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Facts
The assessee, a charitable society, claimed exemption under Sections 11 and 12 of the Income Tax Act, which the AO denied. The CIT(A) dismissed the assessee's appeal solely due to a 10-day delay in uploading Form 10B.
Held
The tribunal condoned the 10-day delay in filing Form 10B, considering it a procedural omission that can be excused, citing several prior judgments. It directed the Assessing Officer to allow the exemption under Sections 11 and 12 as per law, restoring the case to the AO.
Key Issues
Whether a minor delay of 10 days in filing Form 10B, a procedural requirement, should be condoned for a charitable trust seeking exemption under Sections 11 and 12 of the Income Tax Act.
Sections Cited
11, 12, 12A, 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH: KOLKATA
Before: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-Addl./JCIT(A)-Faridabad (hereinafter referred to as the “Ld. CIT(A)”] dated 19.09.2024 for the AY 2022-23. On call at the time of hearing none appeared on behalf of the assessee, DR present and we have heard the DR, and decided to pass order on the material available on the record Assessment Year: 2022-23 Vivekananda Bayam Samity 2. Brief facts of the case of the assessee are that the assessee being a charitable society registered under the Registrar of Firms, Societies and Non-trading Corporations, West Bengal filed its return of income declaring total income of Nil after claiming exemption of its income u/s 11 and 12 of the act. The AO completed the assessment and computed the income of the assessee at Rs. 18,60,958/- by denying the claim u/s 11 and 12 of the Act.
Aggrieved by the said computation the appeal has been filed by the assessee before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed on the ground that there was a delay of 10 days in uploading the report in Form no. 10B in the portal.
Being aggrieved and dissatisfied the assessee has preferred an appeal before us.
4. The Ld. Counsel of the assessee challenges the very impugned order as it appears in the grounds of appeal are that the AO as well as Ld. CIT(A) has erred in denying the exemption ignoring the settled law the submission of Form no. 10B is a procedural omission that can be condoned. The further ground is that that the assessee is a charitable institution and registered u/s 12A and provisional registration u/s 80G(5)has also been granted.
5. Contrary to that, the ld. D.R supports the impugned order.
Upon hearing the Ld. D.R, and on perusal of order passed by lower authorities we find that the assessee is a society registered under Registrar of Firm Society and non-trading Corporation, West Bengal. The main activities of the assessee are development of sports and games and to make proper arrangement in the physical intellectual and moral culture of all and sundries irrespective of caste and creed. Return of income for AY 2022-23 has been filed along with audited report in Form no. 10B. It is also not in dispute that provisional registration u/s 12A has been granted to the assessee and provisional approval u/s 80G(5) has also been granted to the assessee for AY 2022-23 to 2024-25. We have gone through the order passed by the Ld. CIT(A) and Assessment Year: 2022-23 Vivekananda Bayam Samity find that denial of claim of exemption u/s 11 and 12 only on this ground that there was a delay of 10 days in uploading the report in form no. 10B of the portal. In this context, we have gone through the several orders passed by the tribunal. In the case of Kaydee Foundation vs. ITO in for AY 2022-23 dated 31.12.2024 Kolkata Bench has held that filing of form no. 10B is procedural in nature and that can be condoned. In the case of Manav Seva Trust vs. CIT(E ) in ITA No. 909/Kol/2024 dated 26th July, 2024 Kolkata Bench has discussed this issue at length and passed order in favour of the issue, the relevant portion of order is reproduced here in below:-
