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Facts
The assessee trust, registered under Section 12A, claimed exemption under Section 11 and 12 of the Income Tax Act for AY 2016-17. However, it failed to file Form 10B within the prescribed time. The assessee also faced delays in filing appeals before the lower authorities.
Held
The Tribunal held that while there was a significant delay in filing Form 10B and subsequent appeals, the technicality of delay should not override the interest of justice. Relying on judicial precedents, the Tribunal condoned the delay in filing Form 10B and directed the AO to process the return considering the exemption claim.
Key Issues
Whether the delay in filing Form 10B and subsequent appeals warrants denial of exemption under Section 11 and 12 of the Income Tax Act, and if the delay can be condoned in the interest of justice.
Sections Cited
11, 12, 12A, 119(2)(b), 143(1), 154, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE
O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-2, Pune on 15.07.2025 for A.Y. 2016-17.
The grounds of appeal raised by the assessee are as under:
“1. The order passed by lower authorities is bad in law and required to be quashed.
Ld. JCIT(A) erred in law and on facts in deciding appeal ignoring various submissions.
Ld. JCIT(A) erred in law and on facts in rejecting benefit u/s 11 of the Act of Rs. 48,62,530/- ignoring fact that Form 10B filed subsequently and accordingly, same is considered as technical default which does not take away fundamental rights.
Ld. JCIT(A) ought to have granted benefit u/s 11 of the Act considering various submissions made by appellant.
Without prejudice to the above and in alternative, Ld. NFAC ought to have give direction to compute income on commercial principle and real income theory.
Charging of Interest u/s 234A, 234B, 234C are unjustified.”
vs. ITO Asst.Year–2016-17 - 2 - 3. The assessee is a trust and registered under Section 12A of the Act. At the time of filing return of income on 13.09.2016 the assessee claimed benefit under Section 11 and 12 of the Act. However, the assessee did not file Form 10B within the prescribed time as per the Income Tax Act. The assessee trust received intimation under Section 143(1) of the Income Tax Act, 1961 dated 21.02.2018 thereby rejecting the said claim by the Revenue. Thereafter, the assessee trust filed rectification under Section 154 of the Act and subsequently filed Form 10B along with condonation of delay application under Section 119(2)(b) of the Act.
The PCIT (Exemption) rejected the condonation application and therefore, the assessee filed the appeal before the CIT(A). The CIT(A) vide order dated 15.07.2025 categorically noted that there is a delay of about 2617 days in filing the appeal, therefore, the appeal is rejected on the ground that the delay was not sufficiently explained by the assesee trust.
Being aggrieved by the order of the CIT(A), the assessee filed appeal before the Tribunal.
At the time of hearing the Ld. AR has filed the date chart which is as under: Devasthan Trust Sr. No. Particulars Date 1 Date of signing of accounts 02/08/2016 2 Date of filing ITR 30/09/2016 3 Date of filing rectification Online 05/03/2018 4 Date of filing Form 10B 27/11/2023 5 Date of filing Condonation for ( orm 10B 20/12/2023 6 Letter received from PCIT office by Email 27/12/2023 7 Reply filed to PCIT office by Email 03/01/2024
The Ld. AR submitted that the assessee trust filed Form 10B subsequently but while filing return of income thereby claiming benefit of Section 11 and 12 as caused procedural error which does not take away statutory right of the assessee trust for denial of claim of benefits of Section 11 and 12 of the Income Tax Act. The Ld. AR submitted that the assessee trust had filed return of income declaring total income as NIL and is registered under Section 12A of the Act. The Ld. AR relied upon the following decisions:
(i) Association of India Panel Board Manufacturer 482 ITR 54 (Guj.) (ii) Laxminarayan Dev Shrishan Seva Kendra 167taxmann.com 548 (Guj.) (iii) Anjana Foundation 168 taxmann.com 462 (Guj.) (iv) Health Foundation and Research Centre 175 taxmann.com 447 (Ahd.) (v) Aurangabad Electricals Pvt. Ltd. (Supreme Court) 2010 SCC Online SC 1277
The Ld. AR submitted that merely in delay in filing the Form 10B and thereafter delay in filing the appeal before the CIT(A) cannot be the criteria for denying the benefit of the genuine claim of exemption under Section 11 and 12 of the Act.
The Ld. DR relied upon the assessment order / intimation order and the order of the CIT(A). Further the Ld. DR submitted that at no point of Devsthan Trust vs. ITO Asst.Year–2016-17 - 4 - time the assessee explain the delay which is exorbitant in nature under what circumstances delay occurred.
I have heard both the parties and perused all the relevant materials available on record. At the time of filing the appeal before the CIT(A) for the reason of delay, the assessee trust has explained that the assessee has filed rectification on 05.03.2018 but the same was decided on 28.01.2025. Thereafter, within six months period the assessee has filed appeal before the CIT(A) though it is delayed, it cannot be stated as exorbitant delay as the assessee was exercising its rights of filing the rectification application and also waited for the order passed under Section 119(1)(b) of the Act. The contention of the Ld. DR that the delay is deliberately does not have substantial support. Hence, the delay in filing the appeal before the CIT(A) cannot bare the assessee trust to claim the exemption which otherwise if Form 10B would have been filed within the stipulated time itself. On 27.11.2023 which is almost the seven years delay from the date of filing of original return and that also five years from the date of intimation order. This delay cannot be entertained but looking into the decision of Hon’ble Supreme Court in case of Aurangabad Electricals Pvt. Ltd. vs. Commissioner of Central Excise And Customs, Aurangabad (2011) 1 Supreme Court Cases 121, in the interest of justice, the technicality should come after the said interest of justice. Therefore, in the present case the delay in filing Form 10B is condoned and in light of the decision of Hon’ble Bombay High Court in case of Shamal Mohan Patil Education Society vs. CIT(E) (2025) 181 taxmann.com 16 (Bombay), we direct the AO to treat Form 10B filed by the assessee trust on 27.11.2023 has filed within the stipulated time and processed the return of Devsthan Trust vs. ITO Asst.Year–2016-17 - 5 - income as per the exemption claimed by the assessee trust according to the provision of Sections 11 and 12 of the Act. In the facts and circumstances of the present case, I am allowing this appeal but this cannot be treated as persistent as this is in consonance with the peculiar facts of the present case.
In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 09/04/2026