Sivestar Educational Trust Vs CIT (Exemption) (Madras High Court)
Madras High Court in Sivestar Educational Trust vs Commissioner of Income Tax (Exemption) held that legitimate tax exemption to a registered charitable trust cannot be denied merely due to delay in filing the audit report in Form 10B. The Court quashed the order of the Commissioner of Income Tax (Exemption) [CIT(E)] rejecting condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, and allowed the writ petition, subject to payment of Rs.25,000 to the Blue Cross of India.
The petitioner, Sivestar Educational Trust, registered under Section 12A of the Income Tax Act on 30 March 2017, was required to file its return of income and the prescribed audit report in Form 10B under Section 44AB for the Assessment Year (AY) 2018–19. While the due date for filing Form 10B was initially 30 September 2018 and later extended to 31 October 2018, the Trust filed the same on 31 March 2019 along with its income tax return, resulting in a delay of 151 days. An intimation under Section 143(1) was issued on 17 October 2019 finalizing the return filed on 31 March 2019.
Subsequently, the petitioner filed an application before the CIT(E) under Section 119(2)(b) seeking condonation of delay in filing Form 10B, explaining that the delay was due to the impact of “Gaja Cyclone” in November 2018. The CIT(E), through order dated 28 November 2024, rejected the condonation application. The order referred to CBDT Circular No. 2/2020 dated 3 January 2020, which authorizes Commissioners to condone delay up to 365 days if the assessee demonstrates reasonable cause. However, after analyzing the case facts, the CIT(E) concluded that the petitioner failed to prove reasonable cause.
