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Facts
The assessee, a trust, filed its return for AY 2021-22. The CPC passed an order u/s 143(1) disallowing amounts applied for charitable purposes due to late filing of the audit report in Form 10B. The assessee appealed against this order, but the CIT(A) dismissed the appeal, stating it had no power to condone the delay.
Held
The Tribunal held that the delay of one day in filing Form 10B was due to a technical glitch and that the filing of Form 10B is a procedural requirement, not a mandatory one. Therefore, the delay should be condoned.
Key Issues
Whether the delay of one day in filing Form 10B can lead to the disallowance of the claim, and whether the appellate authorities have the power to condone such a delay.
Sections Cited
12AA, 11(2), 143(1), 119(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI SONJOY SARMA, JM & SHRI SANJAY AWASTHI, AM
O R D E R
Per Sonjoy Sarma, JM:
This is an appeal filed by the assessee against the order, dated 28.12.2024 passed by the ld. Addl./JCIT(A), Panaji, for the assessment year 2021-2022.
The appeal of the assessee is barred by 60 days. In this regard, the assessee has filed an application for condonation of delay supported with an affidavit stating therein that the delay of 60 days in filing the present appeal is due to lack of knowledge about the order passed by the ld.PCIT. Accordingly, the assessee prayed that the delay of 60 days may kindly be condoned and appeal of the assessee may kindly be admitted for hearing. Ld. Sr. DR did not raise any objection to this contention of the assessee for condonation of delay. Accordingly, we are of the view that the assessee 2 has stated the sufficient reasons for condonation of delay, therefore, condoned the delay of 60 days in filing the present appeal and the appeal is admitted for hearing.
Brief facts of the case are that the assessee is a trust duly registered u/s.12AA of the Act and filed its return of income for the assessment year in question. Subsequently, the order u/s.143(1) of the Act was passed on 23.08.2022 by the ADIT(CPC), Bengaluru. As per the declaration in Form 35, a date of service of the impugned order and demand notice was also stated to be 23.08.2022. Aggrieved by the above order, the assessee preferred appeal before the ld.CIT(A) stating the fact that the assessee has been engaged in running an ITI College, an approved educational institution since its inception. During the assessment year in question the audit report for the assessment year 2021-2022 relevant to financial year 2020-2021 u/s.12A(b) of the Ac in case of charitable or religious trusts or institution in Form 10B(Rules 17B) was filed and uploaded on 16th March, 2021, however, the due date of which was 15.03.2021 and the return of income under the provisions was also filed and uploaded on 16.03.2021. During the year the gross total income of the assessee was declared at Rs.39,18,463/- The amount applied for charitable purpose was Rs.35,04,508/- and accumulation u/s.11(2) of the Act was Rs.4,13,955/-. The CPC has disallowed the amount applied for charitable trust and accumulation u/s.11(2) of the Act taxed the entire income due to audit report filed after due date by raising the demand along with interest of Rs.12,69,400/-. The assessee during the appellate proceedings relied on a Circular issued by 3 the CBDT being Circular No.16/2022, dated 19th July, 2022, wherein it was stated that where there is a delay beyond 365 days upto three years in filing Form No.10B for Assessment Year 2018-2019 or for any subsequent assessment years, the Pr.Chief Commissioner of Income-tax/Chief Commissioner of Income-tax are authorized to admit such applications of condonation of delay under section 119(2) of the Act and decide on merits. However, while deciding the appeal of the assessee, the ld. CIT(A) dismissed the appeal of the assessee stating that the ld. CIT(A) has no power to condone the delay for late filing of Form 10B.
Aggrieved by the above order, the assessee is in further appeal before the Tribunal raising various grounds, however, the primary contention of the assessee is that the assessee could not file the audit report in due course as prescribed under the law which was 15th March, 2021 but the assessee has filed the same only after 01 day delay i.e.on 16th March, 2021. This delay was due to technical glitch in the IT Portal at that point of time. Even the Pr.CCIT or CCIT has power to condone the delay under the appropriate provisions of the Act as per the CBDT Circular No.16/2022, dated 19th July, 2022, where there is a delay of 365 days or more in filing Form 10B, but it was never considered by the ld.CIT(A) stating the reason that the ld. CIT(A) has no such power. Even the assessee filed an application for condonation of delay before the ld. Pr.CIT on 15.12.2022 but the application of the assessee was dismissed on 27.05.2023 citing the reasons that non-submission of the reply as asked for. The assessee further in order to redress the issue also filed an application dated 4 05.02.2025 before the ld. Pr.CIT, Hyderabad but on 11.03.2025, the application for condonation of delay was again rejected. Ultimately, the assessee has no other option but to approach this Tribunal for redressal of the above issue.
Ld. Sr. DR. supported the decision of the authorities below and stated that the impugned order passed by the ld. CIT(A) was correct since the ld. CIT(A) has no such power to condone the delay.
We after hearing the rival submissions of both the parties and perusing the material available on record, find that in the present case of the assessee the other compliances were made by the assessee, however, in filing the Form 10B, the assessee has failed to submit the same with a delay of 01 day for which the assessee cannot be penalized by disallowing the claim as made in the return of income. Since the filing of Form 10B is a procedural requirement rather than mandatory requirement, considering the same, we do hereby condone the delay in filing the Form 10B as in the case of the assessee and accordingly direct the AO to allow the claim of the assessee as per the provisions of law.
In terms of above, appeal of the assessee is allowed. Order pronounced in the open court on 02/09/2025. (SANJAY AWASTHI) (SONJOY SARMA) लेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER Kolkata, ददनाांक Dated 02/09/2025 Prakash Kumar Mishra, Sr.P.S.