M/S PRESENTATION SOCIETY FOR HIGHER EDUCATION vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION)

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WP/17283/2024HC KarnatakaKAHC01035587202428 April 2025Bench: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court allowed the petition, setting aside the impugned order. The Court found that the respondent had adopted a hyper-technical approach in rejecting the condonation application. The Court noted that the delay was caused by a change in management, leading to the petitioner being unable to file returns within the prescribed period. This constituted bonafide reasons, unavoidable circumstances, and sufficient cause, amounting to genuine hardship as per the cited circulars. The Court emphasized that failure to appreciate these factors led to an erroneous conclusion. Consequently, the Court deemed it just and appropriate to condone the delay and directed the respondent to accept the petitioner's return of income and Form 10 for AY 2016-17, while reserving liberty to verify the claims. The ratio decidendi is that genuine hardship arising from administrative changes should be considered for condoning delays under Section 119(2)(b), and a hyper-technical approach is not warranted.

What were the facts?

The petitioner, M/s Presentation Society for Higher Education, an educational and charitable society, filed a writ petition challenging an order dated 26.12.2018 passed by the Commissioner of Income Tax (Exemption), Bangalore. This order rejected the petitioner's application filed under Section 119(2)(b) of the Income Tax Act, 1961, seeking condonation of a 73-day delay in filing its income tax returns and Form 10 for Assessment Year 2016-17. The petitioner contended that the delay was due to a change in management and bonafide reasons, constituting genuine hardship. The Revenue supported the impugned order.

What were the issues?

1. Whether the Commissioner of Income Tax (Exemption) erred in rejecting the petitioner's application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, for Assessment Year 2016-17, considering the reasons pleaded by the petitioner. Assessee's Contentions: The petitioner argued that the delay of 73 days in filing the income tax returns and Form 10 was attributable to a change in the society's management. The new management discovered the pending compliances only in November 2016. The delay was due to bonafide reasons, unavoidable circumstances, and sufficient cause, amounting to genuine hardship as contemplated by Circular No. 9/2015 dated 09.06.2015 and Circular No. 7/2018 dated 20.12.2018. Therefore, the rejection of the condonation application was erroneous. Revenue's Contentions: The Revenue supported the impugned order and contended that the petition lacked merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 119(2)(b)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:17591 WP No. 17283 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 17283 OF 2024 (T-IT)

BETWEEN:

M/S PRESENTATION SOCIETY FOR HIGHER EDUCATION NATURE OF BUSINESS ITS IS AN EDUCATIONAL AND CHARITABLE SOCIETY REPRESENTED BY ITS SECRETARY MARIA NINGA AMALIA VIEGAS AGED ABOUT 64 YEARS D/O MR LUCIO FRANCISCO DE JESUS MARIAD VIEGAS H NO 4/153/B (1) C/S ST THERESES HIGH SCHOOL MANGO HILL VASCO DA GAMA, GOA – 403802. …PETITIONER (BY SMT.JINITA CHTTERJI, ADVOCATE FOR SRI. S. PARTHASARATHI, ADVOCATE)

AND:

THE COMMISSIONER OF INCOME TAX (EXEMPTION) BANGALORE 6TH FLOOR UNITY BUILDING, ANNEXE P KALINGA ROAD BENGALURU – 560 027. …RESPONDENT (BY SRI. ARAVINDV. CHAVAN, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUITON OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED ORDER U/S 119 (2)(b) OF THE INCOME-TAX ACT, 1916 FOR AY.2016-17 BEARING NO. 165/CIT(E)/FORM-10/2018-19 DTD. 26.12.2018 (ANNX-A) PASSED BY THE RESPONDENT.

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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NC: 2025:KHC:17591 WP No. 17283 of 2024

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER In this petition, petitioner seeks quashing of the impugned order at Annexure – A dated 26.12.2018 passed by the respondent No.1, whereby the application filed by the petitioner under Section 119(2)(b) seeking condonation of delay of 73 days in filing the income tax returns and Form 10 in relation to the Assessment Year 2016-17 was rejected by the respondent.

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that in relation to the aforesaid Assessment Year 2016-17, the petitioner filed returns after the prescribed period along with the application seeking condonation of delay of 73 days in filing the return of income and Form 10 interalia contending that there was a change in management of the society and the new management only realized regarding the pendency of income tax compliances only in the month of November 2016 and owing to bonafide reasons, unavoidable circumstances and sufficient cause, the petitioner was

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NC: 2025:KHC:17591 WP No. 17283 of 2024

not in a position to file the returns within the prescribed period. It was contended that the delay in filing the I.T. returns was due to genuine hardship as contemplated in the Circular No.9/2015 dated 09.06.2015 and Circular No. 7/2018 dated 20.12.2018 and as such, the respondent committed an error in rejecting the application for condonation of delay filed by the petitioner under Section 119(2)(b) of the I.T.Act, which deserves to be set aside.

4.

Per contra, learned counsel for the respondents- Revenue would support the impugned order and submits that there is no merit in the petition and the same is liable to be dismissed.

5.

A perusal of the impugned order will indicate that the respondents have adopted hyper technical approach in refusing to condone the delay without appreciating that the inability and omission on the part of the petitioner to file I.T. returns within the prescribed period was to due change in the management of the society as a result of which, the petitioner could file the I.T. returns subsequent to expiry of the prescribed period. The respondents failed to appreciate that the petitioner could not file its I.T. returns within the prescribed period on account of bonafide reasons, unavoidable circumstances and sufficient cause, which clearly

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NC: 2025:KHC:17591 WP No. 17283 of 2024

constituted genuine hardship on the part of the petitioner/assessee as contemplated in the said Circular dated 09.06.2015 and 20.12.2018 and failure to appreciate this, has resulted in erroneous conclusion warranting interference by this Court in the present petition.

6.

Under these circumstances, adopting justice oriented approach and having regard to valid and sufficient ground pleaded by the petitioner in support of his claim for condonation of delay, I deem it just and appropriate to set aside the impugned order and condone the delay in filing the returns by the petitioner by allowing the application filed by the petitioner. 7. In the result, I pass the following: O R D E R (i) The petition is hereby allowed. (ii) The impugned order at Annexure – A dated 26.12.2018, is hereby set-aside; (iii) The application filed by the petitioner under Section 119(2)(b) for condonation of delay of 73

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NC: 2025:KHC:17591 WP No. 17283 of 2024

days in filing Income Tax Returns and Form 10 for the Assessment Year 2016-17, is hereby allowed; (iv) The respondents are directed to accept the return of income and Form 10 submitted by the petitioner for the aforesaid Assessment Year 2016-17; (v) It is needless to state that respondents are at liberty to verify the claim of the petitioner and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE

MDS List No.: 1 Sl No.: 56

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