SRI GURU RAGHAVENDRA SEVA SAMITHI TRUST vs. THE CENTRAL BOARD OF DIRECT TAXES (ITA CELL)

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WP/5587/2024HC KarnatakaKAHC01011512202428 April 2025Bench: S.R.KRISHNA KUMAR6 pages
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What did the High Court hold?

The High Court allowed the petition. It held that the petitioner, being a public charitable and religious trust, had submitted its income tax returns within the prescribed period. The Court found that the petitioner had demonstrated genuine hardship and circumstances beyond its control that prevented the timely submission of the audit report, attributing the omission to bonafide reasons and oversight. The Court opined that the impugned order, which adopted a hyper-technical approach, deserved to be set aside. Adopting a justice-oriented approach, the Court found it just, proper, and expedient to set aside the impugned order, allow the application for condonation of delay, and issue further directions. The Court directed the respondents to accept the income tax returns and the audit report in Form-10B as if filed within the due date and proceed accordingly.

What were the facts?

The petitioner, Sri Guru Raghavendra Seva Samithi Trust, a charitable and religious trust, filed its income tax returns for Assessment Year 2018-19 on September 20, 2018. The Income Tax Officer (ITO) processed the returns and issued an intimation under Section 143(1) of the Income Tax Act, denying the benefit of exemption under Section 11. The Trust then realized that the mandatory audit report in Form-10B was not submitted with the returns. On February 5, 2022, the Trust filed an application under Section 119(2)(b) of the Act seeking condonation of the delay in submitting the audit report, attributing the omission to bonafide reasons, unavoidable circumstances, and oversight. The Central Board of Direct Taxes (CBDT), the first respondent, rejected this application by an order dated December 18, 2023. Aggrieved, the Trust filed a writ petition before the High Court of Karnataka challenging the CBDT's order.

What were the issues?

1. Whether the order dated 18.12.2023 passed by the First Respondent (CBDT) under Section 119(2)(b) of the Income Tax Act, 1961, rejecting the petitioner's application for condonation of delay in filing the audit report in Form-10B for Assessment Year 2018-19, is liable to be quashed? Assessee's Contention: The petitioner argued that its failure to submit the audit report in Form-10B along with the income tax returns was due to bonafide reasons, unavoidable circumstances, and sufficient cause, specifically due to oversight. They sought condonation of the delay and directions for the exemption under Section 11 to be allowed. Revenue's Contention: The learned counsel for the respondents submitted that there is no merit in the petition and it is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 11,Section 143(1)

AI-generated summary — verify with the full judgment below

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NC: 2025:KHC:17591 WP No. 5587 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. 5587 OF 2024 (T-IT) BETWEEN:

SRI GURU RAGHAVENDRA SEVA SAMITHI TRUST, RAGHAVENDRA MUTT, RAVINDRANAGAR, HASSAN – 573 201. KARNATAKA TRUST REGISTRATION CERTIFICATE NO. S-275/12AA/CIT/MYS/08-09 PAN - AAHTS4619Q, REPRESENTED BY SECRETARY. …PETITIONER (BY SMT. JINITA CHATTERJI, ADV. FOR SRI. S. PARTHASARATHI, ADVOCATE)

AND:

1.

THE CENTRAL BOARD OF DIRECT TAXES (ITA CELL) MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, SECRETARIAT BUILDING, INDRAPRASTHA HO, NEW DELHI – 110 002.

REP. BY ADDITIONAL COMMISSIONER

2.

THE INCOME TAX OFFICER EXEMPTION WARD, REAC, MYSORE REAC, MYSORE – 570 008. KARNATAKA. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE)

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

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NC: 2025:KHC:17591 WP No. 5587 of 2024

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER U/S 119(2)(b) OF THE ACT DATED 18.12.2023 BY THE FIRST RESPONDENT FOR THE ASSESSMENT YEAR 2018-19 (ANENXURE- G) AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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

