Charitable Trust Motilal Gulab Devi Fatehpuria Vs ITO (Exemption) (ITAT Jaipur)
Summary: The Jaipur Bench of the Income Tax Appellate Tribunal considered the appeal of Charitable Trust Moti lal Gulab Devi Fatehpuria for AY 2023-24 against the appellate order dated 24.02.2025 of the Addl./Jt. Commissioner of Income Tax (Appeals)-2, Chandigarh, arising from an intimation under Section 143(1) of the Income Tax Act, 1961. The assessee, a public charitable trust registered under Section 12AB, filed its return in ITR-7 on 05.11.2023 declaring nil income after claiming exemption under Section 11. For the first year of the changeover in the applicable audit report for AY 2023-24, the assessee filed Form 10B on 28.10.2023 instead of Form 10BB. The return was processed on 25.11.2024 and the entire Section 11 exemption was denied for non-filing of Form 10BB, resulting in determination of income at Rs. 8,22,391/- and a tax demand. The first appellate authority dismissed the appeal because Form 10BB had not been furnished within the extended time permitted by CBDT Circular No. 2/2024 dated 05.03.2024, which extended the uploading date to 31.03.2024; the assessee uploaded Form 10BB on 21.12.2024.
Before the Tribunal, the assessee challenged the denial of exemption merely because Form 10B had been uploaded instead of Form 10BB. The Tribunal observed that the issue of late filing of Form 10BB was no more res integra and relied upon the Rajasthan High Court judgment in Khandelwal Vaishya Samaj Charitable Trust -Vs- CIT(E), Civil Writ Petition No. 5829/2020, dated 03.09.2025. The High Court extract reproduced in the order emphasised that a charitable trust should not be denied exemption merely on limitation where the delay is bona fide and the authorities possess discretionary power to condone it.
The reproduced judgment also referred to Manav Seva Samiti v Principal Chief Commissioner of Income Tax, Al Jamia Mohammediyah Education Society vs. Commissioner of Income Tax (Exemptions) Mumbai, Union of India, Sarvodaya Charitable Trust Income Tax Officer (Exemption), and G.V. Infosutions (P) Ltd. v. Dy: CIT on a justice-oriented approach to procedural delay. Respectfully following the jurisdictional High Court, the Tribunal set aside the lower-authority orders and directed allowance of the Section 11 exemption upon proper verification of the belatedly filed Form No. 10BB. The assessee’s appeal was allowed for statistical purposes.
Cases Discussed
- Khandelwal Vaishya Samaj Charitable Trust -Vs- CIT(E), Civil Writ Petition No. 5829/2020, judgment dated 03.09.2025 — followed as the jurisdictional High Court authority on condonation and substantive relief for a charitable trust.
- Manav Seva Samiti v Principal Chief Commissioner of Income Tax — relied upon in the reproduced High Court judgment in support of a judicious approach to delay.
- Al Jamia Mohammediyah Education Society vs. Commissioner of Income Tax (Exemptions) Mumbai, Union of India — reproduced for the approach to delayed Form 10B filing by a charitable trust.
- Sarvodaya Charitable Trust Income Tax Officer (Exemption), MANU/GJ/1687/2020: [2021] 125 taxmann.com 75 (Gujarat) — relied upon for an equitable, balancing and judicious approach.
- G.V. Infosutions (P) Ltd. v. Dy: CIT, [2019] 102 taxmann.com 397/261 Taxman 482 — quoted on bona fide inadvertence and reasonable construction of limitation provisions.
- Indglonal Investment & Finance Ltd. — referred to in the reproduced Delhi High Court observations.
- Shree Jain Swetamber Murtipujak Tapagachha Sangh Vs. Commissioner of Income Tax (Exemption) and Anr. — cited as taking a similar view.
Assessee Represented by : Shri Devang Gargieya & Shri Hemang Gargieya, Adv.
FULL TEXT OF THE ORDER OF ITAT JAIPUR BENCH
1. This appeal is filed by the assessee as against the appellate order dated 24.02.2025 passed by Addl./Jt. Commissioner of Income Tax (Appeals)-2, Chandigarh, arising out of the intimation passed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2023-24.
