Vashya Aggarwal Sabha vs Ld. Assessing Officer

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-6, Mumbai [in short ‘the CIT(A)’] dated 12.03.2026, for Assessment Year 2022-23.

Shri Sidhant Goyal, appearing on behalf of the assessee submits that the solitary issue raised in this appeal is delay in filing of Form 10B which resulted in denial of benefit of section 11 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) to the assessee, a Trust. Narrating sequence of events, he submitted that the Form 10B was signed by the Auditors on 07.10.2022 i.e. the last date for filing of return of income. The same was uploaded on the same date. However, on account of technical glitches in the e-filing portal of the Department the assessee could not affix its digital signature. Form 10B filed by the Auditors of the assessee was accepted by the department on 28.12.2022 after digital signature of the assessee. The CPC vide intimation dated 14.02.2023 made proposed adjustment u/s.143(1)(a) of the Act denying exemption u/s.11 of the Act on account of non-filing of Form 10B in time. The assessee vide reply dated 16.03.2023 explained that Form 10B was uploaded by Auditors in time and the exemption has been claimed validly. However, the CPC vide intimation u/s.143(1) of the Act dated 31.03.2023 denied the benefit of section 11 of the Act for non-submission of Form 10B in time. The ld. Counsel submitted that in the first instance, the delay in filing of Form 10B is not attributable to the assessee as the delay has occurred on account of technical glitches in the portal of the department, secondly, even if there is delay it is not fatal as Form 10B was filed much before the proposed adjustment made by the CPC u/s.143(1)(a) of the Act. In support of his submissions, the ld. Counsel placed reliance on the decision in the case of Puran Chand Arora Charitable Trust, 172 taxmann.com 161 (Del. ITAT).

Per contra, Shri Nirmal Nangia, representing the department supported the impugned order and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the lower authorities examined. A perusal of the impugned order shows that the CIT(A) initially rejected appeal of the assessee on account of delay. However, the CIT(A), thereafter, has proceeded to decide appeal on merit as well. Once, the appeal is decided on merits, it is presumed that the delay in filing of appeal is condoned.

The limited issue for adjudication in the present appeal is denial of benefit of section 11 of the Act, consequent to delay in filing of Form 10B. The assessee has explained the reason for delay in filing of Form 10B. The delay has been attributed to technical glitches in the e-filing portal of the Department. A perusal of Form 10B reveals that the same has been signed by the Auditors of the assessee on 07.10.2022. Once Form 10B has been prepared and signed by the Auditors on 07.10.2022, ostansibly, there can be no reason for delay in filing the said Form. Therefore, the reasons stated by the assessee in acceptance of Form by the department on 28.12.2022 appears to be plausible. The delay in filing of Form 10B cannot be attributed to the assessee. Nevertheless, the delay in filing of Form 10B is procedural, hence, it cannot jeopardize assessee’s entitlement to exemption u/s.11 of the Act. The Division Bench of the Tribunal in the case of Puran Chand Arora Charitable Trust (supra) in similar set of facts has held that filing of Form 10B is directory, non-filing of Form 10B cannot be a reason to deny section 11 exemption to a trust.

In the result, the impugned order is set aside and the appeal of the assessee is allowed.