One day. That’s how narrow the margin was between a Tiruppur charitable trust keeping its tax exemption and losing Rs.49.40 lakh to a demand raised on its entire gross receipts. The trust’s Form 10B audit report was due on 15 February 2022. It was filed on 16 February 2022. This was a case of Form 10B filed one day late, but the CPC’s system did not care about the trust’s charitable work, its 12AA registration, or the substance of its compliance — it saw a one-day Form 10B delay and denied Section 11 exemption outright. The ITAT Chennai Bench has now stepped in with a ruling that examines whether Form 10B filed one day late can justify denial of Section 11 exemption, drawing a sharper line between form and substance in exemption claims. It is a line every trust, CA, and compliance officer filing Form 10B needs to understand.
Quick Answer
Can Section 11 exemption be denied because Form 10B was filed one day late?No—not merely for that reason. The ITAT Chennai held that Form No. 10B is a procedural and directory requirement. Therefore, a charitable trust cannot be denied exemption under Section 11 solely because Form 10B was filed after the prescribed due date, provided the other substantive conditions for claiming exemption are fulfilled.
Case Snapshot
| Case Name | M/s. M.N. Chickkanna Chettiar Trust v. Assistant Commissioner of Income Tax (Exemptions), Coimbatore |
| Citation | ITA No. 4065/CHNY/2025 |
| Court / Bench | Income Tax Appellate Tribunal, ‘B’ Bench, Chennai |
| Coram | Shri George George K (Vice President) & Ms. Padmavathy S (Accountant Member) |
| Assessment Year | 2021-22 |
| Date of Hearing | 31 July 2026 |
| Date of Pronouncement | 3 August 2026 |
| Key Issue | Whether Section 11 exemption can be denied solely because Form 10B was filed one day after the prescribed due date |
| Outcome | Appeal allowed — AO directed to grant Section 11 exemption, subject to fulfilment of the other substantive conditions, despite the one-day delay in filing Form 10B |
Table of Contents
Form 10B Filed One Day Late: Legal Issue Under Section 11
Section 11 of the Income Tax Act, 1961 provides exemption for income of a charitable or religious trust applied towards charitable or religious purposes, subject to the applicable statutory conditions. One of the relevant compliance requirements is the furnishing of an audit report in Form No. 10B under Section 12A(1)(b). The question before the Tribunal was narrow but consequential: can a trust that has Form 10B filed one day late, but has filed its return of income on time and satisfied the other substantive conditions for exemption, be denied the exemption claimed under Section 11 solely because of that delay? In other words, was the Form 10B filing requirement mandatory in effect, or procedural and directory in nature?
Facts of the Case
The assessee is a charitable trust registered under Section 12AA. For AY 2021-22, it filed its return of income on 16 February 2022, declaring nil income after claiming exemption under Section 11. The due date for filing the audit report in Form No. 10B was 15 February 2022. The trust had Form 10B filed one day late, on 16 February 2022, resulting in a delay of exactly one day.
The CPC processed the return under Section 143(1) on 23 August 2022 and denied the Section 11 exemption solely because Form 10B had been filed after the prescribed due date. Consequently, the entire gross receipts of ₹1,19,11,595 were brought to tax at the maximum marginal rate, resulting in a demand of ₹49,40,230.
The trust applied to the CIT (Exemptions) under Section 119(2)(b) seeking condonation of the delay in filing Form 10B. The petition was rejected on 11 January 2025. The trust then appealed against the Section 143(1) intimation before the First Appellate Authority (FAA), with a delay of 895 days in filing the appeal itself. The FAA condoned the 895-day delay but, taking note of the CIT(E)’s rejection of the condonation petition, upheld the denial of exemption. However, on an alternate plea, the FAA directed that tax be computed on net income rather than on gross receipts. The appeal was therefore partly allowed at the FAA stage, but the trust’s claim for Section 11 exemption remained unsuccessful.
Aggrieved by this decision, the trust carried the matter before the ITAT Chennai Bench, where the issue of Form 10B filed one day late was considered in light of the Tribunal’s earlier decision in the assessee’s own case.
Arguments of the Parties
For the Assessee (Ld. AR)
- The issue was squarely covered by the Tribunal’s own earlier order in the assessee’s case for AY 2020-21 (ITA No. 1568/CHNY/2025, dated 15.10.2025), where — on a 19-day delay in filing Form 10B — the Tribunal had already directed the AO to grant Section 11 exemption.
- In that earlier order, it had been held that the requirement to furnish the audit report is procedural and directory, not mandatory, and that substantial compliance suffices once the substantive conditions for exemption are met.
- A body of coordinate-bench and High Court authority (discussed below) supported treating Form 10B timelines as directory rather than mandatory.
