Vesava Koli Samaj Shikshan Sanstha Vs ITO (ITAT Mumbai)
Delay in Form 10B Condoned by HC – CPC 143(1) Denial of Sec 11 Exemption Set Aside – Matter Restored for Consequential Relief – ITAT Mumbai
CPC denied exemption u/s 11 & 12 while processing ROI u/s 143(1) due to delay in filing Form 10B and determined income at ₹2.52 Cr. CIT(A) upheld action relying on rejection of condonation application u/s 119(2)(b).
ITAT noted that Hon’ble Bombay HC subsequently quashed rejection order and condoned delay of 181 days holding lapse was inadvertent and technical. Tribunal held that once HC condoned delay, denial of exemption cannot survive. Matter restored to JAO to give effect to HC directions and grant consequential exemption benefits. Assessee appeal allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal filed by the assessee is against the order of CIT(A)-5, Kolkata vide order no. ITBA/APL/S/250/2025-26/1079634343(1), dated 14.08.2025, passed against the intimation by CPC, Bengaluru, u/s. 143(1) of the Income-tax Act (hereinafter referred to as the “Act”), dated 23.11.2021 for Assessment Year 2019-20.
2. Grounds taken by assessee are reproduced as under:
“1. The learned CIT(A) erred in passing the order merely relying on the impugned order passed u/s 119(2)(b) of the Act rejecting assessee’s application for condonation of delay in filing Form No. 10B, without waiting for the outcome of Writ Petition filed by the assessee.
2. The Ld. CIT(A) erred in upholding the order passed u/s 143(1) of the Act by CPC disallowing the exemption u/s 11/12 of the Act to the assessee, without appreciating that such adjustment was impermissible.
3. Without prejudice the Ld. CIT(A) erred in upholding the order passed u/s 143(1) of the Act by CPC determining the total income at Rs. 2,52,88,547/-treating the entire receipt as income without allowing any expenditure.
4. The Assessee craves leave to add, alter modify or delete one or more ground before or at the time of hearing of Appeal.”
3. Assessee trust is registered under the Act and runs an educational institution. It is granted registration u/s 12A dated 18.08.1993, bearing no. INS/20395 w.e.f. 01.04.1992. Its registration has been renewed for further period of 5 years by PCIT(E) Mumbai from AY 2022-23 to ΑΥ 2026-27. It is also registered as a Public Charitable Trust with Charity Commissioner, Mumbai bearing registration no. F-5734 (Mumbai) dated 27.11.1979. It is also registered as a society under Society Registration Act, 1860 bearing registration certificate no. BOM 485/79GBBSD dated 10.10.1979. Assessee filed its return of income on 30.09.2020, reporting total income at Nil. Return was not accompanied by Audit Report in Form 10B. Due to an inadvertent omission, assessee failed to verify the return by submitting the signed ITR-V within 120 days, as required under the procedures prescribed by the CPC. Subsequently, in March 2021, upon realization, during the course of assessment proceedings for the preceding assessment year AY 2018-19 that the return for AY 2019-20 had not been processed, assessee proactively submitted the signed acknowledgement (ITR-V) along with Audit Report in Form 10B for the relevant year, and also for the subsequent assessment year, i.e., for AY 2020-21. This return was processed on 23.11.2021 by issuing an intimation u/s. 143(1). When the return was processed, CPC had at its disposal audit report in Form 10B, filed by the assessee on 30.03.2021. According to the assessee, the CPC, without assigning any reason and without affording any opportunity of being heard, refused to take cognizance of the belated submissions and rejected the condonation request in a non-speaking manner.
