Sadhu Vasvani Mission Vs CIT (Exemption) (Gujarat High Court)
Form 10 Delay and Section 11 Exemption
The Gujarat High Court allowed the writ petition filed by a charitable trust engaged in running a Higher Secondary school. For FY 2015-16 relevant to AY 2016-17, the trust received Rs.2,33,06,849/- and applied Rs.1,49,17,593/- for charitable purposes. It accumulated the surplus under Section 11(2) for modernization and refurbishment and invested the funds in six term deposits between 23.12.2015 and 29.03.2016, stated to fall within Section 11(5).
The trust did not file Form 10 within the prescribed time, stating that the omission occurred inadvertently. During assessment proceedings, Form 10 was submitted on 10.07.2018. The trust subsequently applied for condonation under Section 119(2)(b), filed Form 10 electronically on 02.01.2019 and furnished investment and banking documents. The application was rejected by order dated 17.09.2019.
Gujarat HC Applies CBDT Circular No. 7/2018
The petitioner relied on CBDT Circular No. 7/2018 dated 20.12.2018, which authorised Commissioners to admit belated Form 10 applications for AY 2016-17 where the assessee was prevented by reasonable cause and the accumulated amount had been invested in modes specified under Section 11(5).
The Court noted that an analogous matter, Special Civil Application No.11105 of 2020, had been allowed by judgment dated 10.07.2026. It found that the respondent was required to consider the genuine hardship arising from refusal to condone the delay, particularly since the surplus had been invested in term deposits.