ORAL ORDER

In this petition, petitioner seeks the following reliefs: “a) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the order u/s.119(2)(b) of the Act dt.18.12.2023 by the First Respondent for the assessment year 2018-19 (ANNEXURE-`G',);

b) Issue a Writ of Certiorari or a direction in the nature of Writ of Certiorari quashing the communication dt.3.1.2024 in No.IBA/COM/F/17/2023-24/1059313208(1) by the First Respondent for the assessment year 2018-19 (ANNEXURE-`H',);

c) Issue a Writ of Prohibition or a direction in the nature of Writ of Prohibition restraining the First Respondent from the recovery of the impugned demand raised by the Second Respondent vide intimation dt.26.9.2019 (ANNEXURE-`C') and communication dt.3.1.2024 in File No.IBA/COM/F/17/2023- 24/1059313208(1) issue by the Second Respondent (Annexure-`H').

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NC: 2025:KHC:17591 WP No. 5587 of 2024

d. Issue a Writ of Mandamus or a direction in the nature of Writ of Mandamus directing the First Respondent to condone the delay in filing the audit report and direct the Second Respondent to allow the exemption under sec 11 of the Act.

e) Pass such other order, direction or writ as this Hon'ble Court deems fit, and

f) Direct the Respondents to award the costs of this Writ Petition.”

2.

A perusal of the material on record indicate that the petitioner is a Charitable and religious Trust and submitted its income tax returns for the assessment year 2018-19 on 20.09.2018. The said returns having been processed, the respondents issued an Intimation to the Petitioner under section 143(1) of the Income Tax Act hereinafter referred to as the ‘IT Act’ wherein benefit of exemption under Section 11 of the IT Act was not granted to the petitioner. Pursuant to the said denial of exemption under section 11 of the IT Act the Petitioner realized that the audit report in Form-10B applicable to the petitioner-Trust had not been submitted along with the income tax returns. Pursuant to the said realization, the petitioner submitted the said audit report in Form-10B along with an application on 05.02.2022 invoking

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NC: 2025:KHC:17591 WP No. 5587 of 2024

Section 119(2)(b) of the I.T. Act seeking condonation of delay in submitting the said audit report. It was contended that the inability and omission on the part of the petitioner to submit the said audit report along with the income tax returns was due to bonafide reasons, unavoidable circumstances and sufficient cause, since the same was not filed by oversight. The said application was considered by the respondent, who declined to condone the delay and accordingly, passed the impugned order dated 18.12.2023, rejecting the application for condonation of delay, aggrieved by which the petitioner is before this Court by way of the present petition.

3.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

4.

A perusal of the material on record will indicate that it is an undisputed fact that the petitioner is a Public Charitable and Religious Trust carrying on charitable and religious activities. It is also not in dispute that the petitioner had submitted its income tax returns within the prescribed period i.e., on 20.09.2018 as a Trust. Under these circumstances, in the light of the specific assertion on

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NC: 2025:KHC:17591 WP No. 5587 of 2024

the part of the petitioner that its inability and omission to submit the audit report in From-10B along with its income tax returns was due to bonafide reasons, unavoidable circumstances and sufficient cause, I am of the view that the petitioner had demonstrated and established genuine hardship and circumstances beyond its control, which prevented it from submitting the audit report along with the I.T. returns. Under these circumstances, the impugned order, which proceeds on a hyper technical approach deserves to be set aside and by adopting a justice oriented approach, in the light of the undisputed fact that the petitioner is Religious and Charitable Trust, it would be just, proper and expedient to set aside the impugned order and allow the application filed by the petitioner for condonation of delay and issue further directions in this regard.

5.

In the result, the following order is passed :

ORDER

(i) Petition is hereby allowed;

(ii) The impugned order at Annexure-G dated 18.12.2023, passed by respondent No.1, is hereby set aside;

(iii) The application filed by the petitioner under section 119(2)(b) dated 05.02.2022 is hereby

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NC: 2025:KHC:17591 WP No. 5587 of 2024

allowed and the delay on the part of the petitioner in submitting the audit report in Form- 10B is hereby condoned;

(iv) Respondent No.1 is directed to accept the income tax returns as well as Audit Report in Form-10B filed by the petitioner as if it was filed within the due date and proceed further, in accordance with law.

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

MDS List No.: 1 Sl No.: 0

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