instead of surplus amount. Accordingly, Ld. AO be directed to delete the amount of addition pertaining to expenditure. 4. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.” 4. Briefly stated the facts are that the assessee is a public trust and is registered u/s 12A of the Income Tax Act, 1961 (the “Act”) vide registration certificate dated 24.11.2003. It is also registered u/s 80G of the Act since 22.08.2008. For AY 2018-19, the assessee filed its return of income on 12.11.2019 u/s 139(4) of the Act and claimed exemption u/s 11 of the Act. The audit report and Form 10B was uploaded on the portal on 07.01.2019. The return of the assessee was processed u/s 143(1) of the Act vide intimation order dated 04.03.2020. The Central Processing Center/the Ld. Assessing Officer (“CPC/AO”) disallowed the exemption claimed u/s 11 of the Act due to late filing of audit report in Form 10B under the provisions of section 12A(1)(B) of the Act. 5. Aggrieved, the assessee filed an appeal before the Ld. Addl./JCIT(A) challenging intimation order u/s 143(1) of the Act with a delay which was condoned by the Ld. Addl./JCIT(A). The Ld. Addl./JCIT(A) upheld the decision of the Ld. AO and dismissed the assessee’s appeal for the reason that the assessee filed the income tax return beyond the due date of filing of the return, by observing as under : “6.3 In this context, it's important to note that according to Section 12A(1)(b) and Rule 178, Trusts are obligated to file Form 10B, which is mandatory. Form 10B can only be accessed and submitted online and must be filed no later than the specified date mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section 139(1)of the Act. The due date for submitting the return in case of the appellant was September 30, 2018 and it was further extended to October 31, 2018, by CBDT's notification no. 225/358/2018/ITA-II dated 08-10-2018. The term 'due date' is explicitly defined within Section 139(1) itself, leaving no room for ambiguity or dispute regarding the filing deadline. 6.4 The date of income tax return submission is conspicuously evident on the return document itself. Upon a thorough review, it becomes abundantly clear whether the return conforms to the stipulated statutory time limit or falls into the category of belated submissions. In the present case, the assessment year in question is AY 2018-19, and the appellant filed the income tax return on January 12, 2019, which is beyond the due date of filing the return, i.e., September 30, 2018, as per Section 139(1), and also beyond the extended deadline of October 31, 2018, allowed for that relevant year. 6.5 In view of the above, I find no error in the AO's decision to disallow the appellant's claim for exemption under Section 11 of the Act when processing the return under Section 143(1) of the Act.” Printed from counselvise.com 5 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 6. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 7. The Ld. AR submitted that both the Ld. AO as well as Ld. Addl./JCIT(A) has erred in disallowing the assessee’s claim of exemption u/s 11 of the Act on the ground that the audit report in Form 10B was filed by the assessee beyond the prescribed due date of filing of return of income for the relevant AY 2018-19 under consideration. The Ld. AR submitted that both the return of income and Form 10B were duly filed much before passing of the intimation order u/s 143(1) of the Act and hence, the Ld. AO/the Ld. Addl./JCIT(A) is not justified in denying the assessee’s claim of exemption u/s 11 of the Act. He further submitted that the condition of filing of Form 10B for availing exemption u/s 11 is only directory in nature and not a mandatory requirement. He submitted that the impugned issue is covered in favour of the assessee by catena of decisions of various High Courts and Tribunals including the decisions of the Co-ordinate Bench(es) of the Pune Tribunal. In support thereof, he submitted a legal paper book comprising of the following decisions : i. Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune (ITA Nos. 761, 762, 763, 765 & 766/PUN/2025); ii. Indian Medical Association Pune Branch Vs. DCIT, Exemption Circle, Pune (ITA No.767/PUN/2025); iii. Dr. Prabha Atre Foundation vs. ITO Exemption, Ward 1(2), Mumbai (ITA No. 124/MUM/2025); iv. CIT-IV Vs Xavier Kelavani Mandal Pvt Ltd [Tax Appeal No. 1362 Of 2011 (Guj HC)]; v. DCIT(E) vs. Audyogik Shikshan Mandal [ITA no. 361/PUN/2019]; vi. CIT vs. Shahzadanand Charity Trust [1998] 96 Taxman 494 (P&H); vii. CIT-II, Thâne vs. Mumbai Metropolitan Regional Iron & Steel Market Committee [[2015] 58 taxmann.com 253 (Bombay)]; viii. M/S. Incredible India Projects Private vs ACIT [ITTA Nos.21 & 22 of 2025] (Telangana HC). 