Court Quashes Impugned Order, Citing Grave Hardship and No Gain from Delay
In a significant ruling, the Bombay High Court has quashed an order by the Commissioner of Exemption, Pune, and condoned the delay in filing Form 10 by Mahaveer Pratishthan, a charitable trust, for the Assessment Year 2022-23. The decision comes after the trust faced potential grave hardship due to a delay caused by unavoidable personal circumstances affecting their Chartered Accountant's team.
The trust had initially filed its Audit Report in Form 10B on September 19, 2022, but failed to file its Return of Income and Form 10, essential for claiming exemption under Section 11 of the Income Tax Act, 1961. The delay was attributed to a personal tragedy faced by the Chartered Accountant's assistant, leading to a missed deadline. This oversight was later explained through an affidavit by the Chartered Accountant.
After filing an application for condonation of delay under Section 119(2)(b) of the Income Tax Act, the trust was granted partial relief on July 24, 2023, with the delay in filing the Return of Income condoned. However, the application did not address the delay in filing Form 10, prompting further legal action by the trust.
The High Court, presided over by Justices B. P. Colabawalla and Firdosh P. Pooniwalla, noted the inconsistency in the officer's decision to condone the delay for the Return of Income but not for Form 10, despite both being interlinked. The court emphasized that the trust demonstrated no gain from the delay and had consistently complied with filing requirements in previous years.
In their judgment, the court highlighted that the trust would suffer undue hardship if the delay was not condoned, potentially leading to a substantial tax liability. The bench stated that the officer's earlier decision to condone the delay in filing the Return of Income indicated satisfaction with the trust's explanation for the delay.
The court's decision effectively quashes the impugned order dated April 18, 2024, and directs the respondents to process the trust's returns as if Form 10 was filed within the stipulated time. This ruling reinforces the importance of considering genuine hardships faced by taxpayers and the necessity of a balanced approach by tax authorities in similar circumstances.
Bottom Line:
Income Tax Act - Delay in filing Form 10 for claiming exemption under Section 11 - Delay caused due to unavoidable circumstances explained through affidavit of Chartered Accountant - Grave hardship to trust if delay not condoned - Delay condoned and impugned order quashed.
Statutory provision(s): Income Tax Act, 1961 Sections 11, 119(2)(b), 13(9)(ii).
Mahaveer Pratishthan v. Commissioner of Exemption, Pune, (Bombay)(DB) : Law Finder Doc id # 2887224
