ST. JOSEPHS TECHNICAL SCHOOL,MUMBAI vs. INCOME TAX OFFICER WARD 2(3), MUMBAI

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ITA 1548/MUM/2026Status: DisposedITAT Mumbai05 May 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that denying exemption without deciding the pending condonation petition was premature. The allowability of exemption is contingent upon the condonation of the delay in filing the audit report.

What were the facts?

The assessee, a charitable trust engaged in educational activities, filed its return claiming exemption under Section 11. The exemption was denied because the audit report in Form 10B was filed late. The assessee had filed a condonation petition for the delay.

What were the issues?

Whether denial of exemption under Section 11 is justified when a condonation petition for late filing of the audit report is pending. Whether the authorities should await the decision on the condonation petition before adjudicating the exemption claim.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A(1)(b),Section 139(1),Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH

For Appellant: Shri Anil Thakrar
For Respondent: Shri Saurabh Raskar (SR. DR.)
Hearing: 04.05.2026Pronounced: 05.05.2026

Per: SHRI JAGADISH, A.M.:

1.

This appeal filed by the assessee is directed against the order dated 09.01.2026 passed by the Addl./Jt. Commissioner of Income Tax (Appeals), hereinafter referred to as “Ld. CIT(A)”, for the assessment year 2019–20 arising out of the intimation issued under section 143(1) of the Income-tax Act, 1961 (in short “the Act”). 2. The facts, in brief, are that the assessee is a charitable trust registered under section 12A of the Act and engaged in educational activities. The assessee filed its return of income declaring Nil income

ITA No.1548/M/2026 St. Josephs Technical School after claiming exemption under section 11 and also filling Form No.10 for accumulation of income. The return was processed under section 143(1), wherein exemption was denied on the ground that audit report in Form No.10B was not filed within the prescribed time under section 139(1). 3. The assessee filed a rectification application which came to be rejected. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who upheld the action of the CPC on the ground that the audit report was filed belatedly and, therefore, the statutory condition prescribed under section 12A(1)(b) was not fulfilled. The Ld. CIT(A) also observed that condonation of delay falls within the domain of the competent authority under section 119(2)(b). 4. The Ld. Authorised Representative submitted that the assessee had filed a condonation petition before the Ld. CIT(E) under section 119(2)(b) for delay in filing Form No.10B and the same was pending consideration. It was contended that the denial of exemption under section 11 is directly dependent upon the outcome of such condonation petition and, therefore, the authorities below ought to have awaited the decision of the competent authority.

5.

The Ld. Departmental Representative relied upon the orders of the lower authorities. 6. We have heard the rival submissions and perused the material available on record. It is an admitted position that the assessee has filed a condonation petition before the competent authority under section 119(2)(b) seeking condonation of delay in filing audit report in Form No.10B. The allowability of exemption under section 11 is contingent upon the condonation of such delay. In our considered view, adjudication of the issue relating to denial of exemption without the decision of the competent authority on the condonation petition is

ITA No.1548/M/2026 St. Josephs Technical School premature. Once the statute itself provides a mechanism for condonation of delay, the outcome thereof has a direct bearing on the eligibility of exemption claimed by the assessee. 7. In view of the above facts, we deem it appropriate to restore the matter to the file of the Assessing Officer with a direction to decide the issue afresh after taking into consideration the decision of the Ld. CIT(E) on the condonation petition filed by the assessee under section 119(2)(b). 8. The Ld. CIT(E) is directed to dispose of the condonation petition expeditiously in accordance with law. 9. The assessee is also directed to extend full cooperation and furnish necessary details as may be called for by the Assessing Officer as well as the Ld. CIT(E). 10. In the result, the appeal is allowed for statistical purposes. 11. Order pronounced in the open court on 05/05/2026.

Sd/- Sd/-

(NARENDER KUMAR CHOUDHRY) (JAGADISH) Judicial Member Accountant Member

Mumbai, Dated: 05/05/2026 Ashwani Rao Sr. Private Secretary

ITA No.1548/M/2026 St. Josephs Technical School Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order

(Assistant Registrar) ITAT, Mumbai

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