8. The Ld. DR, on the other hand supported the order of the Ld. AO/ the Ld. Addl./JCIT(A). Printed from counselvise.com 6 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 9. We have heard the Ld. Representatives of the parties and perused the material available on record as well as the paper book filed by the Ld. AR on behalf of the assessee. We have also perused the judicial precedents cited before us. We find that the Ld. AO while passing the intimation order u/s 143(1) of the Act has denied the assessee’s claim of exemption u/s 11 of the Act on account of late filing of the return of income and the audit report in Form 10B which was due to be filed by 31.10.2018 for the relevant AY 2018-19. The Ld. Addl./JCIT(A) upheld the action of the Ld. AO for the reasons already reproduced in the preceding paragraphs. Undisputedly, the assessee filed the return for the AY 2018-19 on 12.01.2019. Form 10B was filed on 07.01.2019. The intimation order u/s 143(1) of the Act was passed on 04.03.2020. Thus, in the instant case, although the return has been filed belatedly but Form 10B was filed before the processing of return. It is thus evident that Form 10B was duly available before the Ld. AO at the time of passing intimation order u/s 143(1) of the Act denying the claim of the assessee u/s 11 of the Act. Before us, drawing support from the decision(s) (supra), the Ld. AR has contended that filing of Form 10B for claiming exemption u/s 11 is not a mandatory requirement but only directory in nature and therefore even if Form 10B is furnished belatedly, the claim of exemption u/s 11 should be granted to the assessee. 10. We have perused the various decisions (supra) relied by the Ld. AR in support of his above contention and find that the Courts/Tribunals under the similar set of facts have allowed the claim of exemption u/s 11 of the Act to the assessee. We find an identical issue had come up before the Pune Bench of the Tribunal in the case of Indian Medical Association Pune Branch Vs. DCIT in ITA No. 767/PUN/2025 wherein the Tribunal vide its order dated 16.06.2025 allowed the assessee’s claim of exemption u/s 11 of the Act by observing as under : “7. We have heard the rival contentions and perused the record placed before us. Assessee has been denied benefit of exemption w/s.11 of the Act for delay in filing the return as well as delay in uploading the Audit Report on Form 10B. Admittedly, the due date for filing the return for impugned assessment year is 31.12.2021. Return has been filed on 16.02.2022. Last date to file the belated return u/s.139(4) of the Act in 31.03.2022. Thus, assessee has filed valid belated return. Under similar set of facts and circumstances where a belated return has been filed u/s.139(4) of the Act and Audit Report has been furnished after the due date, Coordinate Bench, Kolkata in the case of Bangarh Educational Welfare Trust (supra) has examined the issue in detail and granted relief to the assessee observing as follows: Printed from counselvise.com 7 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 \"8. We have heard the rival contentions and perused the records placed before us. The assessee is a charitable trust established for imparting education to rural areas without any profit motive. It enjoys registration u/s 12AA of the Act granted vide order dated 12.09.2018 effective from A.Y 2018-19 onwards. It claimed benefit ws 11 and 12 of the Act of Rs. 13587109/-. However, CPC while processing w/s 143(1)(a) of the Act denied the said exemption on account of two reasons; firstly the return of income was not filed before due date as prescribed u/s 139(4) of the Act and secondly audit report on Form 108 not uploaded before due date prescribed under the Act. Now, undisputedly in the case of assessee, the return of income is filed on 15.11.2018 and audit report on form 10B e-filed on 30.03.2019. Now, before adverting to the grounds, we would first like to go through the relevant provisions which have a direct bearing on the issue of requirement of filing of audit report and income tax return by the trust or institutions registered u/s 124 of the Act. Section 124(1)(b) and 12(1)(ba) of the Act reads as follows: \"Conditions for applicability of sections 11 and 12. 124. (1) The provisions of section-11 and section-12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:- (b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of section-11 and section-12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section-288 48/before the specified date referred to in section-44AB and the person in receipt of the income furnishes by that date) the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed:) (ba) the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub- section (44) of section-139, within the time allowed under that section. 