JAN SEVA MANDAL ,MUMBAI vs. INCOME TAX OFFICER EXEMPTION WARD -1(4), MUMBAI

2. The The The learned learned learned CIT(Appeals) CIT(Appeals) CIT(Appeals) and and and the the the learned learned learned CPC CPC CPC - ITD failed failed failed to to to appreciate appreciate appreciate that that that the the the time time time limit limit limit prescribed prescribed prescribed for for for filing filing the the Audit Audit Report Report is is only only declaratory dec laratory and and not not mandatory. mandatory. mandatory. The The The lower lower lower authorities authorities authorities failed failed failed to to to appreciate appreciate appreciate that delay in filing the Audit Report is only a procedural that delay in filing the Audit Report is only a procedural that delay in filing the Audit Report is only a procedural lapse and the same cannot be fatal leading to denial of lapse and the same cannot be fatal leading to denial of lapse and the same cannot be fatal leading to denial of exemption/benefits exemption/benefits exemption/benefits under under under Section Section Section 11 11 11 of of of the the the Act Act Act particularly particularly when when the the said s aid Audit Audit Report Report was was available available on on on record record record when when when the the the Return Return Return of of of Income Income Income was was was processed processed processed under Section 143(1) of the Act. under Section 143(1) of the Act.

3. The The The learned learned learned CIT CIT CIT (Appeals) (Appeals) (Appeals) failed failed failed to to to appreciate appreciate appreciate the the the explanations/submissions explanations/submissions explanations/submissions furnished furnished furnished by by by the the the Appellant Appellant Appellant and and the the legal legal position position emerging emerging from from the th e decisions decisions of of various various High High Courts/Income Courts/Income-tax tax Appellate Appellate Tribunals Tribunals dealing dealing dealing with with with amended amended amended provisions provisions provisions of of of Section Section Section 12A(b) 12A(b) 12A(b) of of of the Act. 4. It It It is is is submitted submitted submitted that that that the the the denial denial denial of of of exemption exemption exemption under under under Section 11 of the Act, as discussed above, has led to Section 11 of the Act, as discussed above, has led to Section 11 of the Act, as discussed above, has led to denial of deductions of denial of deductions of the following amounts resulting the following amounts resulting into huge demand of Rs. 18,25,840/ into huge demand of Rs. 18,25,840/- after adjusting the after adjusting the TDS refund of Rs. 1,05,613/ TDS refund of Rs. 1,05,613/- against the Appellant: against the Appellant:

1.

2. A A sum sum of of Rs.33,00,000/ Rs.33,00,000/- being being amount amount accumulated accumulated or set apart for specific purposes under or set apart for specific purposes under section 11 (2) section 11 (2) read with section 11(5) of the Act. read with section 11(5) of the Act.

