Kotak Family Foundation Vs CIT (Exemption) & Others (Bombay High Court)
In a significant ruling for charitable organizations, the Delhi High Court has quashed an order by the Commissioner of Income Tax (Exemption), Mumbai, which had denied the Kotak Family Foundation its tax exemption for the Assessment Year 2021-22 due to a delay in e-verifying an audit report. The court emphasized a “justice-oriented approach,” holding that genuine hardship caused by a technical lapse, especially during the Covid-19 pandemic, warranted condonation of delay.
The case, Kotak Family Foundation Vs. CIT (Exemption) & Others, centered on the petitioner, a Public Charitable Trust established in May 2017, which had duly received approvals under Sections 12A/12AA and 80G of the Income Tax Act, 1961. For the Assessment Year 2021-22, the trust had filed its income tax return on December 30, 2021, well within the extended due date of February 15, 2022, a concession granted by the Central Board of Direct Taxes (CBDT) due to the Covid-19 pandemic.
Further demonstrating its compliance, the trust had electronically filed Form 9A on December 22, 2021, exercising its option under Section 11(1) of the IT Act to accumulate 85% of its income for future charitable purposes. Crucially, its accounts were audited, and the audit report in Form 10B was uploaded online by the auditor on December 29, 2021 – a day before the income tax return was filed.
