Parshwanath bhakti vihar jain trust Vs CIT (Gujarat High Court)
Gujarat High Court recently delivered a significant judgment in the case of Parshwanath Bhakti Vihar Jain Trust versus the Commissioner of Income Tax (CIT). The Court quashed an order dated December 21, 2021, passed under Section 119(2)(b) of the Income Tax Act, 1961, which had rejected the trust’s application to condone a delay in filing Form No. 10B for Assessment Year 2018-19. The High Court emphasized a judicious and equitable approach in dealing with procedural delays, particularly for public charitable trusts.
Case Background
Parshwanath Bhakti Vihar Jain Trust is a public charitable trust, established in 1974 and registered under both the Bombay Public Trust Act, 1950 (as applicable in Gujarat) and Section 12A(a) of the Income Tax Act since 1976. The trust primarily engages in public charitable and religious activities, deriving income from voluntary contributions and corpus donations.
For the Assessment Year 2018-19, the trust filed its return of income on September 26, 2018, declaring a total income of Rs. Nil. In this return, it claimed exemptions under Section 11 of the Act, totaling Rs. 3,69,08,845/-, against voluntary contributions and corpus donations.
The Centralized Processing Centre (CPC), Bengaluru, initially processed this return under Section 143(1) on October 17, 2019. However, the CPC rejected the claimed exemptions, assessing the total income at Rs. 3,26,61,664/- and raising a demand of Rs. 1,34,40,907/-. The reason for this rejection was the trust’s failure to file Form No. 10B within the stipulated due date. Form 10B is an audit report mandatory for trusts and institutions claiming exemption under Sections 11 and 12 of the Act.
