KHANDELWAL VAISHYA SAMAJ CHARITABLE TRUST vs. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS)

The present writ petition has been preferred under Article 226 of the Constitution of India assailing the order dated 11th September 2019 passed by the Commissioner of Income Tax (Exemptions), dismissing the application dated 14th August 2019 filed by petitioner for condonation of delay in uploading/e-filing of Form 10B; seeking the following reliefs: a) The application filed by the Petitioner-trust on dated 14.08.2019 ("Annexure-P/8") before Respondent No. 1 for condoning the delay be allowed and the impugned order u/s 119(2)(b) passed by the Respondent No. 1 on dated 11.09.2019 ("Annexure-P/9") be quashed and set aside. b) That the Respondent No. 2 be directed to allow benefit of Section 11 & 12 of the Act to the Petitioner-trust.

Petitioner is a charitable trust and is an assessee under the provisions of Income Tax Act, 1961 (hereinafter referred to as the 'Act of 1961'). Petitioner is engaged in providing space for social

Petitioner filed return of income on 24th July 2017 for AY 2017-18, claiming exemption u/s 11 & 12 of the Act, declaring Nil income. Petitioner got its accounts audited in Form 10B on 27th June 2017 in compliance with Section 12A(1)(b) of the Act, which was filed physically but was not uploaded within the prescribed time as per Sub-Rule (2) of Rule 12 of Income Tax Rules, 1962. 4. The Central Processing Centre (‘CPC’) disallowed the exemption claim and made addition of Rs.38,15,188/- u/s 143(1), raising a demand of Rs. 12,47,230/-. Upon receiving this demand, trustees of petitioner-trust discovered that Form 10B was not uploaded. Petitioner requested the auditor to upload the same and accordingly, the auditor uploaded the same on 7th May 2019. 5. Learned counsel for petitioner submits that upon gaining knowledge of the fact that the demand had been raised by respondent-department, petitioner had swiftly approached the CA Firm engaged by petitioner to know why the necessary return was not uploaded/electronically filed. Whereby, it transpired that, the assistant of the CA Firm; one Miss Neha Khandelwal, who was assigned the task, had forwarded the finalized copy of the Audit Report to the office bearers of the petitioner-trust, but she suddenly met with an accident resulting in fracture of her leg and therefore, took leave from the office and did not report the pending work of uploading the audit report in Form No. 10B of the petitioner to any other colleague. Consequently, e-filing of the said audit report in Form 10B, got delayed.

Thereafter, Petitioner filed an application for condonation of delay in uploading/e-filing of Form 10B u/s 119(2)(b) on 14th August 2019 (Annexure-P/8) before Respondent No. 1. 7. The Commissioner of Income Tax (Exemptions) rejected the condonation application vide order dated 11th September 2019 (Annexure-P/9) without considering the averments made in the application in the right perspective.

Counsel further contended that respondent department has rejected the application for condonation of delay in a perfunctory manner without recording any reasons for rejection or even considering the bona fide reasons mentioned in the application for condoning the delay in uploading/e-filing of Form 10B. He further contended that for the lapse on part of the professional engaged (the CA Firm) due to unavoidable circumstances and their inaction or otherwise, assessee cannot be made to suffer. Therefore, prays that the writ petition may kindly be allowed.

Learned Counsel for respondent reiterated what was stated in the impugned order and submitted that petitioner admittedly had committed default in complying with the applicable Rules and it cannot claim any excuse or exception for non-compliance with the same. It is well settled law that ignorance of law is no excuse (ignorantia juris non excusat). He further contended that the impugned order does not suffer from any legal infirmity. Therefore, petitioner is not entitled for any relief and prays that the writ petition may kindly be dismissed.

At the outset, in view of the ground pleaded in the condonation application, we agree with Mr. Mahendra Gargieya, Adv., that there is no allegation of lack of bona fide in

It is also evident from the impugned order that respondent- department has in a perfunctory manner rejected the application filed by petitioner for condoning the delay, without considering the fact that the staff of the said CA Firm Miss Neha Khandelwal had met with an accident, which falls under the circumstances beyond control, resulting in the delay caused in uploading/e-filing of Form 10B.