9. Section 124(1)(ha) of the Act provides that the provisions of section 11 and 12 shall apply in relation to income of any trust or institution if the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (44) of section 139 te within the time allowed under that section. Now, since reference has been made to section 139(44) of the Act and the same is reproduced below: \"S.139(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-clause (ta) of clause (24) of section 2. shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed sunder this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far may be, apply as if it were a return required to be furnished under sub-section (1).]]\" Printed from counselvise.com 8 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 10. Now, going through the provisions to section 139(44) of the Act shows that the assessee is required to file the return as per the provisions of section 139(1) of the Act. Now, perusal of section 139(1) shows that in the case of the assessee which is required to get its account audited, the due date is 30.09.2018 and for AY 2018-19 this date was further extended to 31.10.2018 vide CBDT's order dated 24.09.2018. Now, since the assessee has filed the return on 15.11.2018, it is a belated return. Thus, there remains no dispute to the fact that the return of income filed by the assessee is a belated return which as per section 139(5) of the Act could have been filed latest by 31.03.2019. Now, at this stage, we would like to refer to Circular issued by CBDT on 23.04.2019 giving clarification with regard to time allowed for filing of return of income subsequent to insertion of clause (ba) in sub-section 1 of section 12A of the Act and the same is reproduced below F.No. 173/193/2019-ITA-1 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, Dated: 23 April, 2019 To The Pr. DGIT (Systems), New Delhi. Subject: Clarification with regard to the time allowed for filing of return of income subsequent to the insertion of Clause (ba) in subsection 1 of section 124 of the income-tax Act, 1961. Sir, Undersigned is directed to refer to the representation (s) received on above mentioned subject stating that while processing of ITR-7 for the A.Y. 2018- 19, in respect of the belated returns filed u/s 139(4) of the Income Tax Act, 1961 (Act). the following is being communicated w/s 143(1)(a) of the Act:- \"As per section 124(1)(ba) of the Income tax Act, 1961 the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (44) of section 139, within the time allowed under that section. Otherwise the exemption u/s-11 ie. sr. no 4(1) and 4 vili in schedule Part BTI is not allowed.\" Based on this, exemption is 11 of the Act has been denied to otherwise eligible trust, thereby creating huge demand. 2. In the matter, the memorandum explaining the relevant provisions of the Finance Bill, 2017 reads as under: \"as per the existing provisions of said section, the entities registered under section 12AA are required to file return of income under subsection (4A) of section 139, if the total income without giving effect to 05 Standards & Norms, Legal Series Vol. XII, Issue 1, April 2019 CBDT CLARIFICATION ON PENALTIES FOR DELAYED FILING OF RETURN IN ITR-7 the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. However, there is no clarity as to whether the said return of income is to be filed within time allowed u/s 139 of the Act or otherwise. In order to Printed from counselvise.com 9 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 provide clarity in this regard, it is proposed to further amend section 12A so as to provide for further condition that the person in receipt of the income chargeable to income tax shall furnish the return of income within the time allowed under section 139 of the Act. These amendments are clarificatory in nature. These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-19 and subsequent years.\" 3. Additionally, an excerpt of circular 02/2018 dated 15.02.2018 \"Explanatory Notes to the Provisions of the Finance Act, 2017\" on insertion of clause (ba) in Sub section (1) of section 12A is quoted as under: \"the entities registered under section 12AA are required to file return of income under sub-section (4A) of section 139 of the Income tax Act, if the total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount which is not chargeable to income-tax. Amendment to section 124 of the Income-tax has been made so as to provide for additional condition that the person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139 of the Income-tax Act.