Court Condones Delay in Filing Audit Report Citing Exceptional Circumstances, Directs Reconsideration by Tax Authorities
In a significant judgment, the Andhra Pradesh High Court has provided relief to Amnos Evangelical Fellowship by setting aside a previous order that denied their request for condoning a delay in filing the Form 10-B audit report. This delay, which spanned 44 days, occurred during the assessment year 2021-22 and was attributed to exceptional circumstances, including the Covid-19 pandemic and the advanced age of the society's treasurer.
The Division Bench, comprising Justices Battu Devanand and A. Hari Haranadha Sarma, heard the case where the petitioner, Amnos Evangelical Fellowship, a religious society registered under Section 12-A of the Income Tax Act, 1961, faced a denial of tax exemption due to the delayed submission of their audit report. The society operates a small church and relies solely on offerings received during prayer meetings for its income.
The petitioner's counsel, Vinodin Ruth Madapalli, argued that the delay was justified due to the treasurer's age and the operational challenges posed by the pandemic. Despite submitting an application to condone the delay, the Income Tax Department's Centralized Processing Centre in Bengaluru had initially rejected the request, leading to a tax liability imposition of Rs. 5,68,900.
Responding to the petition, the court noted that the petitioner had failed to submit necessary documents sought by the Income Tax Department, which were crucial for considering their request for delay condonation. However, considering the petitioner's involvement in charitable activities and the genuine difficulties faced, the court deemed it reasonable to allow the petitioner another opportunity to furnish the required documents.
The court directed the petitioner to submit the documents within three weeks, enabling the Income Tax Department to reconsider their request and pass appropriate orders. The judgment emphasized adherence to principles of natural justice and provided a framework for the reassessment of the petitioner's case by the tax authorities.
Bottom Line:
Income Tax - Condonation of delay in filing Form 10-B Audit Report - Delay caused due to exceptional circumstances arising from the Covid-19 pandemic and advanced age of treasurer - Court deemed it appropriate to grant petitioner a reasonable opportunity to submit required documents to the authority for reconsideration.
Statutory provision(s): Income Tax Act, 1961 Section 119(2)(b), Income Tax Act, 1961 Section 11
