Sarvodaya Shikshan Prasarak Mandal Vs ITO (ITAT Pune)
Summary: ITAT Pune allowed the assessee’s appeal for statistical purposes and set aside the appellate order for de-novo adjudication after holding that sufficient cause existed for condoning a delay of 1,679 days. Sarvodaya Shikshan Prasarak Mandal had filed its return for AY 2019-20 on 31.08.2019 under section 139(1). CPC processed the return under section 143(1) on 17.06.2020 and assessed income at Rs.6,14,25,854/- without allowing the expenditure claimed or the exemption claimed by the trust, on the stated ground that the audit report in Form 10B had not been e-filed. The assessee contended that it had filed Form 10BB within the prescribed time and that non-filing or delayed filing of Form 10B was, in any event, procedural.
The Addl./JCIT(A), however, dismissed the appeal in limine because it was filed 1,679 days late. The Tribunal noted that after receiving the section 143(1) order, the assessee pursued rectification and subsequently raised grievances on the Income Tax Portal on 26.12.2024 and 12.01.2025. It also took account of the Covid pandemic period and the Supreme Court’s extension of limitation, and concluded that sufficient cause for delay existed. On the merits underlying the need for condonation, the Tribunal observed that the assessee received 96% of its grants from Government, had total receipts of Rs.6,14,25,853/- and a surplus of only Rs.6,19,158/-, yet CPC had taxed the entire receipts.
The Tribunal stated that there was no provision under the Income Tax Act permitting entire receipts to be taxed while ignoring expenditure claimed. It further noted that Form 10BB had been filed within the time allowed under section 139(1). The Addl./JCIT(A) was therefore directed to condone the delay, permit filing of necessary documents, provide an opportunity of hearing and decide the appeal afresh on merits.
Cases Discussed
- Indian Association of Parliamentarians on Population & Development Vs. Income Tax Officer, War Exemption-1(2), ITA No. 5202/DEL/2025.
- Income Tax Officer, Mumbai Vs. P K Krishnan Educational Trust, Mumbai on 7 May, 2024.
- Sarvodaya Charitable Trust Vs. ITO (Exemption) (2021) (125 com 75) (Gujarat).
- ACIT, Cir-8, Ahmedabad Vs. Xavier Kelvani Mandal Pvt. Ltd.
- CIT Vs. Shahzedanand Charity Trust (1997) 228 ITR 292 (PH).
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PUNE
1. This is an appeal filed by the assessee against the order of the Learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Hyderabad [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2019-20 on 21.11.2025.
Submission of Ld. AR :
2. The Ld. AR filed paper book containing 105 pages. The Ld. AR filed written submission. The relevant paragraphs of the written submitted are as under :
“37. However, the Ld. CPC, Bengaluru had taxed the entire gross receipts claimed by the appellant trust on the ground that the appellant trust had not filed the Form 10B.
38. Even if Form 10B was not filed, still no provision of law allows the authority to completely tax the receipts without giving due consideration to the expenditures done in regard to the same. Such an act is untenable and not acceptable in the eyes of law.
39.However, it was not appreciated that the appellant trust had filed Form 10BB well within the prescribed time limit and there are various judgments of the various Courts and Tribunals wherein it has been held that non-filing of Form 10B or delay in filing Form 10B is a procedural lapse and that exemption cannot be denied merely on this ground.
40. Rather, it is to submit that there is no procedural lapse in the case of the appellant as the appellant has rightly filed Form 10BB. Your Honour may kindly be pleased to appreciate the fact that 10B form is to be filed in cases where registration is granted u/s 10(23C) from AY 2022-23 onwards, if the receipts were more than Rs. 5 crores as per Rule 16CC and Rule 17B.
41. The case under consideration is of AY 2019-20 and the appellant trust was entitled to file Form 10BB only, which has not been accepted in intimation order passed u/s 143(1) of the IT Act by the CPC, Bengaluru.
42. The relevant extracts from the literature in this regard as available on IT Website is reproduced herewith for your Honour’s kind reference and also attached as an Annexure with this paper book.
“Vide Notification No. 7/2023 (dated 21st February 2023) the Central Board of Direct Taxes (CBDT) has notified new audit reports in Form 10B and Form 10BB to be furnished by a fund or trust or institution or any university or other educational institution or any hospital or other medical institution under section 12A(1) and under tenth proviso to section 10(23C):
➤ Form No. 10B where-
-
- The total income of auditee, without giving effect to the provisions of mentioned clause/section, as applicable-
- sub-clauses (iv), (v), (vi) and (via) of clause 23C of section 10 or Sections 11 and 12 of the Act, exceeds rupees five crores during the previous year, or
- Auditee has received any foreign contribution during the previous year, or
- Auditee has applied any part of its income outside India during the previous year.
