Condonation of delay in Form 10B filing treated as procedural where explanation was bona fide and audit report was already on record.

A short delay in filing Form No. 10B for exemption under Section 11 of the Income-tax Act was considered capable of condonation under Section 119(2)(b) where the explanation was supported by the accountant's illness, the factual basis was not disputed, and the audit report was already on record. The filing requirement was treated as procedural, and the condonation power was expected to be exercised in a justice-oriented manner rather than pedantically. On that reasoning, refusal to condone the delay was unsustainable and the assessee remained entitled to the Section 11 exemption.

---

---

Issues: Whether the delay of 29 days in filing Form No. 10B for claiming exemption under Section 11 of the Income-tax Act, 1961 ought to have been condoned under Section 119(2)(b) of the Income-tax Act, 1961.

Analysis: The delay in filing Form No. 10B was short and was supported by an explanation founded on the illness of the accountant responsible for maintaining the records and coordinating the audit process. The factual basis offered for the delay was not disputed by the Revenue. The audit report was already on record when the return was processed, and the denial of exemption would cause substantial hardship despite the absence of any wilful default or attempt to evade tax. In such circumstances, the requirement of timely filing of the audit report was treated as procedural, and the authority was expected to adopt a justice-oriented rather than a pedantic approach while exercising the power to condone delay.

Conclusion: The delay ought to have been condoned and the refusal to condone it was unsustainable. The Petitioner was entitled to the benefit of exemption under Section 11.

---