For the Revenue (Ld. DR)
- Supported the findings of the FAA, which had upheld the denial of exemption after the CIT(E) had already refused to condone the delay in filing Form 10B under Section 119(2)(b).
- No independent additional argument is recorded beyond backing the lower authority’s view that the exemption could not survive once statutory condonation had been refused.
Tribunal’s Decision
The Tribunal ruled in favour of the assessee and allowed the appeal. It observed that filing Form No. 10B is a procedural and directory requirement. Therefore, a delay in filing the audit report, by itself, cannot be a reason to deny exemption under Section 11. The AO was directed to grant the exemption claimed by the trust, subject to the fulfilment of the other substantive conditions under the Act.
Reasoning Behind the Decision
The Tribunal largely followed its own earlier decision in the assessee’s case for AY 2020-21 (ITA No. 1568/CHNY/2025). The Bench noted that the facts were identical, except that the delay in the earlier year was 19 days, whereas the present case involved a delay of only one day. Relying on that decision, the Tribunal held that the same legal position applied to the present appeal.
In the earlier decision, the Tribunal had considered several judicial authorities on the nature of the Form 10B filing requirement. It distinguished the Supreme Court’s decision in PCIT v. Wipro Ltd. (Civil Appeal No. 1499 of 2022), relied upon by the Revenue, on the ground that Wipro concerned a mandatory declaration under Section 10B(8) in a different statutory scheme. According to the Tribunal, that decision did not govern the filing of Form 10B under Section 12A(1)(b) in the context of Section 11 exemption.
The Tribunal also referred to the Gujarat High Court’s decision in CIT(E) v. Shri Laxmanarayan Dev Shrishan Seva Khendra [2024], which followed the approach adopted in Sarvodaya Charitable Trust v. ITO [2021] 125 taxmann.com 75 (Guj). These decisions supported a practical and judicious approach to condoning delays in filing Form 10B where the assessee had otherwise complied with the substantive requirements for exemption.
In addition, the Tribunal relied on the jurisdictional Madras High Court’s decision in Chandraprabhuji Maharaj Jain v. DCIT [2019] 110 taxmann.com 11 (Mad). That decision emphasised that, where an assessee is otherwise entitled to a statutory benefit, the authority should examine whether the benefit is admissible rather than deny it merely on account of a technical lapse. The Tribunal also referred to coordinate-Bench decisions in Shakti Foundation, Kaakkum Karangal, and Alternative India for Development, which treated the Form 10B filing requirement as directory rather than mandatory.
Applying these principles to the present case, the Tribunal held that a delay of one day in furnishing Form 10B could not, by itself, justify denial of the entire Section 11 exemption. Once the substantive conditions for exemption were satisfied, the procedural delay was not sufficient to deprive the trust of the benefit of exemption altogether.
Key Legal Principle
Filing Form No. 10B is a procedural and directory requirement, not an absolute precondition for claiming exemption under Section 11. Where the trust satisfies the substantive conditions for exemption, a delay in furnishing the audit report—whether one day or 19 days—cannot, by itself, justify denial of the exemption. A procedural lapse should not result in the trust losing the benefit of Section 11 altogether.
Practical Implications
- For trusts and CAs: A CPC intimation denying Section 11 exemption purely for a belated Form 10B is contestable — it should not be accepted as final without testing it against this line of authority.
- File Form 10B regardless of the deadline having passed. The Tribunal’s reasoning turns on substantial compliance; a trust that has filed the form late — even during appellate proceedings — is on stronger footing than one that has not filed it at all.
- Section 119(2)(b) condonation and appellate remedy are not mutually exclusive. Even after the CIT(E) rejects condonation of delay, the exemption question can still be separately agitated on merits before the appellate authorities and the Tribunal.
- Keep the substantive file clean. The Tribunal’s direction to grant exemption is expressly “subject to the fulfilment of the other substantive conditions” — the ruling is not a blanket waiver of every Section 11 requirement, only of the Form 10B timeline.
- Don’t delay the appeal itself. This trust also had to separately get an 895-day delay in filing its first appeal condoned; the underlying exemption argument was strong, but the procedural risk of a long delay in appealing was an entirely avoidable complication.
