Court invalidates tax demands for charitable trust citing procedural errors and pandemic-related delays

The court set aside the Impugned Intimation Notice and Demand Order under Section 143(1) of the Income Tax Act for Assessment Years 2020-2021 and 2021-2022 due to procedural irregularities. The court acknowledged delays in filing returns caused by the Covid-19 pandemic and other factors, deeming them non-willful. The petitioner, an Educational Charitable Trust, was granted the benefit of Section 11 and directed to obtain suitable condonation for the delay in filing Form 10B. The case was remanded back to the respondents for a fresh order within 60 days.

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Issues involved: Challenge to Impugned Intimation Notice and Demand Order under Section 143(1) of the Income Tax Act for Assessment Years 2020-2021 and 2021-2022.

Judgment Summary:

Issue 1: Compliance with notice requirements under Section 143(1)
The petitioner, an Educational Charitable Trust, challenged the Impugned Intimation Notice and Demand Order, arguing that the 30-day notice requirement under proviso to Section 143(1) was not met by the Department. The petitioner cited delays in filing returns due to Covid-19 pandemic, illness, and death of key individuals associated with the Trust, leading to difficulty in accessing the IT Portal for filing Returns. The court acknowledged the procedural irregularity in not issuing the notice but deemed it non-fatal to the proceedings. The court set aside the Impugned Order and remanded the case back to the respondents for a fresh order within 60 days.

Issue 2: Delay in filing Returns and availing exemption under Section 11
The petitioner explained the delays in filing returns, including illness and death of key individuals, and challenges faced in accessing the IT Portal. The petitioner sought condonation of the delay in filing Form 10B under Section 12(1)(b) of the Income Tax Act. The court considered the circumstances, including the impact of Covid-19, and noted that the delays were not willful. The court allowed the benefit of Section 11 for the petitioner and directed them to obtain suitable condonation from the Commissioner for the delay in filing Form 10B.

Conclusion:
The court, after considering arguments from both sides, set aside the Impugned Order due to procedural irregularities and remanded the case for a fresh order. The court emphasized the need for the petitioner to obtain condonation for the delay in filing Form 10B. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed.

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