Delayed Form 10B filing does not defeat section 11 application when audit report is on record before processing

5-Second Takeaway

The court held that a charitable trust’s application of income under section 11 could not be disallowed merely because Form 10B was filed after the due date, so long as the audit report was available before processing under section 143(1). It also dismissed the Revenue’s appeal and treated the assessee’s cross-objection as academic and infructuous.

The dispute concerned a charitable trust registered under sections 12A and 12AB that had filed its audit report in Form 10B after the due date. The CPC or Assessing Officer disallowed application of income under section 11 solely on that ground, even though the report had been furnished before the return was processed under section 143(1).

The court held that the decisive requirement was not rigid punctual filing with the return, but availability of the audit report when the claim was examined. On the facts, the trust was carrying on activities in accordance with its objects, and the report was on record before processing was completed.

The court also distinguished Principal CIT v. Wipro Ltd., noting that it dealt with an exemption provision under Chapter III, whereas this case involved the use of an audit report for scrutiny of a section 11 claim.

Accordingly, the court affirmed the order allowing the claim, dismissed the Revenue’s grounds of appeal, and held the assessee’s cross-objection to be academic and infructuous.