3. A A sum sum of of Rs.43,938/- Rs.43,938/ under under section section 11 11 read read with with Section 11(6) of the Act being the amount of capital Section 11(6) of the Act being the amount of capital Section 11(6) of the Act being the amount of capital expenditure incurred to be allowed as application of expenditure incurred to be allowed as application of expenditure incurred to be allowed as application of income. income. 6. It is submitted that the disallowances refe It is submitted that the disallowances referred to above rred to above are are are unjustified unjustified unjustified and and and bad bad bad in in in law law law as as as the the the denial denial denial of of of exemption under Section 11 of the Act itself is ill-founded and exemption under Section 11 of the Act itself is ill exemption under Section 11 of the Act itself is ill unwarranted. unwarranted. It is submitted that on the facts and in the circumstances of the case It is submitted that on the facts and in the circumstances of the case It is submitted that on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in and in law, the learned CIT(Appeals) erred in confirming the adjustments resorted to by the learned CPC adjustments resorted to by the learned CPC - ITD while processing ITD while processing the Return of Income under Section 143(1) of the Act. the Return of Income under Section 143(1) of the Act. 7. It is submitted that the basic issue leading to denial of exemption It is submitted that the basic issue leading to denial of exemption It is submitted that the basic issue leading to denial of exemption under Section 11 of the Act viz. delay in filing the under Section 11 of the Act viz. delay in filing the Audit Report in Form 10-B, itself is a highly debatable question of law and the B, itself is a highly debatable question of law and the B, itself is a highly debatable question of law and the same same same cannot cannot cannot be be be the the the ground ground ground for for for adjustment/additions/disallowances adjustment/additions/disallowances adjustment/additions/disallowances under under under Section Section Section 143(l)(a)/143(l) of the Act. 143(l)(a)/143(l) of the Act. It is submitted that the learned CPC It is submitted that the learned CPC - ITD has resorted to the ITD has resorted to the adjustments without complying with the provisions of Section stments without complying with the provisions of Section stments without complying with the provisions of Section 143(1) of the Act. 143(1) of the Act. 2. Briefly stated, facts of the case are Briefly stated, facts of the case are the assessee is a public the assessee is a public charitable trust, registered under the provisions of the Act, and filed charitable trust, registered under the provisions of the Act, and filed charitable trust, registered under the provisions of the Act, and filed its return of income for the assessment year under consideration on its return of income for the assessment year under consideration on its return of income for the assessment year under consideration on 29.11.2023 declaring total income at ₹86,859. The return was 29.11.2023 declaring total income at 86,859. The return was processed by the Assessing Off processed by the Assessing Officer at Central Processing centre icer at Central Processing centre (CPC) under Section 143(1) of the Act and the total income was (CPC) under Section 143(1) of the Act and the total income was (CPC) under Section 143(1) of the Act and the total income was determined at ₹51,92,176. The CPC, while passing the said order, 51,92,176. The CPC, while passing the said order, 51,92,176. The CPC, while passing the said order, denied exemption under Section 11 of the Act, citing delay of 29 denied exemption under Section 11 of the Act, citing delay of 29 denied exemption under Section 11 of the Act, citing delay of 29 days in e-filing of the audit filing of the audit report in Form 10B. It is not in dispute report in Form 10B. It is not in dispute that although the due date for furnishing the return stood extended that although the due date for furnishing the return stood extended that although the due date for furnishing the return stood extended to 30.11.2023, the requirement under the law was that Form 10B to 30.11.2023, the requirement under the law was that Form 10B to 30.11.2023, the requirement under the law was that Form 10B be filed one month prior to such extended due date. The audit be filed one month prior to such extended due date. The audit be filed one month prior to such extended due date. The audit report was filed on 2 report was filed on 29.11.2023 and thus held to be beyond the 9.11.2023 and thus held to be beyond the prescribed timeline. As a result, exemption under Sections 11(1)(a), prescribed timeline. As a result, exemption under Sections 11(1)(a), prescribed timeline. As a result, exemption under Sections 11(1)(a), 11(2), and 11(6) was disallowed and consequential adjustments 11(2), and 11(6) was disallowed and consequential adjustments 11(2), and 11(6) was disallowed and consequential adjustments were made under Section 143(1)(a) of the Act. were made under Section 143(1)(a) of the Act.

3. In appeal, the Ld. CIT(A) affirmed In appeal, the Ld. CIT(A) affirmed the adjustments made by the adjustments made by the CPC, holding that the audit report was not filed within the the CPC, holding that the audit report was not filed within the the CPC, holding that the audit report was not filed within the prescribed time as per Section 12A(1)(b) read with Rule 17B. The prescribed time as per Section 12A(1)(b) read with Rule 17B. The prescribed time as per Section 12A(1)(b) read with Rule 17B. The appellate authority, relying on CBDT Circular No. 16/2024 dated appellate authority, relying on CBDT Circular No. 16/2024 dated appellate authority, relying on CBDT Circular No. 16/2024 dated 18.11.2024, observed that the Assessin 18.11.2024, observed that the Assessing Officer as well as the g Officer as well as the CIT(A) lacked jurisdiction to condone the delay in filing Form 10B CIT(A) lacked jurisdiction to condone the delay in filing Form 10B CIT(A) lacked jurisdiction to condone the delay in filing Form 10B and was advised to approach the jurisdictional Principal and was advised to approach the jurisdictional Principal and was advised to approach the jurisdictional Principal Commissioner or Chief Commissioner for condonation of delay Commissioner or Chief Commissioner for condonation of delay Commissioner or Chief Commissioner for condonation of delay under Section 119(2)(b) of the Act. under Section 119(2)(b) of the Act. The relevant finding of the Ld. nt finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:

“Decision: 6.1 The statement of facts, grounds of appeal

, and the order The statement of facts, grounds of appeal

, and the order The statement of facts, grounds of appeal, and the order appealed against have been thoroughly examined. The central appealed against have been thoroughly examined. The central appealed against have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised issue for adjudication among all the grounds of appeal raised issue for adjudication among all the grounds of appeal raised pertains to the sole issue of pertains to the sole issue of denying the benefit of Section 11 & denying the benefit of Section 11 & Section 12 of the Act while processing the return of Income under of the Act while processing the return of Income under of the Act while processing the return of Income under section 143(1) of the Act as Form 10B was not filed within the section 143(1) of the Act as Form 10B was not filed within the section 143(1) of the Act as Form 10B was not filed within the prescribed time limit. Therefore, all grounds of appeal are being prescribed time limit. Therefore, all grounds of appeal are being prescribed time limit. Therefore, all grounds of appeal are being clubbed and adjudicated together. clubbed and adjudicated together. 6.2 It is noted that while processing It is noted that while processing the return of Income, the AO the return of Income, the AO denied the exemption claimed u/s 11 and 12. The said exemption claimed u/s 11 and 12. The said adjustment u/s 143(1)(a) was done after providing the adjustment u/s 143(1)(a) was done after providing the adjustment u/s 143(1)(a) was done after providing the opportunity to the appellant. The reason for adjustment u/s opportunity to the appellant. The reason for adjustment u/s opportunity to the appellant. The reason for adjustment u/s 143(1)(a) are as follows: 143(1)(a) are as follows: 6.3 The foreign contribution ente The foreign contribution entered at SI. No. B(iil) of Schedule No. B(iil) of Schedule

