THE SHAKTI FOUNDATION,CHENNAI V. ITO, EXEMPTIONS WARD-3, CHENNAI

ITA 226/CHNY/2025

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The case involves The Shakti Foundation, a charitable trust, which appealed against the order of the CIT(A) confirming the Assessing Officer's decision to deny exemption under section 11 of the Income Tax Act, 1961. The foundation had filed an audit report in Form 10B along with its return of income, but the CIT(A) upheld the Assessing Officer's decision on the grounds that the report was not filed within the stipulated time frame before the return of income. The Tribunal found that the procedural requirement of filing the audit report within a specific timeframe is not mandatory and can be submitted during the assessment or appellate proceedings. Consequently, the Tribunal remanded the case for a fresh assessment considering the audit report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107591 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P.M. SENTHIL KUMAR
• Assessee Lawyers: G. SITARAMAN
• Keywords: Set aside; Charitable institution; Application of stay
• Section: 143(1); 11; 12A; 10B

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी मनोज क ुमार अŤवाल, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member आयकर अपील सं./I.T.A. No.226/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2020-21 & S.A. No. 17/Chny/2025 [in ITA No. 226/Chny/2025] The Shakti Foundation, 9, Manikeswari Road, Kilpauk, Chennai 600 010. [PAN: AAATT3791M] Vs. The Income Tax Officer, Exemption Ward 3, Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri G. Sitaraman, CA ŮȑथŎ की ओर से/Respondent by : Shri P.M. Senthil Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 31.01.2025 घोषणा की तारीख /Date of Pronouncement : 31.01.2025 आदेश /O R D E R PER MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order dated 20.01.2025 passed by the Addl/JCIT(A), Udaipur for the assessment year 2020-21. 2. While hearing the stay application, it was brought to our notice by the ld. AR Shri G. Sitaraman, CA that there was no proper opportunity for the assessee in support of its claim and prayed to dispose of the main appeal by affording an opportunity to the assessee. Therefore, with the I.T.A. No.226/Chny/25 & SA No.17/Chny/25 2 consent of both the parties, we proceed to hear and adjudicate the main appeal. 3. At the outset, we note that the assessee is a charitable trust, having registration under section 12A of the Income Tax Act, 1961 [“Act” in short] and filed return of income declaring total income at NIL after claiming exemption under section 11 of the Act. The Assessing Officer, CPC denied exemption and brought to tax entire gross receipt. Having aggrieved under order section 143(1) of the Act, the assessee preferred an appeal before the ld. CIT(A) claiming exemption and the ld. CIT(A) confirmed the view of the Assessing Officer, CPC solely on the ground that no audit report in Form 10B was filed before one month of filing return of income. 4. The ld. AR vehemently contended that the assessee filed audit report in Form 10B along with the return of income within due date of filing of return of income on 15.02.2021 and filing of audit report along with return of income before one month is procedural nature and not mandatory. The ld. AR referred to many orders of this Tribunal, where, the Tribunal held that filing of audit report in Form 10B is not mandatory, but, can be filed during the course of assessment proceedings as well as in first appellate proceedings. I.T.A. No.226/Chny/25 & SA No.17/Chny/25 3 5. The ld. DR Shri P.M. Senthil Kumar, JCIT did not dispute the same. 6. Having heard both the parties, we find force in the arguments of the ld. AR that it is a settled principle that the filing of audit report in 10B is procedural nature and not mandatory and as rightly pointed out that this Tribunal remanded similar issues to the file of the Assessing Officer for his fresh consideration in allowing exemption under section 11 of the Act taking into account the audit report. Therefore, taking into consideration the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of the Jurisdictional Assessing Officer for fresh consideration to examine the claim of exemption under section 11 of the Act with reference to the audit report in Form 10B. Thus, the order of the ld. CIT(A) is not justified and set aside. The assessee is at liberty file any details as may be required by the JAO for consideration. Thus, the grounds raised by the assessee are allowed for statistical purposes. S.A. No. 17/Chny/2025 7. In view of the decision in remanding the main appeal to the file of the Jurisdictional Assessing Officer for fresh adjudication, the Stay Application filed in SA No. 17/Chny/2025 stands closed. I.T.A. No.226/Chny/25 & SA No.17/Chny/25 4 8. In the result, the appeal filed by the assessee is allowed for statistical purposes and the stay application is dismissed. Order pronounced in the open Court on 31st January, 2025 at Chennai. Sx/- Sd/- (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER Chennai, Dated, 31.01.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "