2017 (5) TMI 583 - HC - Income Tax

Court quashes order rejecting trust's form, emphasizes need for proper consideration in tax matters

Shree Jain Swetamber Sangh Versus Anil Kumar

The High Court quashed the order rejecting a religious and charitable trust's application to condone delay in submitting Form No.10 under the Income Tax ... Exemption u/s 11 - Condonation of delay in respect of defective form - rectified Form No.10 filled - Claim of the petitioner under Section 11(2) - Held that:- The respondent authority has not considered at all the rectified Form No.10, which was filed somewhere on 16 & 21/11/2016 and in any case it was prior to the impugned order dated 28/11/2016 wherein the respondent authority has observed that the question of condonation of delay in respect of defective form does not arise. Under the circumstances, we are of the opinion that when the petitioner had already filed the rectified Form No.10, which was filed prior to the impugned order, the respondent authority was required to consider the same in accordance with law. Under the circumstances, the matter is required to be remanded to the respondent authority to consider the application of the petitioner and /or claim of the petitioner under Section 11(2) of the Act afresh by considering rectified Form No.10 in accordance with law for which we have not expressed any opinion whether such rectified Form was permissible or not. However, in any case, the respondent authority was required to deal with rectified Form No.10. Issues:1. Petition under Article 226 of the Constitution to quash an order under Section 119(2)(b) of the Income Tax Act.2. Delay in submitting Form No.10 by a religious and charitable trust.3. Rejection of the application for condonation of delay due to a defective original Form No.10.4. Failure of the respondent authority to consider the rectified Form No.10.5. Remand of the matter to the respondent authority for fresh consideration.Issue 1: Petition under Article 226 of the Constitution to quash an order under Section 119(2)(b) of the Income Tax Act.The petitioner, a religious and charitable trust, filed a petition under Article 226 seeking to quash an order dated 28/11/2016 passed under Section 119(2)(b) of the Income Tax Act. The order rejected the application to condone the delay in submitting Form No.10, citing the original form's defectiveness as the reason for the rejection.Issue 2: Delay in submitting Form No.10 by a religious and charitable trust.The petitioner, in this case, failed to submit Form No.10, which is required under Section 11(2) of the Act to evidence the accumulation of a specified sum. Despite filing the income return for the Assessment Year 2014-15 and setting apart the specified sum, the Form No.10 was not submitted within the prescribed period. This led to the rejection of the accumulation benefit during the processing of the return under Section 143(1) of the Act.Issue 3: Rejection of the application for condonation of delay due to a defective original Form No.10.The respondent authority rejected the petitioner's application to condone the delay in submitting Form No.10, citing the original form's defectiveness as the reason. The authority did not consider the rectified Form No.10 filed by the petitioner before the impugned order was passed. This failure to consider the rectified form led to the petitioner's dissatisfaction and the subsequent filing of the Special Civil Application under Article 226.Issue 4: Failure of the respondent authority to consider the rectified Form No.10.The High Court observed that the respondent authority did not consider the rectified Form No.10, which was filed by the petitioner before the impugned order. The Court held that the authority was required to consider the rectified form in accordance with the law. Therefore, the matter was remanded to the respondent authority to reconsider the application and the claim under Section 11(2) of the Act by dealing with the rectified Form No.10.Issue 5: Remand of the matter to the respondent authority for fresh consideration.The High Court quashed and set aside the impugned order solely on the ground that the respondent authority failed to consider the rectified Form No.10. The matter was remanded to the appropriate authority to reevaluate the petitioner's application in accordance with the law and by considering the rectified form. The Court clarified that it did not express any opinion on whether the rectified form was permissible or not, leaving it to the authority to determine the consequences of filing the rectified Form No.10.In conclusion, the High Court's judgment focused on the failure of the respondent authority to consider the rectified Form No.10, leading to the quashing of the impugned order and the remand of the matter for fresh consideration. The Court emphasized the importance of following due process and considering all relevant documents in such cases involving delay and defective forms in tax matters.