Advance Filing Of Form 10B Along With I-T Return Is Not Mandatory Requirement For Claiming Exemption U/s 11 & 12: Ahmedabad ITAT

The Bench of Annapurna Gupta (Accountant Member) and T.R. Senthil Kumar (Judicial Member) observed that “since the failure to file Form No.10B was the only reason for the adjustment made to the return of income of the assessee subjecting its entire income to tax on the filing of the Form 10B to the CIT(A), the assessee ought to have been allowed its claim of exemption to its entire income”. (Para 11)

As per the brief facts of the case, the issue relates to the adjustment made to the income returned by the assessee in the intimation made by the CPC u/s 143(1) of the Act. The adjustment relating to entire income of the assessee trust including corpus donation, voluntary donation and other income, amounting in all to Rs.16,40,71,000/- being denied exemption claimed u/s 11/12 of the Act to the assessee and treated as entirely taxable in the intimation u/s 143(1) of the Act.

The Bench found from a perusal of the intimation u/s 143(1) that the assessee had disclosed voluntary contribution forming part of corpus to the tune of Rs.16,40,71,000/- along with voluntary contribution other than corpus funds amounting to Rs.14,000/-.

The Bench noted that while the assessee had claimed its entire income exempt in terms of Sections 11 & 12 of the Act, the intimation made u/s 143(1) denied the assessee's claim of exemption subjecting its entire income of Rs.16.40 crores to tax.

The reasons for the denial of exemption in the intimation find mention in the column “incorrect claim” of the intimation, as the non-furnishing of Audited Report in Form 10B, at least one month prior to the due date of furnishing return of income, added the Bench.

The Bench therefore observed that assessee's claim of exemption of its entire income including voluntary donation, corpus donation and other income amounting in all to Rs.16.40 crores was denied on the ground that the assessee had failed to furnish the necessary Form 10B one month prior to the due date of filing of return of income u/s 139(1) of the Act.

The ITAT therefore concluded that the assessee's claim of exemption to its entire income u/s 11 is to be allowed and the CPC is directed to delete the adjustment made in the intimation u/s 143(1) of the Act.

Counsel for Appellant/ Assessee: Dileep K. Vaidya

Counsel for Respondent/ Revenue: Sudhendu Das

Case Title: Anjana Foundation Vadodara verses AO

Case Number: ITA No. 695/Ahd/2023

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