VC by the trust or institution claiming exemption u/s 11 or VC by the trust or institution claiming exemption u/s 11 or VC by the trust or institution claiming exemption u/s 11 or 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in Form 10B at least one month prior to the due date for furnishing Form 10B at least one month prior to the due date for furnishing Form 10B at least one month prior to the due date for furnishing return u/s 139(1). However, th return u/s 139(1). However, the assessee has not E e assessee has not E-filed the Audit Report in Form 10B within specified due date. Hence, Audit Report in Form 10B within specified due date. Hence, Audit Report in Form 10B within specified due date. Hence, Income chargeable to tax will be recomputed as per the provision Income chargeable to tax will be recomputed as per the provision Income chargeable to tax will be recomputed as per the provision of Section 13(10) or twenty second proviso to Section 10(23C) of of Section 13(10) or twenty second proviso to Section 10(23C) of of Section 13(10) or twenty second proviso to Section 10(23C) of the Income Tax Act as applicable. the Income Tax Act as applicable. 6.4 The appellant submitted that the CPC ITD made significant The appellant submitted that the CPC ITD made significant The appellant submitted that the CPC ITD made significant adjustments adjustments adjustments under under under Section Section Section 143(1), 143(1), 143(1), disallowing disallowing disallowing amounts amounts amounts accumulated under Section 11 (1 )(a), Section 11(2), and capital accumulated under Section 11 (1 )(a), Section 11(2), and capital accumulated under Section 11 (1 )(a), Section 11(2), and capital expenditure claimed as income application, due to the late filing expenditure claimed as income application, due to the late filing expenditure claimed as income application, due to the late filing of Form 10B, the audit report, which was filed on 29.11.2023. , the audit report, which was filed on 29.11.2023. , the audit report, which was filed on 29.11.2023. The Appellant argued that this delay was due to genuine The Appellant argued that this delay was due to genuine The Appellant argued that this delay was due to genuine circumstances, including the complexity of accounting and the circumstances, including the complexity of accounting and the circumstances, including the complexity of accounting and the late release of the new Form 10B utility. Additionally, the late release of the new Form 10B utility. Additionally, the late release of the new Form 10B utility. Additionally, the Appellant highlighted that Appellant highlighted that Form 10B was available before the Form 10B was available before the return processing and that filing delays are procedural and return processing and that filing delays are procedural and return processing and that filing delays are procedural and should not affect exemption claims. The Appellant asserted that should not affect exemption claims. The Appellant asserted that should not affect exemption claims. The Appellant asserted that denial of exemptions under Section 11 based on these procedural denial of exemptions under Section 11 based on these procedural denial of exemptions under Section 11 based on these procedural lapses violates natural justice, a lapses violates natural justice, and the CPC ITD’s actions were nd the CPC ITD’s actions were unlawful. The Appellant requested that the disallowances be unlawful. The Appellant requested that the disallowances be unlawful. The Appellant requested that the disallowances be reversed, reversed, reversed, and and and exemptions exemptions exemptions granted, granted, granted, citing citing citing relevant relevant relevant legal legal legal precedents that allow for substantial compliance with procedural precedents that allow for substantial compliance with procedural precedents that allow for substantial compliance with procedural requirements. requirements. 6.4 The contention of the appel 6.4 The contention of the appellant has been considered. In this lant has been considered. In this context, it's important to note that according to Section 12A(1)(b) context, it's important to note that according to Section 12A(1)(b) context, it's important to note that according to Section 12A(1)(b) and Rule 17B, Trusts are obligated to file Form 10B, which is and Rule 17B, Trusts are obligated to file Form 10B, which is and Rule 17B, Trusts are obligated to file Form 10B, which is mandatory. Form 10B can only be accessed and mandatory. Form 10B can only be accessed and mandatory. Form 10B can only be accessed and submitted online and must be filed no later tha online and must be filed no later than the specified date n the specified date mentioned in Section 44AB of the Act, which is one month before mentioned in Section 44AB of the Act, which is one month before mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section the due date for submitting the Income Tax Return under Section the due date for submitting the Income Tax Return under Section 139(1) of the Act. 139(1) of the Act. 6.5 In the present case, the appellant submitted Form 10B on In the present case, the appellant submitted Form 10B on In the present case, the appellant submitted Form 10B on November 29, 2023, while th November 29, 2023, while the deadline for filing Form 10B was e deadline for filing Form 10B was one month prior to the due date for submitting the Return. The one month prior to the due date for submitting the Return. The one month prior to the due date for submitting the Return. The due date for submitting the return in case of the appellant was due date for submitting the return in case of the appellant was due date for submitting the return in case of the appellant was October 31, 2023 which was further extended to November 30, October 31, 2023 which was further extended to November 30, October 31, 2023 which was further extended to November 30, 2023. There was a delay of 29 days 2023. There was a delay of 29 days in filing the Form 10B. in filing the Form 10B. Hence, Form 10B was not filed within the time frame outlined by Hence, Form 10B was not filed within the time frame outlined by Hence, Form 10B was not filed within the time frame outlined by the Act. 6.6 In view of the above, I find no error in the AO’s decision to In view of the above, I find no error in the AO’s decision to In view of the above, I find no error in the AO’s decision to disallow the appellant's claim for exemption under Section 11 disallow the appellant's claim for exemption under Section 11 disallow the appellant's claim for exemption under Section 11 and 12 of the Act when process and 12 of the Act when processing the return under Section ing the return under Section 143(1) of the Act. 143(1) of the Act. 7.1 Further, Section 119 empowers the Board to issue orders and Further, Section 119 empowers the Board to issue orders and Further, Section 119 empowers the Board to issue orders and guidelines regarding the condonation of delay in compliance with guidelines regarding the condonation of delay in compliance with guidelines regarding the condonation of delay in compliance with any provision of the Act. Section 119(2) reads as follows: any provision of the Act. Section 119(2) reads as follows: any provision of the Act. Section 119(2) reads as follows: Section 119(2) Section 119(2) 1. 1….. 2. the Board may, if it considers it desirable or expedient so to do the Board may, if it considers it desirable or expedient so to do the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by for avoiding genuine hardship in any case or class of cases, by for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income general or special order, authorise any income-tax authority, not tax authority, not being a Joint Commissioner (Appeals) or a Commissioner being a Joint Commissioner (Appeals) or a Commissioner being a Joint Commissioner (Appeals) or a Commissioner (Appeals) to admit an application or claim for any exemption, (Appeals) to admit an application or claim for any exemption, (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the deduction, refund or any other relief under this Act after the deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making expiry of the period specified by or under this Act for making expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in such application or claim and deal with the same on merits in such application or claim and deal with the same on merits in accordance with law." dance with law." 7.2 In this context, the Central Board of Direct Taxes (CBDT) In this context, the Central Board of Direct Taxes (CBDT) In this context, the Central Board of Direct Taxes (CBDT) issued Circular 16/2024 dated 18.11.2024. The relevant issued Circular 16/2024 dated 18.11.2024. The relevant issued Circular 16/2024 dated 18.11.2024. The relevant excerpts from the same are as follows: excerpts from the same are as follows: Sub: Condonation of delay under section 119(2)(b) of Sub: Condonation of delay under section 119(2)(b) of Sub: Condonation of delay under section 119(2)(b) of the Income the Income-tax Act, 1961 in filing of Form No. ling of Form No. 9A/10/10B/10BB for Assessment Year 2018-19 and 9A/10/10B/10BB for Assessment Year 2018 9A/10/10B/10BB for Assessment Year 2018 subsequent assessment years subsequent assessment years - Reg. In supersession of all earlier Circulars/Instructions issued In supersession of all earlier Circulars/Instructions issued In supersession of all earlier Circulars/Instructions issued by the Central Board of Direct Taxes ('CBDT’) from time to by the Central Board of Direct Taxes ('CBDT’) from time to by the Central Board of Direct Taxes ('CBDT’) from time to time to deal with the applications fo time to deal with the applications for condonation of delay r condonation of delay in filing Form 9A/10/10B/1 OBB for Assessment Year in filing Form 9A/10/10B/1 OBB for Assessment Year in filing Form 9A/10/10B/1 OBB for Assessment Year 2018-19 and subsequent assessment years, the CBDT in 19 and subsequent assessment years, the CBDT in 19 and subsequent assessment years, the CBDT in exercise of the powers conferred under exercise of the powers conferred under section 119(2)(b) of section 119(2)(b) of the Income Tax Act ('the Act’), authorizes: the Income Tax Act ('the Act’), authorizes: 1.1 the the Pr. Commissioners Pr. Commissioners of of Income Tax Income Tax (Tr. (Tr. CsIT’)/ CsIT’)/ Commissioners of Income Tax ('CsIT') to admit and deal with Commissioners of Income Tax ('CsIT') to admit and deal with Commissioners of Income Tax ('CsIT') to admit and deal with applications for condonation of delay in filing Form No. applications for condonation of delay in filing Form No. applications for condonation of delay in filing Form No. 9A/10/1OB/IOBB 9A/10/1OB/IOBB 9A/10/1OB/IOBB for for for Assessment Assessment Assessment Year Year Year 2018-19 2018 2018 and subsequent assessment years where there is a delay of upto 365 subsequent assessment years where there is a delay of upto 365 subsequent assessment years where there is a delay of upto 365 days. 1.2 the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief Commissioner of Income Tax ('CCsIT')/ Director Generals of Commissioner of Income Tax ('CCsIT')/ Director Generals of Commissioner of Income Tax ('CCsIT')/ Director Generals of Income Tax ('DGsIT’) to admit and deal with applications for Income Tax ('DGsIT’) to admit and deal with applications for Income Tax ('DGsIT’) to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for Assessment Year 2018 ssment Year 2018-19 and subsequent assessment years 19 and subsequent assessment years where there is a delay of more than 365 days. where there is a delay of more than 365 days.

4. The delegation of powers, as per para 1.1 & 1.2 of this The delegation of powers, as per para 1.1 & 1.2 of this The delegation of powers, as per para 1.1 & 1.2 of this Circular shall cover Circular shall cover all such applications for condonation of delay all such applications for condonation of delay under section 119(2)(b) of the Act which are pending as on date under section 119(2)(b) of the Act which are pending as on date under section 119(2)(b) of the Act which are pending as on date of issue of this Circular. of issue of this Circular. i 7.3 It is evident from the CBDT It is evident from the CBDT Circulars and Section 119(2)(b) of Circulars and Section 119(2)(b) of the Act that the Assessing Officer (AO), Joint Commissioner of the Act that the Assessing Officer (AO), Joint Commissioner of the Act that the Assessing Officer (AO), Joint Commissioner of Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax (Appeals) [CIT(A)] do not have the authority under Section (Appeals) [CIT(A)] do not have the authority under Section (Appeals) [CIT(A)] do not have the authority under Section 119(2)(b) of the Income Tax Act to 119(2)(b) of the Income Tax Act to grant condonation for the delay grant condonation for the delay in filing Form 10B. in filing Form 10B. 7.4 Therefore, neither the AO during return processing nor I, the Therefore, neither the AO during return processing nor I, the Therefore, neither the AO during return processing nor I, the JCIT(Appeals) i when finalizing the appeal, are empowered by JCIT(Appeals) i when finalizing the appeal, are empowered by JCIT(Appeals) i when finalizing the appeal, are empowered by the statute to entertain the appellant's condonation application the statute to entertain the appellant's condonation application the statute to entertain the appellant's condonation application for Form 10B. . 7.5 The appellant has the option to approach the The appellant has the option to approach the The appellant has the option to approach the jurisdictional jurisdictional jurisdictional Commissioner Commissioner Commissioner of of of Income Income Income Tax, Tax, Tax, Chief Chief Chief Commissioner Commissioner Commissioner of of of Income Income Income Tax, Tax, Tax, or or or Principal Principal Principal Chief Chief Chief Commissioner of Commissioner of Income Tax for the condonation of the Income Tax for the condonation of the delay in filing Form 10B and to claim the benefits of delay in filing Form 10B and to claim the benefits of delay in filing Form 10B and to claim the benefits of Sections 11 and 12 of the Act. ections 11 and 12 of the Act. In view of the above, I find no merit in the current appeal and, as In view of the above, I find no merit in the current appeal and, as In view of the above, I find no merit in the current appeal and, as a result, dismiss the appeal. a result, dismiss the appeal.”