➤ Form No. 10BB in other cases.”
2.1 The Ld. AR relied on the following decisions :
i. Indian Association of Parliamentarians on Population & Development Vs. Income Tax Officer, War Exemption-1(2), ITA No. 5202/DEL/2025.
ii. Income Tax Officer, Mumbai Vs. P K Krishnan Educational Trust, Mumbai on 7 May, 2024.
iii. Sarvodaya Charitable Trust Vs. ITO (Exemption) (2021) (125 com 75) (Gujarat).
iv. ACIT, Cir-8, Ahmedabad Vs. Xavier Kelvani Mandal Pvt. Ltd.
v. CIT Vs. Shahzedanand Charity Trust (1997) 228 ITR 292 (PH).
Submission of Ld. DR :
3. The Ld. DR relied on the order of the Assessing Officer (AO) and the Ld. Addl./JCIT(A).
Findings and analysis:
4. We have heard both the parties and perused the record. This is an appeal filed by the assessee against the order of the Ld. Addl./JCIT(A) passed u/s. 250 of the Act for AY 2019-20 on 21.11.2025, emanating from the assessment order u/s 143(1) of the Act dated 17.06.2020. The Ld. Addl./JCIT(A) vide order u/s 250 of the Act has dismissed the appeal of the assessee in limine on account of delay in filing the appeal of 1679 days.
5. In this case, the assessee had filed return of income on 31.08.2019 u/s 139(1) of the Act. The said return was processed by the Centralized Processing Center (CPC) and an order u/s 143(1) of the Act was passed on 17.06.2020 assessing the income of the assessee at Rs.6,14,25,854/- without giving deduction of expenditures claimed by the assessee in the return of income and without granting exemption claimed by the assessee in the return of income. The reason given by the CPC is as under :
“The Trust or Institution registered u/s 12A/12AA has not E-filed the Audit Report in Form 10B on or before filing of the Return of income, hence the exemption claimed in Sr.no. 2 [exemption claimed u/s 11(1)(d)] and Sr.no. 4i to 4viii of Part B-TI is not allowed in accordance with the provisions of Section-12A(1)(b) of the Income tax Act.
PS: Filing of Form 9A
within due date is mandatory if there is claim of deemed application in Sr.no. 4iv of Schedule Part B-TI. Filing of Form 10 and return of income within due date is mandatory if claim of accumulation u/s 11(2) in Sr.no. 4vi of Schedule Part B-TI”
6. Aggrieved by the assessment order u/s 143(1) of the Act, the assessee filed an appeal before the Ld. Addl./JCIT(A) with a delay. The assessee filed elaborate condonation affidavit before the Ld. Addl./JCIT(A). The Ld. Addl./JCIT(A) has reproduced the condonation affidavit in the order. It is observed that after receiving the order u/s 143(1) of the Act, the assessee had filed request for rectification. Since, the assessee had not received any response from the CPC, the assessee raised grievance on Income Tax Portal on 26.12.2024 and on 12.01.2025. Finally, since no response was received, the assessee filed an appeal before the Ld. Addl./JCIT(A). Thus, when we analyse the chronology of events, it is observed that the assessee was pursuing an alternate remedy in the form of rectification application. It is also observed that the period was Covid Pandemic and the Hon’ble Supreme Court has extended the due dates. In these facts and circumstances of the case, we are convinced that there was sufficient cause for delay. Accordingly, we direct the Ld. Addl./JCIT(A) to condone the delay.
7. In this case, it is observed that the assessee had received 96% grants from Government. The assessee’s total receipts were Rs.6,14,25,853/- as per Income & Expenditure Account and surplus was only Rs.6,19,158/-. However, erroneously the CPC has taxed the entire receipts. Under the Income Tax Act, there is no provision where entire receipts can be taxed ignoring expenditure claimed. It is also noted that the assessee had filed audit report in Form No. 10BB within the due time allowed u/s 139(1) of the Act. Therefore, there was no delay on the part of the assessee in filing audit report. In these facts and circumstances of the case, if we do not condone the delay, grave injustice will be caused to the assessee. Therefore, for all the reasons discussed above, we direct the Ld. Addl./JCIT(A) to condone the delay and decide the appeal on merits.
Accordingly, order u/s 250 is set aside to Ld. Addl./JCIT(A) for de-novo adjudication. The Ld. Addl./JCIT(A) shall allow assessee to file all the necessary documents. The Ld. Addl./JCIT(A) shall provide opportunity of hearing to the assessee.
8. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 17th August, 2026
