Section 12A exempt establishment wins delay condonation for Form 10B filing after 25 years of operations

Telangana HC allowed petition challenging rejection of application under Section 119(2)(b) for condonation of delay in filing Form 10B. Petitioner, a Section 12A exempt establishment operating for 25 years, faced delays of 161 days (AY 2018-19) and 3 days (AY 2020-21) in submitting Form 10B. Court found the impugned order failed to consider petitioner's explanation or provide specific findings on reasonableness of cause for delay. Noting CBDT circular authorizing Commissioners to entertain such applications liberally for delays under 365 days, HC set aside the order, condoned the delay, and remitted matter back for decision on merits.

---

---

Issues Involved:
1. Rejection of application u/s 119(2)(b) of the Income Tax Act, 1961.
2. Delay in submission of Form 10B for Assessment Years 2018-19 and 2020-21.
3. Non-consideration of explanations provided by the petitioner.
4. Applicability of CBDT Circular No. 2/2020.

Summary:

Issue 1: Rejection of application u/s 119(2)(b) of the Income Tax Act, 1961
The petitioner challenged the order dated 12.01.2024 by the 1st respondent, which rejected their application u/s 119(2)(b) of the Income Tax Act, 1961, seeking condonation of delay in filing Form 10B.

Issue 2: Delay in submission of Form 10B for Assessment Years 2018-19 and 2020-21
The petitioner, a non-profit society exempted u/s 12A of the Act, faced delays in submitting Form 10B for AY 2018-19 (161 days) and AY 2020-21 (3 days). The delays were attributed to the Chartered Accountant's office and professional pressures due to Covid-19, respectively.

Issue 3: Non-consideration of explanations provided by the petitioner
The petitioner argued that the impugned order was mechanical and lacked discussion on the explanations provided for the delays. The petitioner cited CBDT Circular No. 2/2020, which allows condonation of delays up to 365 days, a point not addressed by the 1st respondent.

Issue 4: Applicability of CBDT Circular No. 2/2020
The court noted that the CBDT Circular No. 2/2020 empowers Commissioners of Income Tax to condone delays up to 365 days in filing Form 10B. The impugned order failed to consider this circular and the explanations provided by the petitioner.

Judgment:
The court found that the impugned order did not discuss the explanations provided by the petitioner and failed to consider the CBDT Circular No. 2/2020. The court referenced a similar case, M/s. Shilparamam Arts, Crafts and Cultural Society, where the delay was condoned. The court set aside the impugned order, condoned the delay, and remitted the matter back to the 1st respondent for a decision on merits. The writ petition was allowed, and no costs were ordered.

---