\" 3. Thus, for a trust registered U/s 12AA of the Act to avail the benefit of exemption w/s 11 shall inter-alia file its return of income within the time allowed u/s 139 of the Act. Accordingly, orders u/s 143(1)(a) in those cases in which demand has been raised on this issue may please he rectified. This issues with the approval of Chairman (CBDT). (Vinay Sheel Gautam) JCIT (OSD) (ITA-I) Telefax: 011-23093070 E-mail: vinaysheel gautama.gov.in 11. From perusal of the above referred circular, we find that in Para 3 of the said circular specifically states that a trust registered is 12AA of the Act, benefit of section 11 shall be available if the return of income is filed within the time allowed w/s 139 of the Act. It further states that orders w/s 143(1)(a) of the Act in those cases in which demand has been raised on this issue may please be rectified From the circular, we note that an amendment was brought in by insertion of clause (ba) of section 124(1) of the Act from 2018-19 onwards through which one of the requirements for claiming the benefit u/s 11 and 12 of the Act was to file the return of income within time allowed u/s 139(4A) of the Act. It seems that specially for A.Y 2018-19, when the Form IFR-7 was being processed and for such belated return, demand was raised, representations were received from various assessees on this issue. Taking note of this issue, the said CBDT Circular has issued and while dealing with this issue, the returns filed within the time allowed us 139 of the Act have been directed to be accepted for the purpose of considering benefit of deduction w/s 11 of the Act. Now, since only section 139 of the Act has been mentioned and does not specify whether it is about u/s 139(1) of the Act or section 139(5) of the Act, the view beneficial to the assessee needs to be accepted and, since section 139(1) and section 139(5) are part of section 139 only and in this section 139 and sub-section (5) provides the mechanism to file a belated return, therefore, for A.Y 2018-19, even if the assessee files the return before the last date of filing of belated return the same should be treated as due compliance to section 124(1)(ba) of the Act. For the year under appeal, the belated return could have been filed before 31.03.2019, and since the assessee has filed the return on Printed from counselvise.com 10 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 15.11.2018, therefore, considering the directions of CBDT Circular dated 23.04.2019, which are binding on the Revenue authorities, we are of the view that the assessee has fulfilled the conditions provided under sub-clause (ba) of section 124(1) of the Act and has filed the return of income within the time allowed. 12. Now, the second reason for which lower authorities have denied the deduction u/s 11 of the Act is of filing the belated audit report on form 10B of the Act. Now, clause (b) of section 124(1) of the Act provides for a condition that if the income of a trust exceeds a maximum amount which is not chargeable to tax in the previous year the account have to be audited and the person in receipt of such income furnishes the audit report before the specified date. In the case of the assessee. Form No.10B was to be filed and the relevant rule is rule 17B of the Income Tax Rules which provides that the report of audit of the accounts of a trust or institution which is required to be furnished under Clause (b) of section 124. shall be in Form No. 10B. 13. Now, on perusal of the Form 10B, we notice that the same is required to be submitted electronically, one month prior to the due date of the filing of return of income. Admittedly, in the case in hand, the audit report on form 10B has been uploaded on 30.03.2019 which is even after the date of filing the return of income on 15.11.2018. Now, before us, it has been contended by the ld counsel for the assessee that filing of audit report is directory in nature and even if report is submitted in time before the conclusion of the assessment proceedings, the same needs to be considered. Though the assessee referred to the various decisions, we find it pertinent to refer to the judgment of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust us. ITO(Exemption) (supra) wherein Para 32 of the said judgment reads as follows: \"32. We may also refer to the decision of this Court in CIT v. Gujarat Oil and Allied Industries Ltd. (1993) 201 ITR 325 (Guj), wherein it is held that the provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. This Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either before the Income-tax Officer or before the appellate authority by assigning sufficient cause.\" 14. In the above judgment, Hon'ble Court has held that filing of audit report is directory in nature and its substantial compliance would suffice. The Id. Departmental Representative failed to place before us any other binding precedents of Hon'ble Jurisdictional High Court or the Hon'ble Apex Court. Therefore, considering the ratio laid down in the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust us. ITO(Exemption) (supra), we find that though the audit report has been uploaded after the filing of return of income but the said report has been signed by the auditor on 28.10.2018 and the copy of this report is placed at 40-41 of paper book and the date of audit report is prior to the filing of the return of income, therefore, it is presumed that conducting of audit for preparation of audit report is before e-filing of the return of income but as claimed by the assessee due to technical glitches, the report was uploaded after filing the return of income. 