Food Safety And Standards Authority Of India vs DCIT Circle Exempt 1(1)

ORDER

“4.

We find no merit to accept the Revenue’s foregoing vehement contentions. We make it clear first of all that the learned CIT(A/ NFAC detailed lower appellate discussion under challenge; reads as under:

“5.5

Ground no 03 & 3.3 regarding denying the claim of exemption of Rs. 25,99,33,473/- under section 11 and 12 of the Act:- From the perusal of reply submitted by the appellant dated 09.09.2024 & 16.06.2025, It has been observed that the appellant has furnished the statement to be furnished to the AO in Form 10 on 09.09.2024 and Audit Report u/s 12A(b) of the Act in form no 10B has been submitted on 05.09.2024. In the application for admission of additional evidence submitted vide Annexure 06 of the reply dated 16.06.2025, the appellant has submitted that:-

In the facts of instant case, Form 10B with correct details of income applied and income accumulated or set apart along with the Form 10 could not be made available before Ld. AO during the course of assessment proceedings due to negligence of legal consultant who was taking care of assessment proceedings. Accordingly, the Appellant hereby submits the following additional documents:

Copy of Form 10 containing the details of amount of income accumulated or set apart, enclosed as Annexure 1.

Copy of revised Form 10B, enclosed as Annexure 2. Both the documents submitted vide Annexure 06 of the ibid reply are reproduced below:-

Both the documents submitted vide Annexure 06 of the ibid reply are reproduced below:

In this regard, vide para 6.2 of the assessment order, the AO held that:-Further it is pertinent to mention here that Assessee is registered under section 12A/12AA of the I.T. Act, 1961 and it could have exercised the option of Amount accumulated or set apart under section 11(2) however it is seen that no such option has been exercised by the assessee. In view of this, exemption of sum amounting to Rs. 25,99,344,473/- cannot be allowed under section 11 & 12 of I.T. Act, 1961 as well.

5.5.1

It is evident that the appellant has not exercised the option of Section 11(2) of the Act at the time of filing Return of Income. It is a matter of fact that these forms are to be submitted to the AO. The appellant has itself admitted the lapse in filing form 10 & 10B to the AO by saying that Form 10B with correct details of income applied and income accumulated or set apart along with the Form 10 could not be made available before Ld. AO during the course of assessment proceedings due to negligence of legal consultant who was taking care of assessment proceedings. Form no 10 has been submitted to the AO in Sep 2024. Decision on this form filed before AO is still pending.

5.5.2

As per procedure, Form 10 has to be filed before the due date for filing of Return of Income. If due to any compelling circumstances, there is any delay in submitting Form 10, the delay has to be condoned by the Jurisdictional CIT(Exemptions). For this, a petition for Condonation of delay has to be filed before the Jurisdictional CIT(Exemptions). In the present case for A.Y. 2017-18, no document has been furnished by the appellant which proves that application for Condonation of delay has been filed before the Jurisdictional CIT(Exemptions). So, no cognizance of these documents can be taken at this stage.

5.5.3

Further, in application for admission of additional evidence submitted vide Annexure 06 of the reply dated 16.06.2025, the appellant has submitted that:-

It is also pertinent to mention that taking the cognizance of the fact that the Form 10 could not be filed within the specified time for AY 2017-18, being the initial years when e-filing of the subject form was prescribed, CBDT vide its Circular No. 7/2018 dated December 20, 2018, authorized the Commissioners of Income Tax to admit belated application in Form 10 for the assessee. In this regard, the appellant has also submitted copy of the said circular which is reproduced below:

5.5.4

From the perusal of the said circular, it has been observed that the circular pertains to the A.Y. 2016-17 whereas the instant appeal pertains to the A.Y. 2017-18. Thus, this has no relevance as far as contention of the appellant in the Ground of appeal is concerned. In view of the foregoing paras and all the facts and circumstances, I find no reason to interfere with the findings of the AO. Accordingly, the grounds raised in this regard are dismissed.”

5.

Suffice to say it has already come on record that not only the CBDT Circular (s) issued/runtime to lines itself provide for condonation of such a delay in filing/uploading of Form 10 as well as Form 10B (supra) but also a lenient view already stands taken in the preceding assessment year 2016-17 as extracted in the foregoing detailed lower appellate discussion. This is indeed coupled with the fact the case law CIT v. Xavier Kelavani Mandal (P.) Ltd. (2014) 41 taxmann.com 184 (Guj) have further settled the issue that such a compliance of filing/uploading is directing than a mandatory provision only.

6.

We thus accept the assessee’s instant first and foremost substantive ground claiming section 11 assumption in principle and direct the learned assessing authority to frame its consequential computation afresh after verification of the necessary relevant facts, as per law.

7.

This assessee’s appeal is allowed.”