Case Law Details
Jain Swetamber Murtipujak Tapagachha Sangh Vs CIT (Exemptions) (Bombay High Court)
n Jain Swetamber Murtipujak Tapagachha Sangh vs CIT (Exemptions), the Bombay High Court addressed a delay in filing Form 10 under Section 11(2) of the Income Tax Act, 1961. The petitioner, a registered trust managing a Jain temple in Mumbai, filed its income tax return for AY 2019-20 on 24th October 2019 but submitted Form 10 on 26th October 2020—361 days late. The trust sought condonation of the delay under Section 119(2)(b), but the tax authorities rejected the request, stating that the trust failed to provide a reasonable cause and should have been aware of tax filing requirements, given its longstanding registration. The authorities also noted that the trust did not proactively seek condonation but acted only after receiving an intimation from the Centralized Processing Centre (CPC) regarding the non-filing of Form 10.
The High Court overturned the rejection, accepting the explanation provided by the trust’s auditor, Mr. Hitesh Dedhia. He stated that he believed reporting accumulation in Form 10B (audit report) was sufficient and was unaware of the requirement for a separate Form 10. Due to this oversight and the COVID-19 pandemic, the form was uploaded belatedly. The Court ruled that the delay was neither intentional nor deliberate and that the trust should not suffer due to its auditor’s misunderstanding. The Court quashed the impugned order and condoned the delay, allowing the trust to proceed with rectification under Section 154, if necessary. However, it refrained from commenting on the merits of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Petitioner is a trust registered under the Bombay Public Trust Act, Petitioner manages a Jain Derasar (Temple) in Mumbai.
2. Petitioner had filed an application for condonation of delay in filing Form 10 for Assessment Year 2019-20. The application was filed on 10th January 2023. The return of income had been filed on 24th October 2019 under Section 139(1) of the Income Tax Act, 1961 (the Act). Form No. 10 was filed on 26th October 2020. Thus, there was delay of 361 days in submitting Form 10.
3. The condonation of delay application in filing Form 10 under Section 119(2)(b) of the Act came to be rejected vide order dated 3rd November 2023 which is impugned in the petition. According to Respondent No.1 petitioner has not submitted any supporting evidence with regard to reasonable cause that prevented it to file audit report in time as per the statutory limit. In the impugned order it is recorded that the reason given by petitioner as oversight by the trust’s management cannot be considered as reasonable cause. Petitioner is a very old trust and registered in 1987. Hence, petitioner should know the rules and regulations of the Income Tax Department very well. According to Respondent No.1 petitioner did not suo moto realize its mistake and filed a condonation request but woke up only when CPC sent an intimation about non filing of Form No.10.
The affidavit in reply reiterates the stand taken in the impugned order.
4. Petitioner has filed an additional affidavit of one Mr. Hitesh Dedhia affirmed on 22nd March 2024. Said Mr. Dedhia was the auditor of petitioner for the Assessment Year 2019-20. He has explained that since the factum of accumulation of receipts was reported in audit report in Form No. 10B he was under bonafide impression that there was no separate requirement to file a separate statement and that provisions of Section 11(2) of the Act were complied The said Mr.Dedhia has also stated that due to inadvertence and through oversight he did not consider the provisions of Rule 17 of the Act which required a separate statement in Form No. 10 to be filed apart from the audit report in Form No.10B. Hence, he did not advise petitioner to file Form No. 10. Mr. Dedhia has also stated that only after the intimation under Section 143(1) of the Act was received on or about 5th June 2020 denying the accumulation and that too during the peak of covid pandemic, Form No. 10 was uploaded on 26th October 2020 and condonation of delay application was filed on 27th October 2020.
5. Therefore, we are satisfied that the delay was not intentional or deliberate. Further, petitioner cannot be prejudiced on account of an ignorance of the Rules admitted by the professional engaged by In our view, this explanation by Mr. Dedhia is a reasonable explanation and should be accepted and delay be condoned.
We must also compliment Mr. Dedhia for being candid about his lapse. One needs courage to admit a mistake.
6. In the circumstances, we hereby quash and set aside the impugned order dated 3rd November 2023. The delay in filing Form No. 10 for Assessment Year 2019-20 shall be treated as condoned.
7. Petition disposed.
8. Petitioner may, if advised, take such steps as required including filing application under Section 154 of the Act for rectification. Should the application be filed within two weeks from the date this order is uploaded, the delay, if any, in filing an application under Section 154 of the Act shall also be considered as having been condoned.
9. We clarify that we have not made any observations on the merits of the matter.
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