Mahavatar Babaji Charitable Trust Vs CIT (Madras High Court)
Summary: The Madras High Court considered a writ petition challenging the order dated 22.03.2025 rejecting M/S.Mahavatar Babaji Charitable Trust’s application for condonation of delay under Section 119(2)(b) of the Income-tax Act, 1961. The application concerned a one-day delay in filing the audit report in Form 10B for Assessment Year 2020-2021.
The petitioner submitted that Form 10B had been filed on 16.01.2021 with a delay of one day and that the return of income had been filed on 13.02.2021. The delay was attributed to the COVID-19 pandemic. The petitioner contended that the impugned order had rejected condonation by relying upon Circular No.16/2024. Reliance was also placed on the Madras High Court’s earlier order dated 03.07.2026 in John and Marie Almeida Educational Trust v. The Commissioner of Income-Tax (Exemptions), W.P. Nos.15587 and 16818 of 2025, where the Court held that clause (b) of Section 119(2) does not prescribe a time limit for making an application for condonation.
The Revenue submitted that the application had been filed beyond the time limits specified in Circular No.16/2024 and that condonation was therefore not possible.
The Court noted that the petitioner was a Charitable Trust and that exemptions had been claimed for the relevant assessment year. The audit report had been filed with only a one-day delay during the COVID-19 period. The Court found that the sole reason for rejecting the application was the time limit prescribed in Circular No.16/2024.
The Court held that the statute itself does not prescribe a time limit. The preliminary consideration under Section 119(2)(b) is whether genuine hardship would be caused to the assessee. Since entitlement to the exemptions was contingent upon filing the return of income along with the audit report in Form 10B, the Court found that the petitioner would suffer genuine hardship from the one-day delay in filing the audit report. It consequently concluded that the delay was liable to be condoned.
The impugned order was set aside and the respondents were directed to proceed further on the basis of the Court’s order. The writ petition was disposed of accordingly; the connected miscellaneous petitions were closed and there was no order as to costs.
The judgment is consistent with the TaxGuru-reported Madras High Court approach in John And Marie Almeida Educational Trust, where the Court considered the absence of a statutory time limit under Section 119(2)(b).
Cases Discussed
- John and Marie Almeida Educational Trust v. The Commissioner of Income-Tax (Exemptions), Madras High Court, W.P. Nos.15587 and 16818 of 2025 — cited regarding the absence of a statutory time limit under Section 119(2)(b).
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Order dated 22.03.2025 rejecting the petitioner’s application to condone delay under Section 119(2)(b) of the Income-Tax Act, 1961 is challenged in this writ petition.
2. Learned counsel for the petitioner submits that the audit report in Form 10B was filed by the petitioner on 16.01.2021 with a delay of one day and return of income for said year was filed on 13.02.2021. He also submits that the delay was occasioned on account of the COVID -19 pandemic. Referring to the impugned order, he submits that the petitioner’s request for condonation of delay was rejected by relying on Circular No.16/2024. Citing an earlier order of this order dated 03.07.2026 in John and Marie Almeida Educational Trust v. The Commissioner of Income-Tax (Exemptions) in W.P.No.15587 and 16818 of 2025, learned counsel submits that this Court held that clause (b) of subsection (2) of Section 119 does not prescribe a time limit within which an application for condonation should be made.
3. Mr.V.J.Arulraj, learned senior standing counsel, appears on behalf of the respondents. He submits that the application was filed beyond the time limits specified in Circular No.16/2024 and that it was not possible to condone delay on that account.
4. The petitioner is a Charitable Trust. Exemptions were claimed in relation to the relevant assessment year. The audit report was filed with a delay of one day during the COVID-19 period. The only ground on which the application was rejected was the time limit prescribed in Circular No.16/2024.
The statute does not prescribe a time limit. The preliminary consideration under the statute is whether genuine hardship would be caused to the assessee. Since the right to avail of exemptions is contingent on the filing of return of income along with audit report in Form 10B, there is no doubt that the petitioner would suffer genuine hardship for the delay of one day in filing of the audit report.
Considering all these aspects, I am satisfied that the delay is liable to be condoned. Consequently, the impugned order is set aside and the respondents are directed to proceed further on the basis of this order.
5. The writ petition is disposed of on the above terms. Consequently, connected miscellaneous petitions are closed. No costs.
