St. Joseph Educational And Charitable Trust Vs CIT (Exemption) (Kerala High Court)
In a significant ruling, the Kerala High Court set aside an Income Tax order that declined to condone a 25-day delay in filing an audit report (Form 10B) for the assessment year 2021–2022 by the St. Joseph Educational and Charitable Trust, a Section 12A registered charitable organization. While the income tax return was filed on time, the audit report submission was delayed due to challenges arising from the Covid-19 pandemic. The Trust’s application under Section 119(2)(b) of the Income Tax Act, seeking condonation of delay, was rejected by the Commissioner of Income Tax (Exemption), who found no valid justification or supporting documents for the delay.
The High Court criticized the Commissioner’s hyper-technical approach, noting the absence of a reasoned order and the failure to acknowledge the extraordinary pandemic-related circumstances. The Court referenced the Supreme Court’s suo motu decision in Re Cognizance for Extension of Limitation (2021), which had extended limitation periods during the pandemic. The Court emphasized that the recent amendment requiring audit reports to be filed a month before the return date had caused confusion and that the delay was minimal.
The judgment clarified that a liberal and practical approach should have been taken, especially since the delay occurred during an unprecedented health crisis. Highlighting that even the CBDT had extended return filing deadlines, the Court ruled that the refusal to condone the delay was unjustified. Consequently, the High Court allowed the writ petition, set aside the impugned order, and condoned the delay in filing the audit report.
