HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 561 / 2009 COMMISSIONER OF INCOME TAX, JAIPUR-II, JAIPUR ----Appellant Versus RAJASTHAN STATE AGRICULTURE MARKETING BOARD, PANT KRISHI BHAWAN, JAIPUR ----Respondent Connected With D.B. Income Tax Appeal No. 562 / 2009 COMMISSIONER OF INCOME TAX, JAIPUR-II ,JAIPUR ----Appellant Versus RAJASTHAN STATE AGRICULTURE MARKETING BOARD, PANT KRISHI BHAWAN, JAIPUR ----Respondent For Appellant(s) : Mr. R.B. Mathur For Respondent(s) : Mr. N.K. Jain HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 01/08/2017 1. By way of this appeals, department has challenged judgment and order passed by tribunal whereby tribunal has allowed appeals of assessee modifying order of A.O. as well as C.I.T. (Appeal). (2 of 4) [ ITA-561/2009] 2. This court while admitting appeals on 09.09.2009 has framed following question of law:- Whether in facts and circumstances of case, ITAT was justified in law in holding that compliance of provisions of Sec. 11(2) were made by assessee well in time despite fact that as per Rule 17 of I.T. Rules application in form No.10 was not filed within prescribed time i.e. by date of filing of ROI u/s 139(1) of Act? 3. We have heard counsel for parties. 4. issue is squarely covered by ratio of judgment rendered in case of Commissioner of Income Tax Vs. Industrial Extension Bureau reported in (2014) 367 ITR 270 (Guj), wherein High Court has observed as under:- It is true that in such option exercised on 22nd September 2009, assessee indicated smaller figu re of Rs. 57,17,600/= and it was only later that sa me was corrected to Rs. 1,05,67,047/=. However, Tribunal has taken note of facts on record namely that option in fact was exercised within time permit ted under statute. Itwas bona fide error to indica te wrong figure. intention to avail carry over of t he unspend income to next year was clear. We notice that in case of Trustees of Tulsidas Gopalji Charitable And Chaleshwar Temple Trust v. Commissioner of IncomeTax, reported in 207 ITR 368, Bombay High Court and in case of Commissioner of IncomeTax v. Ziarat Mir Syed Ali Hamdani, reported in [2001] 248 ITR 769, Jammu & Kashmir High Court have held that requirement of exercising option within time permitted under clause (2) of Explanati on to Section 11 (1) of Act is directory and not ma ndatory. Substantial compliance thereof O/TAXAP/1029 /2013ORDERwould therefore be sufficient. Even other wise, without going to extent of holding such time l imit as directory and not mandatory, in facts of present case, in our opinion, Tribunal committed n o error in granting benefit to assessee for e ntire amount since it was mere oversight or bona fid (3 of 4) [ ITA-561/2009] e error in not indicating correct and full amount for option under clause (2) of Explanation to Section 1 1 (1) of Act. . and judgment rendered in case of Director of Income-Tax (Exemption) vs. Divyajyot Foundation (reported in (2010) 321 ITR 53 (Guj) wherein it has been held as under:- In light of observations of High Court cited above, it can be fairly interpreted that purpose of filing of audit report in Form No. 10AA, DGIT is to ensure that amount of donation received for providing relief to earthquake victims is spent for such purpose. Once, it is found that such purpose has been fulfilled and assessee has filed Form No. 10AA before Assessing Officer, before completion of assessment, it should be treated as sufficient compliance with Sub-section (5C) of Section 80G of Act. Thus, to sum up, assessee has fulfilled condition laid down under provisions of Section 80G(5C) of Act and hence, there is no case for invoking Section 12(3) of Act and bringing to tax entire receipts or any amount, as entire donation received was spent within time allowed under Act. Assessing Officer's interpretation that entire receipt is taxable, is also without any rationale and logic. I find no infirmity in order of Commissioner of Income-tax (Appeals) who has followed hon'ble High Court judgment, which has clearly held that filing of audit report is directory and not mandatory in nature. Filing of audit report for Section 80G or in other statutory compliance assumes character. Respectfully following aforesaid decisions, we allow claim of assessee by dismissing appeal of Revenue. learned Departmental representative, however, relied on order of Assessing Officer. We have heard learned representatives of parties and perused record. facts and circumstances being same and respectfully following above Tribunal's order, we dismiss appeal of Revenue. (4 of 4) [ ITA-561/2009] Commissioner of Income-tax (Appeals) as well as Tribunal both found that though assessee has not submitted its accounts in Form No. 10AA before prescribed authority in given time, but that does not justify addition and disallowance of claim of assessee. Considering concurrent findings, we see no merit in these three appeals. and decision rendered by Commissioner of Income Tax Vs. Shahzedanand Charity Trust (reported in (1997) 228-ITR-292 (P&H) wherein Court has observed as under:- Central Board of Direct Taxes by issuing circular dated February 9, 1978, has treated provisions regarding furnishing of auditor's report along with return to be procedural and, therefore, directory in nature. By showing sufficient cause, auditor's report could be produced at any later stage either before Income-tax Officer or before appellate authority. In view of Board's circular dated February 9, 1978, requirement of filing auditor's report in Form No. 10B as provided in Section 12A(b) read with Rule 17B of Rules, ratio of law laid down by this court in CIT v. Jaideep Industries [1989] 180 ITR 81 would not apply to present case. 5. In view of above, issue is answered in favour of assessee and against department. 6. appeals stand dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Jyoti Item No.39-40 Commissioner of Income-tax, Jaipur-II, Jaipur v. Rajasthan State Agriculture Marketing Board