JTL EDUCATIONAL FOUNDATION vs. COMMISSIONER OF INCOME TAX (EXEMPTION) CHANDIGARH

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CWP/7180/2024HC Punjab & HaryanaPHHC01038538202411 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH2 pages
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What did the High Court hold?

The High Court allowed the writ petition, setting aside the order dated 07.03.2024. The Court found that the power to condone delay in filing the audit report is available with the department. It reasoned that the audit report, once prepared and on record, ought to be considered and not ignored. The Court concluded that the 30-day delay was not such that it could not be condoned. Therefore, the Tribunal directed the condonation of the delay and ordered that the audit report be taken on record. The impugned order was set aside, and the respondent was directed to pass a fresh order on merits. The ratio decidendi is that a reasonable delay in filing an audit report, when the report is otherwise on record and the power to condone exists, should be condoned to allow the assessee to pursue their claim for exemption, especially when the delay is not excessive and negligence is not definitively established to bar condonation.

What were the facts?

The petitioner, JTL Educational Foundation, filed a writ petition challenging an order dated 07.03.2024 passed by the respondent, the Commissioner of Income Tax (Exemption). The core issue revolved around the belated filing of an audit report in Form 10B. The audit report was prepared on 14.01.2022 but uploaded on 15.03.2022, exceeding the prescribed due date of 15.02.2022. The petitioner sought condonation of this 30-day delay. The Revenue contended that timely filing of Form 10B is a mandatory eligibility condition and that the petitioner was negligent in filing for assessment years 2019-2020, 2020-21, and 2021-22, thus no condonation should be granted. The High Court considered an application for placing on record the audit report and the reply filed by the Revenue.

What were the issues?

1. Whether the delay of 30 days in uploading the audit report in Form 10B, prepared on 14.01.2022 and uploaded on 15.03.2022 (due date 15.02.2022), can be condoned, particularly when the petitioner seeks to claim exemption under Section 11 of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the delay was only 30 days and should be condoned, as the power to condone delay is available with the department. They relied on the fact that the audit report was on record and ought to be considered. Revenue's Contention: The respondent Revenue argued that timely filing of Form 10B within the prescribed timeline is a basic eligibility condition for seeking exemption. They further submitted that the petitioner had been negligent in filing audit reports for multiple assessment years (2019-2020, 2020-21, and 2021-22), and therefore, there should be no condonation of the delay.

Which sections of the Income-tax Act were involved?

Section 11

AI-generated summary — verify with the full judgment below

CWP-7180-202 108+268

IN T JTL EDUCAT COMMISSION

CORAM: H

H Present: M M

f SANJEEV PR

CM-16901-CW

A is allowed, su

R Main case 1. Admitt submitt prescrib 2. The de condon record. 4 (O&M)

Page 1 of 2 THE HIGH COURT OF PUNJAB CHANDIGARH

TIONAL FOUNDATION Vs. NER OF INCOME TAX (EXEMP **** HON’BLE MR. JUSTICE SANJE HON’BLE MR. JUSTICE SANJA **** Ms. Sidhi Bansal, Advocate and Ms. Ridhi Bansal, Advocate for the petitioner. Mr. Varun Issar, Sr. Standing Co for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) WP-2024 Application for placing on record ubject to all just exceptions. Registry to place the same at app edly, the audit report was pre ted by the petitioner albeit aft bed date of filing of audit report. elay of 30 days cannot be said ned. The respondents have filed However, from the contents of B AND HARYANA AT H CM-16901-CWP-2024 in/and CWP-7180-2024 (O&M) Date of Decision: 11.11.2024 . . . . Petitioner TION), CHANDIGARH . . . . Respondent EEV PRAKASH SHARMA AY VASHISTH ounsel d reply on behalf of respondent propriate place. epared in Form 10B and was ter a period of 30 days of the . d to be such which cannot be d their reply which is taken on f the reply, the only contention

d ) 4 r t s e e n n MOHIT GOYAL 2024.11.12 12:16 I attest to the accuracy and integrity of this document

CWP-7180-202 raised b on 15.0 ought to 3. Counse the pre exempt timely and 20 delay. 4. We fin departm conside condon The ord fresh or 5. Writ Pe 6. All pen

November 11, Mohit goyal 1. Whethe 2. Whethe 4 (O&M)

Page 2 of 2 by the respondent is that the aud 03.2022 while the same was p o have been uploaded by 15.02.2 el for the Revenue submits that escribed timeline is a basic el tion. It is also submitted that the filing audit reports for assessm 21-22, and therefore there shou nd that the power to condone t ment. The audit report, once ered and the same ought not b ne the delay and direct that the au der dated 07.03.2024 is set asid rder on merits. etition is accordingly allowed. nding applications also stand disp

(SAN , 2024 r speaking/reasoned?

Y r reportable?

Y dit report was belatedly uploaded prepared on 14.01.2022, and it 2022. t the filing of Form 10B within ligibility condition for seeking petitioner had been negligent in ment years 2019-2020, 2020-21, uld not be any condonation of the delay is available with the it is on record, ought to be be ignored. In view thereto, we udit report to be taken on record. de. The respondent shall pass a posed of. NJEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

d t n g n , f e e e . a MOHIT GOYAL 2024.11.12 12:16 I attest to the accuracy and integrity of this document

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