Social Security Scheme of Gicea Vs CIT (Exemptions) (Gujarat High Court)
Gujarat High Court ruled in favor of Social Security Scheme of Gujarat Institute of Civil Engineers and Architects, a registered charitable trust, allowing the condonation of delay in filing Form 10B for the assessment year 2016-17. The petitioner had obtained the audit report on time but failed to upload it with the income tax return, leading to a demand of ₹16,39,950 due to the denial of exemption under Section 11 of the Income Tax Act, 1961. Despite filing a rectification request under Section 154 and later applying for condonation of delay under Section 119(2)(b), both were rejected by the tax authorities. The trust argued that the delay was inadvertent, and as per CBDT Circular No. 10/2019, the Commissioner of Income Tax (Exemptions) had the discretion to condone such procedural lapses.
The High Court found that the tax authorities had taken an overly rigid approach by denying the exemption based solely on late filing, despite the trust’s long-standing compliance history. Citing the precedent set in Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), the court emphasized that procedural lapses should not deprive an eligible trust of tax benefits. The court quashed the orders rejecting condonation and directed the authorities to process the return, allowing scrutiny under Section 143(1) or 143(2). The petition was allowed, affirming the principle that procedural delays should not override substantive compliance for charitable organizations.