2. The brief facts of the case are that the assessee is a public charitable trust registered u/s.12AB of the Act and filed its return of income for the Assessment Year 2023-24 in ITR-7 on 05.11.2023 declaring ‘Nil’ income after claiming exemption u/s. 11 of the Act. The assessee filed audit report in Form 10B on 28.10.2023 instead of the newly applicable Form 10BB being the very first year of the changeover in the audit-report applicable for the present Asst. Year 2023-24. The return was processed u/s. 143(1) of the Act vide intimation dated 25.11.2024 and denied the entire exemption u/s. 11 of the Act for not filing Form 10BB and determined the income at Rs. 8,22,391/- and demanded tax thereon.
3. Aggrieved against the above intimation, the assessee filed an appeal before Addl. /Jt. CIT(A) who dismissed the appeal of the assessee on the ground that assessee failed to file Form 10BB as per CBDT Circular No. 2/2024 dated 05.03.2024 which had extended the date for uploading the Form 10BB up to 31.03.2024. Whereas the assessee had uploaded the Form 10BB on 21.12.2024.
4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following grounds of appeal:-
1. The impugned order passed on dated 24.02.2025 u/s 250 to the order of the CIT(A)/NFAC is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.
2. The Ld. CIT(A)/NFAC erred in law as well as in the present case in confirming the denial of the exemption claimed u/s 11 merely on wrong uploading of the Audit report and Form 10B instead of 10BB. The denial of exemption claimed u/s 11 by the CPC and confirmation thereof by the Ld. CIT(A)/NFAC is completely contrary to the quinces of law and the facts of the case and hence, the authorities may kindly be directed to allow relief u/s 11.
3. The appellant prays your honour to add, amend or alter any of the grounds of the appeal on or before the date of hearing.
5. Heard rival submissions and perused the materials available on record including the paper book filed by the assessee. The issue of late filing of Form 10BB is no more res integra since various Benches of the Tribunal held in favour of the assessee. Recently the Hon’ble Jurisdictional High Court in the case of Khandelwal Vaishya Samaj Charitable Trust -Vs- CIT(E) in Civil Writ Petition No. 5829/2020 vide judgment dated 03.09.2025 held as follows:-
“13. There is no lack of bona fide imputable to petitioner. That apart, in the present case, the delay was caused due to the fact that staff of CA Firm met with an accident which is beyond control. Therefore, the delay was not deliberate and cannot be attributed to petitioner. Thus, we are of the considered opinion that the application for condonation of delay dated 14th August 2019 ought to have been allowed. Due to bona fide inaction on part of the professional engaged (CA Firm), petitioner cannot be made to suffer.
14. Even otherwise, it is also pertinent to mention that an affidavit explaining the reasons for delay in uploading/e-filing of Form 10B was filed along with the writ petition as Annexure-P/5, which was not controverted by respondent. In M. Kalappa Sethi v. M. V. Laxmi Narain Rao², it was held that an uncontroverted affidavit shall be taken as an affidavit on fact. Therefore, this Court is left with no option but to accept the averments of the affidavit (Annexure-P/5) to be true.
15. The fact that there was any mala fide intention in uploading/e-filing Form 10B belatedly is not alleged in impugned order. The fact that petitioner is a charitable trust, is also not denied. Looking at the charitable activities itself, in our view, delay condonation application should have been allowed. Courts have repeatedly held that such approach in the cases of present type should be equitious, balancing and judicious. Even though technically and strictly and liberally speaking, respondent might be justified in rejecting application but the assessee, a public charitable trust, with so many years of charitable activities, which otherwise satisfies the condition for availing such exemption should not be denied the same merely due on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned.
