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2. Heard the learned Representatives of both sides at length and case- records perused.

3. The exact controversy involved in present case is : Whether or not the assessee was entitled to exemption u/s 11/12 as claimed in the return of income when the audit-report (Form No. 10B) was not filed before filing of return but filed during first-appeal?

4. The precise facts are such that assessee is a charitable society engaged in imparting education. It is registered u/s 12A of the Income-tax Act, 1961 by Commissioner of Income-tax, Indore vide Regn. No. 2/2001- 2002 order dated 27.04.2001 from 01.04.2000, copy of registration-order is filed at Page 11 of Paper-Book. Accordingly, it is entitled for exemption u/s 11/12. For AY 2019-20 under consideration, the assessee filed original return u/s 139(1) on 12.09.2019 declaring total income at Rs. Nil after claiming exemption u/s 10(23C)(vi). The auditors of assessee also filed audit-report dated 05.06.2019 in Form No. 10BB on the very same day of 12.09.2019, copy of audit-report and e-filing acknowledgement are filed at Page 42-45 of Paper-Book. Based on such return and audit-report, the AO passed original intimation dated 04.06.2020 denying the exemption claimed by assessee and determining total income at Rs. 1,70,06,536/-. On verification of such intimation, the assessee realized mistake of claiming Adarsh Shishu Vihar Assessment year 2019-20 exemption u/s 10(23C)(vi) instead of correct exemption u/s 11/12 and therefore the assessee filed revised return u/s 139(5) on 20.11.2020 claiming exemption u/s 11/12 and declaring total income at Rs. Nil. The revised return was taken as a valid return and processed by AO vide revised intimation u/s 142(1) dated 05.02.2021. However, in such revised intimation, the AO denied assessee's exemption u/s 11/12 for non-filing of audit report in Form No. 10B which is required for exemption u/s 11/12. After receiving revised-intimation, the assessee came to know of this mistake. Immediately, the assessee filed audit-report in Form No. 10B on 18.03.2021, copy of audit-report and e-filing acknowledgement are filed at Page 101-103 of Paper-Book, and also carried matter in first-appeal before CIT(A) with a prayer to grant exemption u/s 11/12. However, the assessee did not get any success in first-appeal. Now, the assessee has come in next appeal before us.

Adarsh Shishu Vihar Assessment year 2019-20

6. Then, Ld. AR submitted that the assessee is engaged in charitable activities and the registration granted to it by tax authorities u/s 12A was in force. The assessee filed original return of income on 12.09.2019 and prior to filing of return, the accounts were duly audited on 05.06.2019, a copy of the audited accounts in the shape of audited Balance-Sheet, Income & Exp. A/c and Schedules, duly signed and sealed by M/s S.B. Nagori & Co., Chartered Accountants, is placed at Page No. 104-106 of Paper-Book. However, there occurred a mistake of claiming exemption u/s 10(23C)(vi) on the strength of report in Form No. 10BB instead of claiming correct exemption u/s 11/12, which led the AO to deny exemption. Therefore, the assessee subsequently filed revised-return which was a valid return u/s 139(5) and accepted by AO, there is no dispute about it. However, the assessee missed to file report in Form No. 10B, which again led to denial of exemption u/s 11/12. Ld. AR submitted that the entire mis-happening was due to inadvertence and without any bad intention but the assessee has already filed correct report in Form No. 10B during first-appeal. Ld. AR submitted that the mistake committed by assessee was a technical defect only and except such technical defect, there is no other reason to deny the benefit of section 11/12 to assessee. Ld. AR submitted that the defect is due to an inadvertent human error and the assessee should not be denied the legitimate exemption when the assessee is genuinely doing charitable activities for the welfare of public and satisfying all conditions prescribed in income-tax law for being entitled to exemption. Ld. AR submitted that if the Adarsh Shishu Vihar Assessment year 2019-20 audit report in Form No. 10B filed by assessee belatedly on 18.03.2021 is accepted, the assessee would be entitled to the benefit of exemption. Ld. AR submitted that it is now well-settled by numerous decisions of High Courts and ITAT Benches that the requirement of filing audit-report alongwith return is one of the conditions for claiming benefit of exemption u/s 11/12 but it is a procedural-cum-directory requirement and even if the report is subsequently filed to AO, the exemption u/s 11/12 can't be denied. Ld. AR relied upon a few decisions holding such proposition: