ROMAN CATHOLIC CHURCH OF ST. JOSEPH ,MUMBAI vs. ITO WARD 2(2), MUMBAI

In the instant case, the Assessee being a Public Charitable Trust registered under section 12A(b) of the Act, as well as under the Maharashtra Public Trusts Act, 1950 has claimed exemption u/s 11 and 12 of the Act, by filing its return of income in Form ITR – 7 on dated 29.11.2023 within the due date, as extended upto 30.11.2023, as involved u/s 139(1) of the Act.

The claim of the Assessee was rejected by the CPC vide intimation dated 19.11.2024 u/s 143(1) of the Act, mainly on the reason the Assessee failed to file the Audit Report in Form – 10B within the prescribed due date u/s 139(1) of the Act, and/or filed belatedly with a delay of 29 days. Thus, the CPC vide intimation dated 19.11.2024 ultimately made the additions of Rs.88,95,454/- and Rs.2,64,619/- respectively on account of accumulation u/s 11(1)(a) of the Act, and capital expenditure, which was claimed as application.

The Assessee being aggrieved challenged the said additions made by the CPC. However, could not get any relief from the Ld. Commissioner, as the Ld. Commissioner while relying on judgment by the Hon’ble Apex Court in the case of Pr. CIT Vs. Wipro limited (2022) 448 ITR (1) (SC) and various other judgments and by holding that CPC cannot enter into debatable or controversial issue u/s 143(1) of the Act, denied the exemption claimed by affirming the additions and dismissing the Appeal of the Assessee. Thus, the Assessee being aggrieved has preferred the instant Appeal.

However, the Assessee was supposed to file the Audit Report in Form-10B on or before 31.10.2023, as per Circular No.16/2023 dated 18.09.2023 by which the date for filing Form -10B was extended. Thus, there was a delay of 29 days in filing Form – 10B which ultimately resulted into not allowing the exemption claimed u/s 11 and 10 of the Act, by the authorities below.

We observe that the Hon’ble Coordinate Bench of the Tribunal in the case of M/s. Nasik ST. Xavier’s Society vs. Central Processing Centre, Income Tax Department, Bengaluru, (ITA No.1364/M/2025 decided on 29.08.2025) has also dealt with an identical issue, wherein there was a delay in filing to Form-10B and the Hon’ble Coordinate Bench of the Tribunal by considering various judgments of the Hon’ble High Courts and the fact that the Hon’ble Gujarat [10.09.2024] also distinguished the judgment of the Hon’ble Apex Court in the case of Pr.CIT vs. Wipro Limited (supra) as relied on by the Ld. Commissioner, in approving the decision of the CPC, rejecting the deduction claimed by the Assessee u/s. 11 of the Act.

We further observe that the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax (Exemption) Vs. Laxminarayandev Shikshan Seva Kendra (2024) 167 taxmann.com 548 (Guj.) (10.09.2024) has also dealt with the issue "wherein the Form 10B was filed during the course of appellate proceedings before the Commissioner (Appeals) who allowed the benefit of section 11 of the Act to the Assessee" and the Tribunal upheld the said decision of the Ld. Commissioner.

The Hon'ble Gujarat High Court also distinguished the judgment of the Hon'ble Apex Court in the case of Pr. CIT Vs. Wipro Ltd. (2022) 446 ITR (1)(SC), which has been relied on by the Ld. Commissioner in approving the decision of the CPC, while rejecting the deduction claimed by the Assessee u/s 11 of the Act.

We further observe that the Hon'ble Juri ictional High Court in the case of Mirae Audit Foundation Vs. Pr. Commissioner of Income Tax-6, Mumbai & Ors. has also taken into consideration the Judgment of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust case (supra) and ultimately condoned the delay of 246 days in filing of Form 108 by holding as under:

Thus, on the aforesaid analyzations, we direct the AO to consider Form no.10B filed by the Assessee, as valid and verify the facts and determine on merit, the deduction/exemption claimed by the Assessee.

We further observe that Hon’ble Juri ictional High Court in the case of Church of Our Lady of Immaculate Conception vs. Commissioner of Income tax (Exemption) and Ors., in (Writ Petition (L) No.14461 of 2025 decided on 02.09.2025) has also dealt with identical case, wherein there was a delay of 29 days in filing of Form- 10B. The Hon’ble Juri ictional High Court by considering the judgment of the Hon’ble Gujarat High Court i.e., Sarvodaya Charitable Trust case (supra), ultimately condoned the delay in filing the Form – 10B of the Act, by observing and holding as under:-

We are of the view that Respondent No.1 ought to have taken a justice oriented approach rather than a pedantic one, and condoned the delay. We also find that in similar facts, this Court in the case of Mirae Asset Foundation (supra), Sau Dwarkabai tai Karwa Charitable Trust (supra) and Kotak Family Foundation (supra) has taken a similar view and condoned the delay. Even the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust (supra) took the view that in cases like the present one (delay in filing Form No.10B), the approach of the authorities ought to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation. This is more so, when the legislature has conferred wide discretionary powers to condone the delay on the authorities concerned. The relevant portion of this decision reads thus:-

We may also refer to the decision of this Court in CIT. v. Gujarat Oil and Allied Industries Ltd. [1993] 201 ITR 325 (Guj.), wherein it is held that the provision regarding furnishing of audit report with the return has to be treated us a procedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. This Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either before the Income Tax Officer or before the appellate authority by assigning sufficient cause."

Now that the impugned order is quashed, we also hereby condone the delay in filing Form No.10B by the Petitioner.”

Thus on the aforesaid, analyzations and respectfully following the aforesaid decisions, we deem it appropriate to condone the delay of 29 days in filing of Form – 10B, hence, the orders passed by the authorities below are set aside and the Assessing Officer is directed to consider Form – 10B filed by the Assessee, as valid and verify the facts and determine on merit, the deduction/exemption claimed by the Assessee.

In the result, the Assessee’s Appeal is allowed, in the above terms.

The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT