2025 (1) TMI 1129 - HC - Income Tax

High Court Allows 15-Day Delay for Form-10B Filing Due to Covid Disruptions and Construction Issues for AY 2022-23.

The HC condoned a 15-day delay in filing Form-10B for the Assessment Year 2022-23 under the Income Tax Act, 1961. The court found that the Petitioner's ... Refusal to condone a 15-day delay in filing Form-10B on the ground that no sufficient cause was shown - HELD THAT:- There is no serious denying that the reconstruction and redevelopment of the trust premises have been going on since 2018. Necessary approvals are on record. There is a reference to the intervening Covid pandemic. If, for all these reasons, there was some disruption in the normal functioning of the trust office, entailing a marginal delay of 15 days in filing Form-10B, a case of sufficient cause was made out. The reason is neither frivolous nor can it be said to be some excuse to derive some undue benefits. Even assuming that each day’s delay must be explained, considering the delay is only 15 days and the cause shown is eminently acceptable, the impugned order warrants interference. Thus, condone the delay of 15 days in filing Form-10B of the IT Act. 1. ISSUES PRESENTED and CONSIDEREDThe core legal question presented in this judgment is whether the 15-day delay in filing Form-10B under the Income Tax Act, 1961, for the Assessment Year 2022-23, should be condoned based on the reasons provided by the Petitioner.2. ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework revolves around the provisions of the Income Tax Act, 1961, particularly concerning the filing of Form-10B, which is mandatory for certain trusts to claim tax exemptions. The case also references the principle that every day's delay must be explained, as highlighted in the cited precedent of Ranka & others Vs. Rewa Coalfields Ltd.Court's Interpretation and ReasoningThe court interpreted the requirement for condoning delay by considering whether the reasons provided by the Petitioner constituted a 'sufficient cause.' The court acknowledged the ongoing reconstruction and redevelopment of the trust premises since 2018 and the disruptions caused by the Covid pandemic as legitimate reasons for the delay.Key Evidence and FindingsThe court found that the Petitioner provided sufficient evidence, including necessary approvals and commencement certificates, to substantiate the claim of ongoing construction activities. This evidence supported the Petitioner's argument that the delay was not due to negligence or an attempt to gain undue advantage.Application of Law to FactsThe court applied the legal principle that, while every day's delay needs to be explained, a liberal approach can be adopted when the delay is marginal and the cause shown is not mala fide. The court concluded that the 15-day delay was justified given the circumstances presented by the Petitioner.Treatment of Competing ArgumentsThe Respondents argued that the trust, being an established entity, should have been aware of the filing timelines and that the reasons provided did not constitute sufficient cause. The court, however, found this argument unpersuasive, noting that the ongoing construction and pandemic-related disruptions were valid reasons for the delay.ConclusionsThe court concluded that the reasons provided by the Petitioner constituted a sufficient cause for the delay and that the impugned order refusing to condone the delay was improper. The delay was therefore condoned.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning'In most matters involving condonation of delay, some lapse on the part of the party seeking indulgence is quite normal. However, that by itself, cannot be a ground for refusing to exercise discretion.'Core Principles EstablishedThe judgment establishes that a liberal approach can be adopted in condoning delays when the delay is marginal, the cause shown is not mala fide, and no undue advantage has been gained.Final Determinations on Each IssueThe court set aside the impugned order and condoned the 15-day delay in filing Form-10B, allowing the Petitioner to proceed with the necessary steps regarding the impugned intimation.The rule was made absolute, and no costs were awarded.