Related Judgments and Limitations
| Case | Forum | Relevance |
|---|---|---|
| M.N. Chickkanna Chettiar Trust v. ITO, AY 2020-21 (ITA No.1568/CHNY/2025) | ITAT Chennai | Assessee’s own prior case; 19-day Form 10B delay held directory — directly adopted here |
| CIT(E) v. Shri Laxmanarayan Dev Shrishan Seva Khendra, 2024 (10) TMI 99 | Gujarat HC | Distinguished Wipro Ltd.; upheld condonation of Form 10B delay |
| Sarvodaya Charitable Trust v. ITO [2021] 125 taxmann.com 75 | Gujarat HC | Exemption cannot be denied merely on a bar of limitation in furnishing Form 10B |
| Chandraprabhuji Maharaj Jain v. DCIT [2019] 110 taxmann.com 11 | Madras HC (jurisdictional) | Authority must examine admissibility of a statutory benefit rather than foreclose on technicalities |
| PCIT v. Wipro Ltd., Civil Appeal No. 1499 of 2022 | Supreme Court | Distinguished — concerned a mandatory Section 10B(8) declaration, unrelated to Form 10B under Section 11/12A |
| Association of Indian Panelboard Manufacturer v. DCIT [2023] 157 taxmann.com 550 | Gujarat HC | Form 10B directory, not mandatory; reversed a contrary Ahmedabad Tribunal view |
| CIT v. Xavier Kelavani Mandal (P.) Ltd. [2014] 41 taxmann.com 184 | Gujarat HC | Early authority for the directory-nature position |
| Alternative India for Development v. ITO (ITA No.2114/Chny/2024) | ITAT Chennai (coordinate bench) | Cited in the assessee’s own precedent as further coordinate-bench support for the directory-nature view |
| Puran Chand Arora Charitable Trust v. ITO [2025] 172 taxmann.com 161 | Delhi Tribunal | Consistent view — Form 10B delay not fatal to exemption |
| Trilok Singh Bhandari Charitable Trust v. ITO [2025] 174 taxmann.com 737 | Delhi Tribunal | Followed the Madras HC’s Chandraprabhuji Maharaj Jain ruling |
| Shakti Foundation v. ITO (ITA No.226/Chny/2025); Kaakkum Karangal v. ITO (ITA No.1166/Chny/2024) | ITAT Chennai (coordinate bench) | Consistent coordinate-bench view that Form 10B is directory |
Frequently Asked Questions
Per this ITAT Chennai ruling, no — not by itself. The Tribunal held that filing Form 10B is a procedural and directory requirement, and exemption cannot be denied solely for a belated filing once the substantive conditions of Section 11 are met.
The facts here involved a one-day delay (and the assessee’s own precedent involved a 19-day delay). The Tribunal’s reasoning is about the directory nature of the requirement, not a fixed time limit, but longer delays have not been tested in this order and carry more litigation risk.
In this case, the CIT(E) had rejected the condonation petition, yet the Tribunal still granted exemption on the merits of the appeal itself. A rejected 119(2)(b) petition is therefore not necessarily the end of the road — the exemption question can still be pursued through the normal appellate route.
No. It is a ruling of the ITAT Chennai ‘B’ Bench and is persuasive rather than binding outside its own jurisdiction, though it follows a consistent line of Gujarat High Court and jurisdictional Madras High Court authority.
No. The Tribunal specifically distinguished Wipro Ltd., which dealt with a mandatory declaration under Section 10B(8) for export-oriented units — an unrelated provision with no bearing on Form 10B compliance for Section 11 charitable-trust exemption.
Final Verdict
The ITAT Chennai Bench ruled in favour of M/s. M.N. Chickkanna Chettiar Trust and directed the AO to grant exemption under Section 11 for AY 2021-22. The Tribunal made it clear that Form 10B filed one day late cannot, by itself, justify denial of exemption when the trust fulfils the other substantive conditions under the Act.
In my view, this is a sound and practical decision. Denying an otherwise available tax exemption merely because Form 10B was filed one day late would place excessive importance on procedure while overlooking the trust’s substantive eligibility. The ruling appropriately distinguishes a curable compliance delay from a failure to satisfy the conditions for exemption. However, it should not be understood as a licence to ignore Form 10B deadlines or as a blanket waiver of the other requirements of Section 11.
Also Read
Corresponding Provisions Under the Income-tax Act, 2025
This case was decided under the Income-tax Act, 1961, as it concerns Assessment Year 2021-22. Under the Income-tax Act, 2025, the corresponding framework for taxation of registered non-profit organisations is primarily covered by Section 334, while the audit requirement is dealt with under Section 348. The corresponding audit report is now filed in Form No. 112, which replaces the earlier Form No. 10B and 10BB framework used under the 1961 Act.
Source Judgment: M/s. M.N. Chickkanna Chettiar Trust v. ACIT (Exemptions), ITA No. 4065/CHNY/2025, ITAT Chennai ‘B’ Bench, order dated 3 August 2026. Want to read the complete judgment? Download the full order copy here.
Legal Disclaimer: This article is for general informational purposes only and analyses a specific Tribunal order under the Income Tax Act, 1961, as it applied to Assessment Year 2021-22. It is not legal or tax advice, and it does not account for developments after the date of publication or for the specific facts of any reader’s case. Readers should verify the applicable position under the Income Tax Act 2025 for current assessment years and consult a qualified Chartered Accountant or tax professional before acting on this or any Section 11 exemption matter.