15. Though the Hon'ble Court holds that the report should be considered even filed in the course of assessment proceedings, or before in appellate authority, however, we notice that in the instant case, the case of the assessee was not selected for scrutiny Printed from counselvise.com 11 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 assessment and it was mere processing of return by the computer with the set program. Had it been the case of scrutiny proceeding w/s 143(3) of the Act, the case could have been different. The Id. A.O may had an opportunity to go through the audit report. But still when the issue came before Id. CIT(A) who also possesses co-terminus power with that of A.O and as per section 251(1)(a) of the Act. the Id. CIT(A) in disposing the appeal against order of assessment has the power to confirm, reduce, enhance or annul the assessment, therefore. though, it was not possible to entertain the audit report while processing the return w's 143(1)(a) of the Act, but the ld. CIT(A) was well within its power to have entertained the said report and examined the same as could have been done by the A.O. 16. We, therefore, in the given facts and circumstances and respectfully following the judgment of Hon'ble Gujarat High Court in the case Sarvodaya Charitable Trust us. ITO(Exemption) (xupra), we are of the considered view that since the case of assessee is for A.Y 2018-19 and CBDT came up with a circular dated 23.04.2019 specially for A.Y 2018-19 providing that return of income to be filed within the time allowed u/s 139 of the Act, the assessee has complied with the conditions provided in sub-clause (b) and (ba) to section 12 and there is no dispute at the end of the reveme authorities that the assessee is carrying on charitable activities, for which it has been granted registration w/s 12A of the Act, the benefit of section 11 and 12 should be given to the assessee and deductions claimed by the assessee are, therefore, allowed. Thus, Ground Nos. 1 to 4 of the assessee are allowed. 17. So far as alternate plea praying that only the net income should have been subjected to tax rather than gross receipts, since we have already allowed the deduction u/s 11 and 12 of the Act to the assessee, this alternate plea becomes academic in nature. Other grounds are general in nature which needs no adjudication\" 8 The above decision has subsequently been followed in the case of Debendra and Rohini Memorial Trust (supra) adjudicating similar issue. So far as delay in filing of the Audit Report if available before the Assessing Authority same needs to be considered. For this proposition, we would like to quote the decision of this Coordinate Bench in the case of Sahaj Seva Trust Vs. ITO in ITA No.541/PUN/2025 order dated 06.05.2025. Ld. Departmental Representative failed to controvert the ratio laid down in the above decision by placing any other binding precedent in favour of the Revenue. We therefore respectfully following the decision in the case of Bangarh Educational Welfare Trust (supra) and Sahaj Seva Trust (supra) are inclined to hold that exemption w/s.11 claimed by the assessee deserved to be allowed. Accordingly, effective grounds of appeal raised on merits of the case are allowed.\" 11. Based on the factual matrix of the case and legal position enumerated above and in view of the decision (supra) of the Co-ordinate Bench of the Pune Tribunal and in the absence of any contrary material brought to our notice, we hold that the Ld. Addl./JCIT(A) was not justified in rejecting the claim of exemption u/s 11 of the Act on account of delay in filing of return of income as well as delay in uploading the audit report in Form 10B. We, therefore, set aside the order of the Ld. Addl./JCIT(A) and direct the Ld. AO/CPC to allow the claim of exemption u/s 11 of the Act Printed from counselvise.com 12 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 after due verification in accordance with law. The effective grounds of appeal raised by the assessee are accordingly allowed. 12. Similar grounds have been raised by the assessee for AY 2019-20, 2020-21 and 2021-22 which are reproduced below : ITA No. 2024/PUN/2025, AY 2019-20 “1. