Bona fide delay in Form 10B filing condoned; procedural lapse could not defeat charitable exemption claims.

A bona fide 16-day delay in uploading Form 10B audit report was condoned under Section 119(2)(b) because the report already existed and the lapse was only procedural. The High Court held that the tax authority had to take an objective, hardship-removing approach and could not refuse relief by mechanically repeating an earlier rejection. The belated filing was treated as a curable error of form, so the Form 10B was directed to be treated as filed with the return and the consequential denial of exemption, demand, and rectified intimations were set aside in favour of the charitable trust.

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Issues: Whether the 16-day delay in filing/uploading Form 10B audit report was liable to be condoned under Section 119(2)(b) of the Income-tax Act, 1961, and whether the intimation under Section 143(1) of the Income-tax Act, 1961, the rectified intimation under Section 154 of the Income-tax Act, 1961, and the refusal to condone delay were liable to be set aside.

Analysis: The petitioner was a charitable religious trust claiming exemption under Sections 11 to 13 of the Income-tax Act, 1961. The audit report in Form 10B was available but was uploaded belatedly by 16 days due to inadvertence. The refusal to condone the delay had already been found unsustainable in the earlier round, and the fresh rejection merely reproduced the earlier order without objective reconsideration. The delay was held to be bona fide and the omission was treated as an error of form, not substance. The authority under Section 119(2)(b) of the Income-tax Act, 1961 was required to adopt an objective approach to remove hardship and not to defeat exemption on such a trivial lapse.

Conclusion: The delay was condoned, the Form 10B was directed to be treated as filed along with the return, and the rejection of exemption and consequential demand were set aside in favour of the assessee.

Final Conclusion: The petitioner obtained complete relief against the tax demand and the impugned administrative orders were quashed, resulting in restoration of the claimed exemption position.

Ratio Decidendi: A bona fide and minor delay in furnishing a statutory audit report, when the report existed and the lapse is merely procedural or formal, may be condoned under Section 119(2)(b) of the Income-tax Act, 1961 to avoid undue hardship, and consequential denial of exemption cannot be sustained.

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