Late filing of charity tax Forms 10B and 10 after s.143(1) intimation, delay condoned despite 3-year cutoff.
The dominant issue was whether rejection under s. 119(2)(b) of the Income-tax Act, solely on the ground that the condonation application was filed beyond three years from the end of AY 2020-21, was sustainable. The HC held that, absent any challenge to CBDT Circular No. 16/2024, its validity need not be examined, but the authority erred in refusing relief where the delays in filing Form 10B and Form 10 were minor and satisfactorily explained, and where the applicant had bona fide pursued appellate remedies against the s. 143(1) intimation, with delay attributable to age/health constraints of the trustee. The impugned orders were quashed and the delays in filing Forms 10B and 10 were condoned.
1. ISSUES PRESENTED AND CONSIDERED
(i) Whether the delay of 38 days and 69 days, respectively, in filing Form No. 10 and Form No. 10B for the relevant assessment year was liable to be condoned, notwithstanding rejection by the designated authority on the basis that the condonation application was filed beyond three years from the end of that assessment year.
(ii) Whether, in the facts of the case, the Court should decline relief and relegate the applicant to approach the CBDT for condonation, instead of itself granting relief against the impugned rejection orders.
2. ISSUE-WISE DETAILED ANALYSIS
Issue (i): Condonability of delay in filing Form No. 10 and Form No. 10B despite rejection based on the three-year bar stated in the Circular
Legal framework (as discussed in the judgment): The impugned orders were passed under Section 119(2)(b) of the Income Tax Act, 1961, rejecting condonation for delayed filing of Form No. 10 and Form No. 10B by relying on Circular No. 16/2024, which was treated by the authority as imposing a three-year outer limit for entertaining such applications. The Court noted that the Circular's validity was not under challenge and therefore did not examine its validity.
Interpretation and reasoning: The Court confined itself to the limited question whether the delay in filing Form No. 10 and Form No. 10B should be condoned on the facts. It treated the delays as minor (about 38 days and 69 days). The Court accepted the explanation that the default occurred during the COVID-19 period and in a year when the requirement regarding timing of filing the audit report was newly introduced. The Court also gave weight to the fact that the competent authority had already accepted the same explanation for delay in filing the return of income (condoned during pendency of the writ petition), making the explanation for delay in the connected forms credible and consistent. The impugned rejection orders were also found to be solely on "maintainability" based on the three-year restriction, without recording any determination on "sufficient cause" for the delay in the forms.
Conclusions: The Court held that the delay in filing Form No. 10 and Form No. 10B was condonable on the facts and quashed the rejection orders. The Court expressly condoned the delay for both forms and directed consequential re-processing of the return treating the forms as filed within time.
Issue (ii): Whether the applicant should be relegated to the CBDT instead of granting relief
Legal framework (as discussed in the judgment): The revenue contended that the circular's restriction bound field authorities and that the applicant could approach the CBDT for condonation beyond three years. The Court considered this as an alternative course suggested by the revenue.
Interpretation and reasoning: The Court found it inappropriate, on the facts, to send the applicant to the CBDT. It considered the shortness of the delay in the forms, the bona fide explanation rooted in COVID-19 conditions, and the authority's own acceptance of identical reasons for the return's delay. The Court further accepted that the applicant had been bona fidely pursuing appellate remedies regarding the intimation and later filed the condonation application while those proceedings were ongoing; hence, no further deliberation was necessary regarding the timing of the application for condonation itself.
Conclusions: The Court declined to relegate the applicant to the CBDT and instead exercised writ jurisdiction to set aside the impugned orders, condone the delay in the forms, and direct the tax authorities (including the CPC) to re-process the return accordingly within 12 weeks.