PUSHPA BITAN FRIENDSHIP SOCIETY,KOLKATA vs. I.T.O., WARD - 1(4), EXEMPTION, KOLKATA

ITA 2607/KOL/2026Status: DisposedITAT Kolkata29 September 2026AY 2018-20196 pages
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What did the Tribunal hold?

The Tribunal condoned the delay of 1301 days in filing the appeal, following the principle of consistency and the co-ordinate bench's decision in the assessee's own case for AY 2020-21. The Tribunal noted that the delay was due to the treasurer's illness and demise, which caused administrative disruption. Regarding the substantive grounds, the Tribunal, by following the principle of consistency and the order of the co-ordinate bench in the assessee's own case for AY 2020-21, set aside the order of the CIT(A) and the intimation of the AO. The matter was remitted back to the Assessing Officer (AO) for considering the assessee's claim afresh. The reasoning was that the audit report (Form 10B) was available at the time of processing the return of income, and therefore, the claim of exemption under Section 11 of the Act should have been allowed. The assessee was to be given a reasonable opportunity to make further submissions. All grounds taken by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Pushpa Bitan Friendship Society, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order of the NFAC, Delhi (CIT(A)) for Assessment Year 2018-19. There was a delay of 1301 days in filing the appeal. The assessee explained this delay by stating that their treasurer, Mrs. Sudha Poddar, who handled all financial and tax matters, was suffering from serious illnesses and ultimately expired on April 7, 2024. Her continuous illness and subsequent demise caused administrative disruption, and no other person was aware of the CIT(A)'s order or equipped to handle the tax proceedings. The assessee relied on a co-ordinate bench's decision in their own case for AY 2020-21, where a similar delay was condoned.

What were the issues?

1. Whether the delay of 1301 days in filing the appeal can be condoned on the grounds of administrative disruption due to the treasurer's illness and demise? (Question of fact and law) 2. Whether the withdrawal of exemption under Section 11 of the Income Tax Act, 1961, for a procedural delay of two days in submitting the Audit Report in Form 10B, is justified, especially when the report was on record before the AO at the time of processing under Section 143(1)? (Question of law) 3. Whether the entire income subjected to application of Rs. 49,64,406/- should be treated as taxable income, and the claim of application of income of Rs. 49,28,234/- should be disallowed, even if the exemption under Section 11 is withdrawn? (Question of law) Assessee's contentions: - The delay in filing the appeal was due to the prolonged illness and death of their treasurer, which caused administrative disruption. They cited a co-ordinate bench's order in their own case for AY 2020-21 where a similar delay was condoned. - The withdrawal of exemption under Section 11 based on a two-day delay in filing Form 10B is a procedural technicality that should not override the substantive entitlement to exemption. They relied on the Hon'ble High Court of Calcutta's decision in CIT Exemptions Kolkata vs. M/s Indian Sugar Mills Association and Gujarat High Court's decision in CIT vs. Gujarat Oil And Allied Industries, holding that filing of the auditor's report is procedural and directory. - The application of income of Rs. 49,28,234/- is revenue in nature and for the purpose for which income was received, and thus should be allowed as deductible expenses even if Section 11 exemption is withdrawn. Revenue's contentions: - The revenue relied on the orders of the lower authorities and sought dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 11,Section 119(2)(b),Section 143(1),Section 250,Section 12AB,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI RAKESH MISHRA

For Appellant: Shri Giridhar Dhelia, AR
For Respondent: Shri Debasish Biswas, Sr. DR
Hearing: 24.09.2026Pronounced: 29.09.2026

PER YOGESH KUMAR U.S., JUDICIAL MEMBER:

The present Appeal is filed by the Assessee against the order of the NFAC, Delhi ‘Ld. CIT(A)’ for short) dated 17.10.2022, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2018-19. 2. There is a delay of 1301 days in filing the present Appeal. The Assessee filed an application along with affidavit for condonation of delay narrating the reasons which are reproduced as under: -

1.

Our society is a charitable institution registered u/s 12AB of the Income Tax Act, 1961. 2. Our day-to-day work of financial accounts and the Income Tax matter has been under the supervision of our treasurer, Mrs. Sudha Poddar since many years. Pushpa Bitan Fri

The order continues below.

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