Babubhai C Jariwala Charitable Trust Vs Central Board of Direct Taxes (ITA Cell) & Ors (Gujarat High Court)
The Gujarat High Court heard a petition filed by a charitable trust challenging the order dated 17 October 2023 passed by the tax authorities under Section 119(2)(b) of the Income Tax Act, 1961. The authority had rejected the trust’s request for condonation of delay in filing Form 10B for Assessment Year 2018-19. The Court noted that the controversy was limited in scope and, with consent of both sides, proceeded to hear the matter immediately.
The petitioner is a registered charitable and religious trust under the Bombay Trust Act and also registered under Sections 12A and 12AA of the Income Tax Act. The trust filed its return of income and Form 10 on 20 October 2018 declaring nil income. However, the return was processed under Section 143(1), resulting in an assessed income of ₹87,26,081. The intimation was issued through the trust’s registered email address. The trust stated that this email ID was not used for daily functioning, and trustees did not regularly access it, resulting in their lack of awareness of the intimation.
The trust had assigned tax compliance work to its Chartered Accountant. In 2022, after changing auditors, the trust discovered an outstanding tax demand of ₹30,95,448 for AY 2018-19. The new auditors found that although the audit report had been prepared and uploaded by the earlier auditor, Form 10B had not been filed along with the return, which led to denial of deductions claimed by the trust. The earlier auditor later confirmed that the audit report had been signed and intended for upload but, due to workload and deadlines, Form 10B was inadvertently not filed.