16. We find support for this view of ours in the judgment of Co-ordinate Bench of this Court at Principal Seat, Jodhpur in the matter of Manav Seva Samiti v Principal Chief Commissioner of Income Tax³ and judgment of Bombay High Court in Al Jamia Mohammediyah Education Society vs. Commissioner of Income Tax (Exemptions) Mumbai, Union of India which were authored by one of us (the Chief Justice) where paragraph 6 reads as under:
“6. Admittedly, Petitioner is a charitable trust. Admittedly, Petitioner has been filing its returns and Form 10B for AY 2015-16, for AY 2017-18 to AY 2021-22 within the due dates. On this ground alone, in our view, delay condonation application should have been allowed because the failure to file returns for AY 2016-17 could be only due to human error. Even in the impugned order, there is no allegation of malafide. As held by the Gujarat High Court in Sarvodaya Charitable Trust Income Tax Officer (Exemption) MANU/GJ/1687/2020: [2021] 125 taxmann.com 75 (Gujarat), the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, Respondent No.1 might be justified in denying the exemption by rejecting such condonation application, but an assessee, a public charitable trust with almost over thirty years, which otherwise satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. Paragraphs 30 and 31 of Sarvodaya Charitable Trust (Supra) reads as under:
“30. We may also refer to and rely upon a decision of the Delhi High Court in the case of G.V. Infosutions (P) Ltd. v. Dy: CIT [2019] 102 taxmann.com 397/261 Taxman 482. We may quote the relevant observations thus:
“8. The rejection of the petitioner’s application under section 119(2)(b) is only on the ground that according to the Chief Commissioner’s opinion the plea of omission by the auditor was not substantiated. This court has difficulty to understand what more plea or proof any assessee could have brought on record, to substantiate the inadvertence of its advisor. The net result of the impugned order is in effect that the petitioner’s claim of inadvertent mistake is sought to be characterised as not bona fide. The court is of the opinion that an assessee has to take leave of its senses if it deliberately wishes to forego a substantial amount as the assessee is ascribed to have in the circumstances of this case. “Bona fide” is to be understood in the context of the circumstance of any case. Beyond a plea of the sort the petitioner raises (concededly belatedly), there can not necessarily be independent proof or material to establish that the auditor in fact acted without diligence. The petitioner did not urge any other grounds such as illness of someone etc., which could reasonably have been substantiated by independent material. In the circumstances of the case, the petitioner, in our opinion; was able to show bona fide reasons why the refund claim could not be made in time.
9. The statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the concerned authorities- including Revenue Authorities have to construe them in a reasonable manner. That was the effect and purport of this court’s decision in Indglonal Investment & Finance Ltd. (supra). This court is of the opinion that a similar approach is to be adopted in the circumstances of the case.”
31. Having given our due consideration to all the relevant aspects of the matter, we are of the view that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, the respondent no. 2 might be justified in denying the exemption under section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 years who substantially satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned.”
17. In our view also, it does not appear that assessee petitioner was lethargic or lacked bona fide in making claim beyond the period of limitation. In fact, we do not understand why would any party, who is entitled to claim, would intentionally delay in uploading the required documents.
18. A similar view was taken in Shree Jain Swetamber Murtipujak Tapagachha Sangh Vs. Commissioner of Income Tax (Exemption) and Anr.5
19. In our view, therefore, petition has to be allowed. We hereby condone delay. Rule made absolute in terms of prayer clause (a) and (b), which reads as under:
a) The application filed by the Petitioner-trust on dated 14.08.2019 (“Annexure-P/8”) before Respondent No. 1 for condoning the delay be allowed and the impugned order u/s 119(2)(b) passed by the Respondent No. 1 on dated 11.09.2019 (“Annexure-P/9”) be quashed and set aside.
b) That the Respondent No. 2 be directed to allow benefit of Section 11 & 12 of the Act to the Petitioner-trust.
20. Petition disposed.”
6. Respectfully following the above judgment of the Hon’ble Jurisdictional High Court, we have no hesitation in setting aside the order passed by the lower authorities with the direction to allow the exemption u/s. 11 of the Act by properly verification of Form No. 10BB filed by the assessee belatedly.
7. In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.
Order pronounced in the open court on 25-08-2026
