Marginal delay in Form 10B filing may be condoned where exemption eligibility is otherwise established and procedural lapse is bona fide.

Marginal, bona fide delay in filing Form 10B may be condoned under section 119(2)(b) where the assessee is otherwise eligible for exemption under sections 11 and 12 and the delay arose in the first year of charitable registration. The note emphasises that a procedural lapse, by itself, should not defeat exemption benefits when the return has already been filed and the governing condonation framework supports relief. It also notes that delayed recourse to the tax authorities after prior intimation may justify an equitable condition while granting condonation and preserving the exemption claim.

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Issues: Whether the delay in filing Form 10B for the assessment year 2020-2021 should be condoned and the rejection order under section 119(2)(b) of the Income-tax Act, 1961 should be interfered with.

Analysis: The application for condonation was considered in the context of the binding circular governing such requests, the petitioner's registration under section 12AA of the Income-tax Act, 1961, and the fact that the delay in filing Form 10B was only marginal and arose in the first year of registration. The order also noted that the return had already been filed and that denial of the benefit of sections 11 and 12 of the Income-tax Act, 1961 merely for a procedural lapse would be unwarranted. At the same time, the delayed approach to the authorities after prior intimation under section 143(1) of the Income-tax Act, 1961 justified an equitable condition while granting relief.

Conclusion: The delay was directed to be condoned, the rejection order was liable to be quashed on compliance with the imposed condition, and fresh intimation under section 143(1) of the Income-tax Act, 1961 was to be issued thereafter.

Final Conclusion: Relief was granted in part by restoring the petitioner's entitlement to seek the exemption benefit, while subjecting that relief to a monetary condition.

Ratio Decidendi: A marginal and bona fide procedural delay in filing Form 10B, especially in the first year of charitable registration, should not by itself defeat exemption benefits where the assessee is otherwise eligible and the governing condonation framework supports relief.

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