The requirement to file audit reports in Form 10B or 10AB for claiming income tax exemption under Section 11 of the Act is procedural; thus, delay in filing such forms is a curable defect, and exemption cannot be denied if the forms are furnished before the assessment intimation.

आदेश/ORDER

PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER

This appeal is filed by the Assessee as against the appellate order dated 11-06-2025 passed by the Addl./Joint Commissioner of Income Tax (Appeal)-1, Chennai arising out of the intimation passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to Asst. Year 2024-25.

2. Brief facts of the case is that the assessee is a State Government Organization registered as a Public Charitable Trust and also having registration under section 12AA of the I.T. Act.

3. The solitary issue in this appeal is late filing of Form 10B thereby exemption u/s. 11 of the Act was disallowed while processing the return u/s. 143(1) of the Act by the CPC. The assessee filed condonation of delay of 35 days in filing Form 10B vide application dated 24-12-2024 before Ld. PCIT, which was pending consideration. Therefore assessee filed appeal before Ld. CIT(A) which was dismissed stating that the Ld. CIT(A) does not have the power to condone the delay, thereby confirmed the addition made by CPC.

4. Aggrieved against the same, assessee is in appeal before us raising the following Grounds of Appeal:

1. The Ld. AddI/Jt. CIT(A)-1, Chennai, has erred in law and on the facts and circumstances of the case by confirming the conclusion by the Assessing Officer that the Appellant is not eligible for exemption u/s.11 of the I.T. Act. 1961 as the Audit Report in Form 10B filed by the Appellant is not filed in prescribed time of one month before the due date of filing of the Return u/s.139(1) of the 1.T. Act, 1961.

2. The Ld. Addl./Jt. CIT(A)-1, Chennai, has erred in law and on facts and circumstances of the case by confirming the disallowance made by the Assessing Officer of deduction of Ps.82,75,229/-claimed by the Appellant for income set apart u/s.11(1)(a) of the I.T. Act, 1951 at 15% of income, merely on technical ground that the Appellant has not filed Audit Report in Form 10B within stipulated time and hence not eligible for exemption u/s.11 of the LT. Act, 1961.

3. The Ld. Addl/Jt. CIT(A)-1, Chennai, has erred in law and on facts and circumstances of the case by confirming the disallowance made by the Assessing Officer of disallowing deduction of Rs.2,04,57,744/- claimed by the Appellant for application in respect of capital expenditure, merely on technical ground that the Appellant has not filed Audit Report in Form 10B within stipulated time and hence not eligible for exemption u/s.11 of the LT. Act, 1961.

4. The Appellant prays for the following:

(i) the Appellant may kindly be held as eligible for exemption u/s.11 of the 1.T. Act, 1961 and accordingly income of the Appellant may kindly be directed to be assessed at Rs.Nil as per the Return of Income e-filed.

(ii) that the disallowance of Rs.82,75,229/- for income set apart u/s 11(1)(a) at 15% of income made by the Assessing Officer may kindly be deleted fully.

(iii) that the disallowance of Rs.2,04,57,744/- for application in respect of capital expenditure made by the Assessing Officer may kindly be deleted fully.

5. The Appellant prays to reserve the right to add, alter, amend or withdraw any of the above grounds of appeal.

5. At the outset, Ld. Counsel appearing for the assessee submitted that similar issue was considered by this Tribunal in assessee’s own case for the earlier Asst. Year 2022-23. The main reason for the delay is due to the Chief Account Officer had resigned since 16-03-2022 and no Chief Account Officer had been immediately appointed by the Government Authority, there was delay in filing the Fo