“3. We have considered the submissions by both the ld. A/R and ld. D/R and also perused the orders of ld. AO and the ld. CIT(A). Ld. A/R has relied on the case of Hari Gyan Pracharak Trust vs. DCIT in order dated 16.06.2023. In this case, the Coordinate Bench has held that since filing of Form-10B is merely a procedural requirement, any defect in that is curable. It is seen that the Hon'ble Orissa High Court in the case of Oneness Educational and Charitable Trust vs. Commissioner of Income-tax (Exemption) reported in [2024] 161 taxmann.com 544 (Orissa) has held that the oversight in not filing Form-10B within the due date was to be condoned and the exemption was to be allowed and granted. Also, the Hon'ble Telangana High Court in the case of Global Organization for Development vs. Commissioner of Income-tax (Exemption) reported in [2024] 162 taxmann.com 633 (Telangana) has held that the delay on the part of the assessee in submitting Form-10B was to be condoned and the matter remanded back to the file of the AO for passing appropriate order on merits. Similarly, the Hon'ble Bombay High Court in the case of Al Jamia Mohammediyah Education Society vs. Commissioner of Income-tax (Exemptions) reported in [2024] 162 taxmann.com 114 (Bombay) has held that where the assessee Trust belatedly submitted Form-10B, along with return, on account of oversight by the Chartered Accountant, the delay in filing of Form-10B deserves to be condoned. In fact, some relevant portions from the said order deserves to be extracted as under: “■ Admittedly, Petitioner is a charitable trust and had been filing its returns and Form 10B for AY 2015-16, for AY 2017-18 to AY 2021-22 within the due dates. On this ground alone, delay condonation application should have been allowed because the failure to file returns for AY 2016-17 could be only due to human error. Even in the impugned order, there is no allegation of mala fide. As held by the Gujarat High Court in Sarvodaya Charitable Trust v. ITO (Exemption) [2021] 125 taxmann.com 75/278 Taxman 148, the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, Respondent No.1 might be justified in denying the exemption by rejecting such condonation application, but an assessee, a public charitable trust with almost over thirty years, which otherwise satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. [Para 6] Assessment Year: 2022-23 Vivekananda Bayam Samity ■ Moreover, the Petitioner does not appear to have been lethargic or lacking in bona fides in making the claim beyond the period of limitation which should have a relevance to the desirability and expedience for exercising such power. Such routine exercise of powers would neither be expedient nor desirable, since the entire machinery of tax calculation, processing of assessment and further recoveries or refunds, would get thrown out of gear, Page 3 of 5 I.T.A. No.: 940/KOL/2024 Assessment Year: 2018-19 Manav Seva Trust. if such powers are routinely exercised without considering its desirability and expedience to do so to avoid genuine hardship. [Para 7] ■ In a similar matter in Shree Jain Swetamber Murtipujak Tapagachha Sangh v. CIT (Exemptions) [2024] 161 taxmann.com114 (Bombay) was also a case where auditor had due to oversight not filed Form 10B. The Court held that the error on the part of auditor cannot be rejected but should be accepted as a reasonable cause shown by the trust management. In that case also, Petitioner did not suo moto realize its mistake and filed a condonation request only after Centralised Processing Centre (“CPC”) sent an intimation about non-filing of Form 10B. [Para 8] ■ Having considered the matter in its entirety, one is satisfied that the delay was not intentional or deliberate. Petitioner cannot be prejudiced on account of an ignorance or error committed by professional engaged by Petitioner. Respondent No.1 ought to have exercised the powers conferred. [Para 9] ■ In the circumstances, this Writ Petition has to be allowed and is hereby allowed in terms of prayer clause. ■ Since the delay has been condoned, Respondent shall process Petitioner’s returns in accordance with law by giving effect to this order on the basis that Form No.10B has been filed within time. [Para 11]”
Considering the discussions made above, the delay in filing of Form10B is hereby condoned and it is directed that the appellant be allowed exemption as would be due to him as per law. The ld. AO is directed accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.”
Keeping in view the above decision and considering the facts of the present case delay in filing form 10B is here by condoned. A.O is directed that the appellant be allowed exemption as would be due to him as per law. Case of the assessee is restored in the file of the A.O.
In the result, the appeal of assessee is allowed for statistical purposes. Order is pronounced in the open court on 17th March, 2025
Sd/- Sd/- (Sanjay Awasthi/संजय अव�थी) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 17th March, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Vivekananda Bayam Samity, Berhampore-742101 2. Respondent – ITO, Ward-42(1), Murshidabad 3. Ld. CIT(A)-Addl./JCIT(A)-Faridabad 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)