Ajit K.Sengupta, J. - (1.) This reference under Section 256(1) of the Income-tax Act, 1961, relates to the assessment year 1984-85.
(2.) The assessee, admittedly, is a charitable trust registered with the Commissioner of Income-tax. For the assessment year 1984-85, the assessee filed its return on September 17, 1984, declaring a deficit of Rs. 1,61,452. The return so filed was not accompanied by audited accounts and audit report in Form No. 10B as required under Section 12A of the Act. The audit report dated November 12, 1984 was, however, filed by the assessee in the prescribed form on March 6, 1987, before the completion of the assessment. The Income-tax Officer, while completing the assessment, refused to allow the benefit of exemption under Section 11 of the Act to the assessee on the ground that audit report in Form No. 10B was not filed "along with the return". He computed the taxable income of the assessee at Rs. 11,24,430 as per assessment order dated March 31, 1987. Certain other objections raised by the Income-tax Officer are no more relevant as these were not upheld by the Commissioner of Income tax (Appeals).
(3.) Being aggrieved, the assessee challenged the above order before the Commissioner of Income tax (Appeals) and contended that, as the audit report was filed before the completion of the assessment, there was sufficient compliance with the requirement of Section 12A(b) of the Act. The assessee also contended that there was a defect in the return filed by the assessee and that, therefore, the Income-tax Officer should have allowed opportunity to the assessee to rectify the defect under Section 139(9) of the Act. The Commissioner of Income-tax (Appeals) did not find force in the contentions raised by the assessee. According to him, the assessee violated the mandatory provisions of Section 12A(b) of the Act and, therefore, was not entitled to exemption under Section 11 of the Act. He ordered accordingly.;