Non Filing of Audit Report Denial of Exemption Under Section 11(2) for NonFiling of Audit Report in Form No. 10B Along With Return of Income—Validity of

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The Tax Publishers Income Tax--Non Filing of Audit Report Denial of Exemption Under Section 11(2) for Non-Filing of Audit Report in Form No. 10B Along With Return of Income--Validity of CS. Preeti Satyani In this article, the learned author aims at analyzing an issue, which arose for consideration of the Ahmedabad Bench of the Tribunal in a latest case of DCIT v. Gujarat State Board of School Text Book 2024 TaxPub(DT) 3495 (Ahd-Trib), as to whether exemption under section 11(2) can be denied for non-filing of audit report in Form No. 10B along with return of income, even if the same was filed before due date of filing of return under section 139(1). 1. Prologue Section 11(2) of the Income Tax Act, 1961 (in short 'the Act') provides for exemption of income earned by the charitable and religious trusts and the institutions from their investments made in Government securities, bonds, debentures, and other securities specified by the Central Government from time to time. By the way of the said exemption, the tax liabilities of the trusts/institutions are being reduced and thereby letting them to apportion more funds toward the charitable activities/purposes. Further, the trusts and institutions can accumulate up to 15% of its income derived from the investments, without utilizing it for charitable purposes in the year in which it was generated. The said provision is well-known as the 'accumulation of income' provision. 2. Pre-requisites for claiming exemption under section 11(2) In order to claim exemption under section 11(2), the following conditions are to be satisfied:- SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Non Filing of Audit Report

Denial of Exemption Under Section 11(2) for Non-Filing of Audit Report in Form No. 10B Along With Return of Income--Validity of

CS. Preeti Satyani

In this article, the learned author aims at analyzing an issue, which arose for consideration of the Ahmedabad Bench of the Tribunal in a latest case of DCIT v. Gujarat State Board of School Text Book 2024 TaxPub(DT) 3495 (Ahd-Trib), as to whether exemption under section 11(2) can be denied for non-filing of audit report in Form No. 10B along with return of income, even if the same was filed before due date of filing of return under section 139(1).

1. Prologue

Section 11(2) of the Income Tax Act, 1961 (in short 'the Act') provides for exemption of income earned by the charitable and religious trusts and the institutions from their investments made in Government securities, bonds, debentures, and other securities specified by the Central Government from time to time. By the way of the said exemption, the tax liabilities of the trusts/institutions are being reduced and thereby letting them to apportion more funds toward the charitable activities/purposes. Further, the trusts and institutions can accumulate up to 15% of its income derived from the investments, without utilizing it for charitable purposes in the year in which it was generated. The said provision is well-known as the 'accumulation of income' provision.

2. Pre-requisites for claiming exemption under section 11(2)

In order to claim exemption under section 11(2), the following conditions are to be satisfied:-