Condonation of delay in filing audit report: 31 day delay condoned where preponement and pandemic caused bona fide lapse.

Condonation of delay in filing Form No.10B for AY 2020-21 under discretionary power was granted where a 31 day delay resulted from a statutory preponement of the audit-report due date and COVID 19 disruptions; the petitioner filed the return on 15 February 2021 and offered a bona fide explanation. Authorities and precedents favour a liberal, justice oriented exercise of discretion for short delays where denial causes substantial prejudice. Reliance was placed on administrative guidance limiting certain late applications to a central authority but noting an alternative remedy. Outcome: the impugned refusal dated 27 February 2025 was quashed and the return to be reprocessed treating Form 10B as filed in time.

---

---

Issues: Whether the delay of 31 days in filing Form No.10B for Assessment Year 2020-21 should be condoned under Section 119(2)(b) of the Income-tax Act, 1961, thereby setting aside the CIT (Exemptions) order dated 27th February 2025 refusing condonation.

Analysis: The petitioner filed the return and Form No.10B on 15th February 2021 but the due date for filing the audit report had been preponed for AY 2020-21 resulting in a 31 days delay. The petitioner attributed the delay to inadvertent non-notice of the changed due date and to disruptions caused by the COVID-19 lockdowns. The respondent relied on CBDT Circular No.16/2024 (18.11.2024) and contended that applications beyond three years must be filed before the CBDT, but clarified that the petitioner would have a remedy before the CBDT. Precedents and principles relevant to Section 119(2)(b) support a liberal, justice-oriented exercise of discretion where delays are short, explanations are bona fide, and denial would cause genuine hardship. The facts show a short delay, an honest explanation tied to a change in the statutory timetable and pandemic-related disruptions, and a substantial financial prejudice to the petitioner if relief is denied.

Conclusion: The delay of 31 days in filing Form No.10B for AY 2020-21 is condoned; the impugned order dated 27th February 2025 is quashed and set aside and the return shall be re-processed treating Form No.10B as filed within time, in favour of the assessee.

---