M/s. Shri Sanatan Dharam Sabha vs Income Tax Officer, Ward- Exemption 2(2)

This assessee’s appeal for assessment year 2022-23, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-7, Kolkata [in short, the “CIT(A)”], Delhi’s DIN and order no. ITBA/APL/S/250/2026-27/1089654639(1), dated 12.06.2026 involving proceedings under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

Suffice to say, it transpires during the course of hearing that both the learned lower authorities have disallowed section 11 exemption claim(s) to the assessee; for the sole reason that it could not file/upload the prescribed 10B tax audit report within “due” date of filing section 139(1) return. The Revenue vehemently argues that the impugned disallowance of section 11 exemption deserves to be upheld as the above compliance is mandatory in nature.

I find no merit in the Revenue’s instant sole substantive grievance in light of CIT vs. Xavier Kelavani Mandal (P.) Ltd., [2014] 41 taxmann.com 184 (Guj.) has already settled the issue in assessee’s favour that the foregoing compliance of filing/upholding form 10B tax audit report is only directory than mandatory in nature. That being the case, I find merit in the assessee’s instant sole substantive grievance and direct the learned Assessing Officer to frame its consequential computation as per law after verifying all the relevant facts. No other ground or argument has been pressed before us.

These assessee’s appeal is allowed.