M/S SREE DHARMASASTA AYYAPPA RELIGIOUS TRUST vs. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (E)

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WP/19556/2024HC KarnatakaKAHC01041532202424 September 2024Author: S.R.KRISHNA KUMAR5 pages
AI SummaryAllowed

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 demonstrated genuine hardship and circumstances beyond its control that prevented the timely submission of the audit report. The Court found that the impugned order, which rejected the condonation application, adopted a hyper-technical approach. By adopting a justice-oriented approach, considering the undisputed charitable and religious nature of the trust, the Court found it just, proper, and expedient to set aside the impugned order. The Court condoned the delay in submitting the audit report in Form-10B and directed the respondent to accept the income tax returns and the audit report as if filed within the due date and proceed accordingly. The Court expressly did not detail findings on the Section 143(1) and 154 intimations, as the primary relief was granted by condoning the delay.

What were the facts?

The petitioner, M/s Sree Dharmasasta Ayyappa Religious Trust, a charitable and religious trust, filed its income tax returns for Assessment Year 2018-19 on March 26, 2019. The Income Tax Department intimated the petitioner that the mandatory audit report in Form-10B was not submitted with the returns. The petitioner subsequently submitted the audit report along with an application dated June 20, 2023, seeking condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner cited bonafide reasons, unavoidable circumstances, and sufficient cause, stating the report was not made available by its auditor/accountant. The Principal Chief Commissioner of Income Tax rejected this application, passing an order dated October 12, 2023. Aggrieved, the petitioner filed a writ petition before the High Court of Karnataka.

What were the issues?

1. Whether the impugned order dated 12.10.2023, passed by the Principal Chief Commissioner of Income Tax 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 for AY 2018-19, is sustainable in law? Assessee's Contention: The petitioner argued that the delay in submitting the audit report in Form-10B was due to bonafide reasons, unavoidable circumstances, and sufficient cause, as the report was not made available by its auditor/accountant. They sought condonation of delay and quashing of the impugned order. The petitioner also sought to quash the intimation passed under Section 143(1) and the rectification order under Section 154. Revenue's Contention: The respondents (Principal Chief Commissioner and Assistant Director of Income Tax) submitted that there was no merit in the petition and it was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.19556 OF 2024 (T-IT) BETWEEN:

M/S SREE DHARMASASTA AYYAPPA RELIGIOUS TRUST SY.NO.46/2, BANGALORE-MYSORE MAIN ROAD, KUMBALGUDU VILLAGE, KENGERI, BANGALORE – 560 074. REP. BY N. KRISHNASA, AGED ABOUT 80 YEARS, SON OF MUNESHWARSA. …PETITIONER (BY SRI. RAVI SHANKAR S.V., ADVOCATE)

AND:

1.

THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (E) ROOM NO.2503, 25TH FLOOR, E2 BLOCK, CIVIC CENTRE, MINTO ROAD, NEW DELHI – 110 002.

2.

THE ASSISTANT DIRECTOR OF INCOME TAX, CPC, BANGALORE. REPRESENTED BY THE INCOME TAX OFFICER, EXEMPTIONS WARD – 3, UNITY BUILDING, ANNEXE, MISSION ROAD, BANGALORE – 560 027. …RESPONDENTS (BY SRI.ARAVIND V. CHAVAN, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER UNDER SECTION 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DATED 12/10/2023 PASSED BY THE R1 IN ITBA/COM/F/17/2023-24/1056998435(1) FOR THE ASSESSMENT YEAR 2018-19 (ANNEXURE-A) AND ETC.,

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

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

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

ORAL ORDER

In this petition, petitioner seeks the following reliefs:

“i) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order under section 119(2)(b) of the Income Tax Act, 1961 (for short ‘the Act’) dated 12/10/2023 passed by the Respondent No.1 in ITBA/COM/F/17/2023-24/1056998435(1) for the assessment year 2018-19 (Annexure-A).

ii) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the intimation passed U/s 143(1) dated 30/09/2019, passed by the Respondent No.2 bearing CPC/1819/A7/1908982493 for the assessment year 2018- 19 (Annexure-C).

iii) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the intimation passed U/s 154 dated 02/01/2020, passed by the Respondent No.2 bearing CPC/1819/U7/1969926996 for the assessment year 2018- 19 (Annexure-G).

iv) Issue a writ of mandamus or a direction in the nature of writ of mandamus directing to the respondents to condone the delay in filing the audit report dt. 03/12/2019 for the assessment year 2018-19 (Annexure-E).

v) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”

2.

A perusal of the material on record indicate that the petitioner is a Trust involved in religious and charitable activities and submitted his income tax returns for the assessment year 2018-19 on 26.03.2019. The said returns having been processed, the respondents intimated the petitioner that the audit report in Form-10B applicable to the petitioner-Trust had not been submitted along with the income tax returns and called upon the petitioner to submit the same. In response thereto, the petitioner submitted the said audit report in Form-10B along with an application dated 20.06.2023 invoking 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 made available to the petitioner-Trust by its auditor/accountant. The said application having was considered by the respondent, who declined to condone the delay and accordingly, passed the impugned order dated 12.10.2023, 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 26.03.2019 as a Trust. Under these circumstances, in the light of the specific assertion on 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-A dated 12.10.2023 passed by respondent No.1 is hereby set aside;

(iii) The application filed by the petitioner under section 119 (2)(b) dated 20.06.2023 is hereby allowed and the delay on the part of the petitioner in submitting the audit report in Form-10B is hereby condoned;

(iv) Respondent no.2 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

SV List No.: 1 Sl No.: 11

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