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Judgment
ORDER
This assessee’s appeal for Assessment Year 2021-22 arises against the C IT(A)/Addl./JCIT(A)-1, Visakhapatnam’s DIN & order No . ITBA/APL/S/250/2025-26/1084271866(1) dated 31.12.2025, in proceeding s u/s 143(1) of the Inco me Tax Act, 1961 ( in short “ the Act”).
Heard both the p arties at length. Case file perused.
This assessee’s appeal raises the following substantive grounds:
“1 That the l earned Additional/Joi nt Commissioner5 of Income Tax, Appeal -1, Visakhapa tnam, has erred both i n law and on fac ts in upholdi ng t he de ter mi nati on of t he to tal i ncome of t he appel lant at Rs. 11,78,001/- as against d eclared ‘Nil’ r eturned income i n an intimation dat ed 23.08.2022 under sec tion 143(1) of the Act.
2 That impugned order dated 31.12.2025 u/s 250 of the Act wit hout granti ng any fair, m eani ngful and pr oper opportunity to t he ap pellant and the refore the same is contrary to principle of nat ural justice and henc e vitiated.
3 That the l earned Additio nal/Joi nt C ommissioner of Income Tax, Appeal -1, Visakhapa tnam, has erred both i n law and on facts in upholdi ng the denial of claim of exemption of Rs . 10,35,741/- u/s 11 of the Act on acco unt t hat a ppellant had filed t he FORM 10B electr onically on 05.07.2023 after t he fi ling of retur n of income on 24.12.2021; though appellant was required to furnish t he Audit Repor t i n t he Form N o. 10 13 electr onically one month pri or to the due dat e for furnishing the R eturn of Inco me u/s 139(1) of the Act.
4 That even otherwise the adj ustments so made i n the intimati on u/s 143(1) of the Act are debatable and contentious issues and thus adjus tment is untenable.
5 That the l earned Additio nal/Joi nt C ommissioner of Income Tax, Appeal -1, Visakhapa tnam, has failed to appr eciate t hat intimatio n dat ed 23.8.2022 was made without gr anti ng oppor tunity much less fair meani ngf ul and effecti ve o pportunit y and ther efor e such an intim ati on is otherwise viti ated.
5.1That the l earned Additio nal/Joi nt C ommissioner of Income Tax, Appeal -1, Visakhapa tnam, has failed to appr eciate that adjustment made in i nti mation dated 23.8.2022 are made wi thout jurisdiction; and the refore deserves to be quas hed as such.
5.2That the l earned Additio nal/Joi nt C ommissioner of Income Tax, Appeal -1, Visakhapa tnam, has failed to appr eciate that adjustment made in i nti mation dated 23.8.2022 was wit hout valid reaso ns and the refore unreasonable is other wise a nullity. ”
A perusal of the assessee’ s above extracted pleadings indicates that both the learned lower authorities have refused its section 11 exemption claim for the sole reason of belated filing of tax aud it report Form 10 B, on or before the due date of filing o f section 139(1) return. The Revenue’ s case acco rdingly is that the above compliance o f timely filing of Form 10B tax audit report is mandatory in nature. Case law CIT vs. Xavier Kelavani Mandal (P.) Ltd., (2014) 41 taxmann.com 184 (Guj.) has already settled the issue in asse ssee’s favour that the foregoing compliance of filing/uploading form 1 0B tax audit report is directory than a mandatory provision. That being the case, I find merit in the assessee’s instant sole substantive grievance and direct the lear ned Assessing Officer to frame his consequential computation as per law after verifying all the relevant facts.
This assessee’s appeal is allowed.