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in not appreciating the fact that the return of income and the audit report in Form 10B both were duly filed much before passing of the order u/s 143(1) of the Act and hence there was no reason for denying the claim u/s 11 of the Act. Thus, the addition so made and as upheld be kindly held as incorrect and unjustified and not in accordance with the provisions of the Act. 2. Without prejudice to above grounds and on the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in computing tax at maximum marginal rate instead of slab rates as applicable to a public charitable trust. Accordingly, Ld. AO be directed to compute the tax correctly considering slab rates as applicable to public charitable trust. 3. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.” ITA No. 2025/PUN/2025, AY 2020-21 “1. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the order passed u/s 143(1) of the Act and that upheld by Ld. Add/J.CIT(A), making addition of Rs. 81,77,359/- is incorrect, unjustified and is not in accordance with the provisions of sec. 11 r.w.s 12A of the Act. Accordingly, the Addition so made by Ld. AO and that upheld by Ld. CIT(A) be deleted and Appellant be granted just and proper relief in this respect. 2. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that Ld. Addl./J.CIT(A) erred in not appreciating the fact that the audit report in Form 108 was duly filed much before passing of the order u/s 250 of the Act and since Addl/J.CIT(A) is an authority having power co-terminus with that of an AO, Ld. Addl/J.CIT(A) should have considered the Form 108 so filed before him as that have been filed before completion of Assessment and accordingly, the addition so made because of delay in filing Audit report should have been deleted. 3. Without prejudice to above grounds and on the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in charging to tax entire receipts instead of surplus amount. Accordingly, Ld. AO be directed to delete the amount of addition pertaining to expenditure. Printed from counselvise.com 13 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 4. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.” ITA No. 2026/PUN/2025, AY 2021-22 “1. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the order passed u/s 143(1) of the Act and that upheld by Ld. Add/J.CIT(A), making addition of Rs. 56,54,537/- is incorrect, unjustified and is not in accordance with the provisions of sec. 11 r.w.s 12A of the Act. Accordingly, the Addition so made by Ld. AO and that upheld by Ld. CIT(A) be deleted and Appellant be granted just and proper relief in this respect. 2. On the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in not appreciating the fact that the return of income and the audit report in Form 10B both were duly filed much before passing of the order u/s 143(1) of the Act and hence there was no reason for denying the claim u/s 11 of the Act. Thus, the addition so made and as upheld be kindly held as incorrect and unjustified and not in accordance with the provisions of the Act. 3. Without prejudice to above grounds and on the facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be held that the Ld. AO and Ld. Addl./J.CIT(A) erred in charging to tax entire receipts instead of surplus amount. Accordingly, Ld. AO be directed to delete the amount of addition pertaining to expenditure. 4. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.” 13. So far as the AY 2019-20 is concerned, we find that the assessee filed his return of income on 31.03.2020 as against the due date of filing of return u/s 139(1) of the Act on 31.08.2019 and the audit report in Form 10B was filed on 22.03.2020. The Ld. CPC/AO passed the intimation order on 21.10.2020. 14. For AY 2020-21, the return was filed on 31.03.2021 as against the due date of filing of return on 15.02.2021 and Form 10B was filed on 31.03.2021. The Ld. CPC/AO passed the intimation order on 25.11.2021. 15. Similarly, for AY 2021-22, the return of income was filed on 31.03.2022 as against the due date of filing of return on 15.03.2022 and Form 10B was filed on 31.03.2022. The CPC passed intimation order on 23.08.2022. Printed from counselvise.com 14 ITA Nos.2023 to 2026/PUN/2025, AYs 2018-19 to 2021-26 16. Thus, in all the above AYs too, although the return has been filed belatedly but Form 10B has been filed before the processing of return u/s 143(1) of the Act. Since, the facts of the case and grounds of appeal for AYs 2019-20, 2020-21 and 2021-22 are similar to the facts and grounds of appeal for AY 2018-19, wherein we have decided the impugned issue in favour of the assessee vide our above order of even date, the effective grounds of appeal for AY 2019-20, 2020-21 and 2021-22 are also hereby allowed in the same terms. 17. To sum up, all the appeals in ITA Nos. 2023, 2024, 2025 & 2026/PUN/2025 for AYs 2018-19, 2019-20, 2020-21 & 2021-22 respectively are allowed. Order pronounced in the open court on 09th December, 2025. Sd/- Sd/- (Manish Borad) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 09th December, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "