Condonation of delayed Form No. 10 filing protects charitable income exemption where reasonable cause and prescribed investments exist.

Belated filing of Form No. 10 for accumulation of charitable income for Assessment Year 2016-17 may be condoned where reasonable cause exists and the accumulated amount was invested in prescribed modes. Circular No. 7/2018 permitted Commissioners to consider delayed filings for that first year of electronic filing. The note states that investment in eligible term deposits and the genuine hardship caused by refusal supported condonation. The power under Section 119(2)(b) should advance substantial justice after considering whether the delay was deliberate or unexplained, thereby enabling exemption for accumulated income under Section 11.

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Issues: Whether delay in filing Form No. 10 for accumulation of charitable income for Assessment Year 2016-17 should be condoned.

Analysis: Circular No. 7/2018 specifically authorised Commissioners to entertain belated Forms No. 10 for Assessment Year 2016-17, being the first year of electronic filing, upon satisfaction of reasonable cause and that the accumulated amount was invested in the prescribed modes. The petitioner had invested the surplus in term deposits falling within the permitted modes. Refusal to condone the delay would cause genuine hardship by denying exemption despite a meritorious claim. The power under Section 119(2)(b) is to be exercised to achieve substantial justice, while considering the reasons for delay and whether it was deliberate or unexplained.

Conclusion: The delay in filing Form No. 10 must be condoned, enabling the petitioner to claim exemption for the accumulated income under Section 11.

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