CIT(A) has power to condone delay in filing belated Audit Report if reasonable cause is shown: ITAT

The assessee has filed its return of income for the assessment year 2018-19 and audit report well before the due date of filing of return of income. The CPC, Bangalore processed the return of assessee u/s 143(1) of the Act and created a demand of Rs. 2,27,420 by denying exemption u/s 11 of the Act to the assessee’s trust for non-filing of Form No 10B along with the return of income. The CIT(A) also not considered the plea of the assessee and dismissed the appeal of the assessee.

The Tribunal observed that in the present case before us, the delay is for a few hours which could be condoned as there is a reason that there is a malfunctioning/virus attack in the computer system and consequent data loss which is beyond the control of the assessee. Also, the entire contribution received by the assessee’s trust was accordingly considered as income without taking into account the amount spent towards charity and raised a tax demand of Rs. 2,27,420. The ld. CIT(A) had the power for condoning belated applications in filing Form No 10B wherever the assessee was prevented by reasonable cause from filing such applications within the stipulated time. Hence, the orders of lower authorities were reversed and the AO was directed to accept the audit report in Form No.10B as filed within the time and the delay is condoned. Therefore, the appeal filed by the assessee was allowed.