4.1 In the present case, the limited controversy pertains to denial In the present case, the limited controversy pertains to denial In the present case, the limited controversy pertains to denial of exemption under Section 11 solely on the ground of delayed filing of exemption under Section 11 solely on the ground of delayed fil of exemption under Section 11 solely on the ground of delayed fil of Form No. 10B. It is not in dispute that the audit report was, in of Form No. 10B. It is not in dispute that the audit report was, in of Form No. 10B. It is not in dispute that the audit report was, in fact, filed before the date of return filing and was very much fact, filed before the date of return filing and was very much fact, filed before the date of return filing and was very much available at the time of processing of the return. The delay in filing available at the time of processing of the return. The delay in filing available at the time of processing of the return. The delay in filing Form 10B was of 29 days. In light of the CBDT Circular No. Form 10B was of 29 days. In light of the CBDT Circ Form 10B was of 29 days. In light of the CBDT Circ 16/2024 (supra), the jurisdiction to condone such delay vests with 16/2024 (supra), the jurisdiction to condone such delay vests with 16/2024 (supra), the jurisdiction to condone such delay vests with the concerned Principal Commissioner/Chief Commissioner of the concerned Principal Commissioner/Chief Commissioner of the concerned Principal Commissioner/Chief Commissioner of Income Tax.

