Filing of the Audit Report in Form 103B is directory and not mandatory, appeals petitioner

The Income Tax Appellate Tribunal (ITAT) has ruled that filing the Audit Report in Form 103B is directory and not mandatory, meaning it can be submitted at the assessment stage. This decision came in an appeal by Sanskriti KMV School challenging the denial of exemption claims. The tribunal considered previous rulings in the assessee's favour and a CBDT circular regarding condonation of delays in filing related forms.

IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH
‘SMC’ CHANDIGARH

BEFORE: SMT. DIVA SINGH, JM

ITA No. 7/CHD/2020
Assessment Year : 2016-17 

Sanskriti KMV School,
Tanda Road,
Jalandhar.
PAN No: AACAS5326G
Appellant

VS

The ACIT (Exemptions)
Circle-1,
Chandigarh.
Respondent

Assessee by : Shri Y.K. Sud, C.A.
Revenue by : Shri Ashok Khanna, Addl. CIT

Date of Hearing : 23.03.2021
Date of Pronouncement : 29.04.2021

Hearing conducted via Webex

ORDER

The present appeal has been filed by the assessee wherein the correctness of the order dated 03.10.2019 of CIT(A)-II Jalandhar  pertaining to 2016-17 assessment year is assailed on the following grounds:

1. That the CIT(A) was not justified in upholding the action of the AO for denying the exemption of Rs. 4702618/- claimed by the assessee u/s 11 of the Income Tax Act, 1961.

2. That both AO & CIT(A) failed to appreciate that the exemption u/s 10(23c)(vi) was granted by the IT AT vide their order dated 22.02.2017 effective from Asst. Year 2015-16. Therefore the CIT(A) erred is not granting exemption on the pretext of filling of Form 10BB on 06.06.2017 during the pendency of assessment proceedings.

3. That both CIT(A) & AO failed to appreciate that filing of the Audit Report in Form 103B is directory and not mandatory and can be filed at the stage of assessment. 

4. That CIT(A) wrongly ignored the Circular No. 10/2019 dated 22.05.2019 . wherein the CBDT had granted blanket permission of condonation of delay in filing Form 10BB pertaining to Asst. Year 2016-17 which was binding on both the authorities.

5. That the order of CIT(A) & AO are against the law and facts of the case.

2. At the time of hearing, ld. AR inviting attention to the impugned order submitted that the reasons prevailing with the ld. Commissioner for denying the claim of the assessee were not relevant and maintainable in law. Reliance was placed upon the order of the ITAT passed in assessee's own case for the immediately preceding assessment year dated 09.05.2019 wherein in ITA 1397/CHD/2018 on similar facts and circumstances, the departmental appeal was dismissed, copy of this order was filed. On a reading of this specific order, it was noticed that since the impugned order is dated 03.10.2019, the order of the ITAT having already been passed in May, 2019 was thus available to the parties prior to the passing of the impugned order, thus, why it was not relied upon before the First Appellate Authority it was questioned.

3. The ld. AR submitted that the order had specifically been relied upon. 

4. In the circumstances, the ld. AR was required to point out from the submissions advanced before the ld. CIT(A) whether the specific order had been brought to the attention of the ld. CIT(A). On a reading of the submissions extracted in para 3, it was submitted that the assessee had specifically invited attention to the fact that in the immediately preceding assessment year, the order passed by the CIT(A) was in assessee's favour. Relying upon the written submissions extracted in the order, it was his submission that on the same set of facts and circumstances, the order of the CIT(A) in assessee's own case decided in its favour was cited before the CIT(A) and the fact that this order was upheld by the ITAT was also brought to the notice of the CIT(A). 

To know more in details find the attachment file