KSB Care Charitable Trust Vs CIT (Exemption) (Bombay High Court)
Bombay High Court held that delay in filing of Form No. 10 was condoned since activities of trust are genuine and denial of benefit of accumulation u/s. due to delay in Form No. 10 would cause genuine hardship.
Facts- The present Writ Petition challenges the impugned order dated 24th April 2025 passed by Respondent No.1 for A.Y. 2016-17 under Section 119(2)(b) of the Income-tax Act, 1961 rejecting the Petitioner’s application dated 16th October 2023 for condonation of delay in filing Form No. 10. Respondent No. 1 has, by the impugned order, refused to condone the delay of 2154 days in filing Form No.10. Consequently, the accumulation claimed by the Petitioner under Section 11(2) of the Act has been denied to the Petitioner.
Conclusion- Held that admittedly, A.Y. 2016-17 was the first year wherein the Form No.10 was to be filed electronically. Hence, the possibility of the Petitioner having faced technical glitches while filing the requisite forms cannot be ruled out. This is precisely why the CBDT had issued Circular No. 3/2020 dated 3rd January 2020 for empowering the Commissioners of Income Tax to decide the applications for condonation of delay in filing Form Nos. 9A and 10. In the present matter, the Petitioner has filed Form No.9A within time instead of filing Form No.10, due to which the claim of accumulation was denied under Section 11(2) of the Act. The benefit of accumulation under Section 11(2) of the Act ought not to be denied to the Petitioner when the entire accumulated amount has actually been applied to charitable purposes well within the time allowed under the Act, and the activities of the Petitioner trust are genuine. We find that if this delay is not condoned, there will be genuine hardship to the Petitioner, inasmuch as the Petitioner would be saddled with a tax liability of Rs. 48,89,917/- even though it has substantially complied with the requirements of Section 11(2) of the Act.
