NATIONAL WELFARE FOUNDATION,MUMBAI vs. INCOME TAX OFFICER, EXEM.WARD-2(1), MUMBAI

ITA 3507/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2016-176 pages
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What were the facts?

The assessee, National Welfare Foundation, a public charitable trust, filed an appeal against the order of the CIT(A) for Assessment Year 2016-17. The appeal challenged the disallowance of income accumulation amounting to Rs. 22,63,694/- under Section 11(2) of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed the claim because Form No. 10, required for such accumulation, was filed on 03.04.2018, which was beyond the prescribed time. The assessee contended that the delay was bona fide, caused by the illness of its accountant and trustees, and that the form was indeed furnished. The CIT(A) confirmed the AO's disallowance. The matter reached the Income Tax Appellate Tribunal (ITAT).

What did the Tribunal hold?

The Tribunal held that the present case is not one of complete non-furnishing of Form No. 10, but rather a case of belated furnishing. The Tribunal considered the explanation provided through the affidavit regarding the illness of the accountant and trustees, and the lack of familiarity with tax procedures, stating that the delay was neither wilful nor occasioned by gross negligence. The Tribunal found relevance in the Gujarat High Court's decision in CIT (E) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust, which held that inaccuracies or lack of complete declaration in the prescribed format would not be fatal if the purpose of accumulation can be satisfactorily established. The dismissal of the Revenue's SLP by the Supreme Court was also noted. Therefore, the Tribunal considered it appropriate to examine the assessee's claim on its substantive compliance rather than rejecting it solely on account of the delay. However, the satisfaction of Section 11(2) conditions, correctness of Form No. 10, and the purpose/utilization of accumulated funds require factual verification. Accordingly, the Tribunal set aside the impugned order and restored the matter to the AO with a direction to admit Form No. 10, verify its particulars and compliance with Section 11(2), and adjudicate the claim afresh. The assessee was directed to cooperate with the assessment proceedings and furnish requisite documents, and the AO was directed to afford a reasonable opportunity of being heard.

What were the issues?

1. Whether the Tribunal should disallow the claim for accumulation of income under Section 11(2) of the Income Tax Act, 1961, solely on account of the belated filing of Form No. 10, despite the delay being bona fide and the form being ultimately filed. Assessee's Contentions: - Form No. 10 was electronically filed on 03.04.2018, meaning it was not a case of non-furnishing but belated furnishing. - The delay of 533 days was due to bona fide reasons and circumstances beyond the assessee's control, including the severe illness of the accountant and other trustees, and lack of familiarity with tax procedures by the remaining trustee. Medical records were submitted. - The accumulation was for identified charitable purposes. - Relied on CIT (E) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust ([2018] 409 ITR 591 (Guj.)) where the Gujarat High Court held that inaccuracies in Form No. 10 are not fatal if the purpose of accumulation is otherwise established. - Noted that the Revenue's Special Leave Petition against this judgment was dismissed by the Supreme Court. - Prayed for the matter to be restored to the AO for verification of the form and claim. Revenue's Contentions: - Section 11(2) read with applicable Rules prescribes conditions for accumulation, including furnishing Form No. 10 within the stipulated period. - Since the assessee failed to furnish Form No. 10 within the prescribed time, the AO was justified in denying the benefit. - Subsequent filing of Form No. 10 does not automatically satisfy all statutory requirements; particulars, purpose, and compliance need AO's verification.

Which sections of the Income-tax Act were involved?

Section 11(2),Section 143(3),Section 250,Section 12A

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Income Tax Appellate Tribunal, MUMBAI

Before: SHRI ANIKESH BANERJEE & MS.RATNA DASGUPTA

PER: SHRI ANIKESH BANERJEE, (JM): The instant appeal of the assessee filed against the order of Commissioner Of Income Tax, Appeal Addl/JCIT(A)-2 Delhi [for brevity “Ld. CIT(A)”], order passed under Section 250 of the Income Tax Act, 1961 (for brevity ‘the Act’), for Assessment Year 2016-17, date of order 07.01.2026. The impugned order emanated from the order of the Ld. Income Tax Officer, Ward

ITA 3

The order continues below.

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