4.2 In our considered view, when the condonation application was considered view, when the condonation application was considered view, when the condonation application was already pending consideration before the com already pending consideration before the competent authority, it petent authority, it was incumbent upon the CIT(A) to defer the decision in appeal and was incumbent upon the CIT(A) to defer the decision in appeal and was incumbent upon the CIT(A) to defer the decision in appeal and await the outcome of such application. Proceeding to affirm the await the outcome of such application. Proceeding to affirm the await the outcome of such application. Proceeding to affirm the disallowance, disallowance, disallowance, without without without waiting waiting waiting for for for the the the adjudication adjudication adjudication of of of the the the condonation petition, has caused prejudice to t condonation petition, has caused prejudice to the assessee. he assessee.

The Hon’ble Bombay High Court in The Hon’ble Bombay High Court in Mirae Asset Foundation Mirae Asset Foundation (supra) has held that where delay is not inordinate and explanation is has held that where delay is not inordinate and explanation is has held that where delay is not inordinate and explanation is forthcoming, the benefit of exemption under Section 11 should not forthcoming, the benefit of exemption under Section 11 should not forthcoming, the benefit of exemption under Section 11 should not be denied solely on account of procedural non-compliance, if be denied solely on account of procedural non be denied solely on account of procedural non otherwise the conditions of the statute are fulfilled. otherwise the conditions of the statute are fulfilled.

4.3 Respectfully following the binding precedent of the Hon’ble Respectfully following the binding precedent of the Hon’ble Respectfully following the binding precedent of the Hon’ble Bombay High Court and considering the CBDT Circular, we direct Bombay High Court and considering the CBDT Circular, we direct Bombay High Court and considering the CBDT Circular, we direct the jurisdictional Principal Commissioner/Chief Commissioner of the jurisdictional Principal Commissioner/Chief Commissioner of the jurisdictional Principal Commissioner/Chief Commissioner of Income Tax to examine and dispose of the assessee’s application for Income Tax to examine and dispose of the assessee’s application for Income Tax to examine and dispose of the assessee’s application for condonation of delay in filing Form 10B in accordance with law and condonation of delay in filing Form 10B in accordance with law and condonation of delay in filing Form 10B in accordance with law and upon being satisfied that the delay was occasioned by reasonable upon being satisfied that the delay was occasioned by reasonable upon being satisfied that the delay was occasioned by reasonable cause.

4.4 We further restore the matter to the file of We further restore the matter to the file of the CIT(A) with a the CIT(A) with a direction to adjudicate the appeal afresh after the competent direction to adjudicate the appeal afresh after the competent direction to adjudicate the appeal afresh after the competent authority disposes of the condonation application. The CIT(A) shall authority disposes of the condonation application. The CIT(A) shall authority disposes of the condonation application. The CIT(A) shall grant liberty to the assessee to place on record the final outcome of grant liberty to the assessee to place on record the final outcome of grant liberty to the assessee to place on record the final outcome of the said condonation request. the said condonation request.

4.5 In view of the above, the grounds raised by the assessee are view of the above, the grounds raised by the assessee are view of the above, the grounds raised by the assessee are restored to the file of the restored to the file of the ld CIT(A) for adjudication in accordance for adjudication in accordance with law. The grounds raised by the assessee are allowed for he grounds raised by the assessee are allowed for he grounds raised by the assessee are allowed for statistical purposes.