Digambar Jain Ruchi Lifescape Samiti Bhopal vs. Commissioner Of Income Tax (Exemption)

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WP/2986/2020HC Madhya Pradesh22 November 2022Bench: HON'BLE SHRI JUSTICE SHEEL NAGU3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the petitioner's ignorance of the law cannot be considered a valid ground for condoning the delay in filing Form 10-B under Section 119(2)(b) of the Income Tax Act, 1961. The Court distinguished the present case from the Gujarat High Court's decision in Shree Maharaja Agrasen Seva Sansthan vs. Commissioner of Income Tax, where the delay was due to technical problems and lack of software support, which the Gujarat High Court found to be a genuine cause falling under "undue hardship." The Madhya Pradesh High Court opined that the expression "undue hardship" in Section 119(2)(b) cannot be stretched to include ignorance of law or a recently established institution's lack of familiarity with statutory requirements. Accepting such an argument would lead to an absurd expansion of the statutory provision not contemplated by the legislature. Therefore, the application for condonation of delay was rejected, and the petition was dismissed.

What were the facts?

The petitioner, Digambar Jain Ruchi Lifescape Samiti, filed a writ petition challenging the order dated 02/12/2019 passed by the Commissioner of Income Tax (Exemption), Bhopal. This order rejected the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961, seeking condonation of delay in filing Form 10-B for the assessment year 2017-2018. The petitioner is a charitable institution seeking exemption under Section 11 of the Act. The delay occurred because it was the petitioner's first occasion to file Form 10-B and they were unaware of the legal provisions.

What were the issues?

1. Whether the petitioner's ignorance of the law, specifically regarding the requirement to file Form 10-B and the associated deadlines, constitutes "undue hardship" within the meaning of Section 119(2)(b) of the Income Tax Act, 1961, warranting condonation of delay. Assessee's Contention: The petitioner argued that their ignorance of legal provisions, being a charitable institution filing Form 10-B for the first time, should be considered a valid reason for delay, akin to the technical issues faced by the assessee in the Gujarat High Court case of Shree Maharaja Agrasen Seva Sansthan vs. Commissioner of Income Tax. They contended that this ignorance led to an "undue hardship" in complying with the filing requirements. Revenue's Contention: The judgment does not explicitly record the revenue's arguments. However, the High Court's reasoning implies that the revenue likely argued against condoning the delay based on ignorance of law.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 11

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON'BLE SHRI JUSTICE VIRENDER SINGH ON THE 22nd OF NOVEMBER, 2022 WRIT PETITION No. 2986 of 2020 BETWEEN:- DIGAMBAR JAIN RUCHI LIFESCAPE SAMITI BHOPAL THR. ITS PRESIDENT ROHIT JAIN S/O SHRI RAKESH KUMAR JAIN AGED 37 OLIVE 416 RUCHI LIFESCAPES JATKHEOL BHOPAL (MADHYA PRADESH) .....PETITIONER (BY SHRI SHARAD KUMAR SANGHI - ADVOCATE ) AND 1. COMMISSIONER OF INCOME TAX (EXEMPTION) THR. BHOPAL OFFICE AT ROOM N. 201 2ND FLOOR METRO WALK BUILDING NEAR BITTAN MARKET E-5 ARERA COLONY BHOPAL (MADHYA PRADESH) 2. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) BHOPAL OFFICE AT ROOM NO. 201, 2ND FLOOR METRO WALK BUILDING NEAR BITTAN MARKET E-5 ARERA COLONY (MADHYA PRADESH) .....RESPONDENTS (BY SHRI SANJAY LAL - ADVOCATE ) This petition coming on for admission this day, JUSTICE SHEEL NAGU passed the following: ORDER This petition challenges the order dated 02/12/2019 passed by Commissioner of Income Tax (Exemption), Bhopal rejecting an application submitted by the petitioner under Section 119(2)(b) of the Income Tax Act 1 Signed by: VARSHA SINGH Signing time: 11/25/2022 3:33:36 PM Signature Not Verified seeking condonation of delay in filing Form 10-B for the assessment year 2017- 2018. Learned counsel for petitioner has placed reliance upon decision of Division Bench of the Gujrat High Court passed on 05/04/2022 in Special Civil Application No.13536 of 2021 (Shree Maharaja Agrasen Seva Sansthan vs. Commissioner of Income Tax) submitting that cause shown before the said Court by assessee in the application for condonation of delay in filing Form 10- B was "technical problem and no support from software", on the basis of which Division Bench of the Gujrat High Court decided to condone delay. It is submitted by learned counsel for the petitioner that in the present case, reason for delay was revealed by the assessee that since it was the first occasion for the petitioner-Charitable Institution to file Form 10-B claiming exemption u/S 11 of Income Tax Act, the Institution was unaware of the legal provisions. After hearing learned counsel for rival parties, this Court is of the considered view that no benefit can be derived by the petitioner/assessee flowing from the decision of Division Bench of Gujrat High Court where the reasons shown for delayed filing of Form 10-B was technical problem and absence of support from software which was found to be correct and genuine. The Gujrat High Court, therefore, treated the said genuine cause to fall within the ambit and sweep of the expression "undue hardship" found in Section 119(2)(b) of the Income Tax Act. This Court is afraid that the reason of ignorance of law shown by petitioner-Institution cannot be a good ground for condoning delay. The expression "undue hardship" found in section 119(2)(b) of the Income Tax Act cannot be stretched to include the cause of ignorance of law or the assessee- 2 Signed by: VARSHA SINGH Signing time: 11/25/2022 3:33:36 PM Signature Not Verified (SHEEL NAGU) JUDGE (VIRENDER SINGH) JUDGE Institution having recently started functioning. If this argument is accepted then the connotation and definition of expression "undue hardship" would stand expanded to absurd extent not contemplated by the statute. Accordingly, this petition stands dismissed. No cost. VS

3 Signed by: VARSHA SINGH Signing time: 11/25/2022 3:33:36 PM Signature Not Verified

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