Raghunathpur Nafar Academy and Ors.1 the Hon'ble Apex Court held as under:- "(i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice. (ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis."

There is no lack of bona fide imputable to petitioner. That apart, in the present case, the delay was caused due to the fact that staff of CA Firm met with an accident which is beyond control. Therefore, the delay was not deliberate and cannot be attributed to petitioner. Thus, we are of the considered opinion that the application for condonation of delay dated 14th August 2019 ought to have been allowed. Due to bona fide inaction on part of the professional engaged (CA Firm), petitioner cannot be made to suffer. 1 (2013) 12 SCC 649

Even otherwise, it is also pertinent to mention that an affidavit explaining the reasons for delay in uploading/e-filing of Form 10B was filed along with the writ petition as Annexure-P/5, which was not controverted by respondent. In M. Kalappa Sethi v. M. V. Laxmi Narain Rao2, it was held that an uncontroverted affidavit shall be taken as an affidavit on fact. Therefore, this Court is left with no option but to accept the averments of the affidavit (Annexure-P/5) to be true.

The fact that there was any mala fide intention in uploading/e-filing Form 10B belatedly is not alleged in impugned order. The fact that petitioner is a charitable trust, is also not denied. Looking at the charitable activities itself, in our view, delay condonation application should have been allowed. Courts have repeatedly held that such approach in the cases of present type should be equitious, balancing and judicious. Even though technically and strictly and liberally speaking, respondent might be justified in rejecting application but the assessee, a public charitable trust, with so many years of charitable activities, which otherwise satisfies the condition for availing such exemption should not be denied the same merely due on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned.

We find support for this view of ours in the judgment of Co-ordinate Bench of this Court at Principal Seat, Jodhpur in the 3 D.B. Civil Writ Petition No. 4212/2025, decided on 14th August 2025

We may also refer to and rely upon a decision of the Delhi High Court in the case of G.V. Infosutions (P) Ltd. v. Dy: CIT [2019] 102 taxmann.com 397/261 Taxman 482. We may quote the relevant observations thus:

The rejection of the petitioner's application under section 119(2)(b) is only on the ground that according to the Chief Commissioner's opinion the plea of omission by the auditor was not substantiated. This court has difficulty to understand what more plea or proof any assessee could have brought on record, to substantiate the inadvertence of its advisor. The net result of the impugned order is in effect that the petitioner's claim of inadvertent mistake is sought to be characterised as not bona fide. The court is of the opinion that an assessee has to take leave of its senses if it deliberately wishes to forego a substantial amount as the assessee is ascribed to have in the circumstances of this case. "Bona fide" is to be understood in the context of the circumstance of any case. Beyond a plea of the sort the petitioner raises (concededly belatedly), there can not necessarily be independent proof or material to establish that the auditor in fact acted without diligence. The petitioner did not urge any other grounds such as illness of someone etc., which could reasonably have been substantiated by independent material. In the circumstances of the case, the petitioner, in our opinion, was able to show bona fide reasons why the refund claim could not be made in time.

The statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the 4 2024 (4) TMI 939; [2025] 482 ITR 41 (Bom)

Having given our due consideration to all the relevant aspects of the matter, we are of the view that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, the respondent no. 2 might be justified in denying the exemption under section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 years who substantially satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned." 17. and (b), which reads as under: a) The application filed by the Petitioner-trust on dated 14.08.2019 ("Annexure-P/8") before Respondent No. 1 for condoning the delay be allowed and the impugned order u/s 119(2)(b) passed by the Respondent No. 1 on dated 11.09.2019 ("Annexure-P/9") be quashed and set aside. b) That the Respondent No. 2 be directed to allow benefit of Section 11 & 12 of the Act to the Petitioner- trust.

Petition disposed. (MANEESH SHARMA),J (K.R. SHRIRAM),CJ Seema/Varun/39 5 2024 (3) TMI 1327; [2025] 482 ITR 38 (Bom)