Case Law Details
St. Tomas Education and Welfare Society Indore Vs Revenue Department And Others (Madhya Pradesh High Court)
Madhya Pradesh High Court has intervened in a tax dispute, allowing a charitable society to condone delays in filing its Income Tax Return (ITR), Form 10B, and Form 10, citing the widespread disruptions caused by the COVID-19 pandemic. The ruling in St. Tomas Education and Welfare Society Indore Through Its Secretary Shri Raji Thomas vs. Revenue Department And Others overturns an order by the Commissioner of Income Tax (Exemptions), Bhopal, which had declined to condone the delay. The High Court’s decision heavily relies on the Supreme Court’s various orders extending limitation periods during the pandemic.
Background of the Case:
The petitioner, St. Tomas Education and Welfare Society, is a registered charitable society operating multiple schools in Indore, including Marthoma Public School, Marthoma Higher Secondary School, and Marthoma Academy. As an entity registered under Section 12A of the Income Tax Act, the society regularly files its income tax returns along with audited financial statements, Form 10, and Form 10B, given its gross receipts consistently exceed Rs. 1 crore annually.
For the Assessment Year 2020-21, the due date for filing Form 10B was January 15, 2021, and for Form 10 and the Income Tax Return, it was February 15, 2021. However, the society filed its ITR, Form 10A, and Form 10B on March 9, 2021, a delay of 22 days for the ITR. The return declared a gross total income of Rs. 13,74,13,564/-, claiming deductions under Section 11, including a 15% standard deduction, resulting in a nil taxable income.
The Central Processing Office (CPO) of the Income Tax Department in Bengaluru noted this delay and issued an intimation under Section 143(1)(a) of the Act. This intimation treated the entire gross receipts as taxable income, effectively disallowing the deductions claimed due to the late filing of the necessary forms. The petitioner stated that they only became aware of the delay after receiving this intimation.
Reasons for Delay and Petitioner’s Arguments:
The society attributed the delay to the unprecedented circumstances arising from the COVID-19 pandemic. They explained that the nationwide lockdown imposed from March 22, 2020, to June 25, 2020, and the subsequent closure of educational institutions, severely hampered the completion of their audit accounts. This situation, being beyond their control, prevented them from collecting the necessary documents and filing the return within the stipulated time.
The petitioner argued that under Section 119(2) of the Act, read with Circulars No. 2/2020 and 3/2020 dated January 3, 2020, the Commissioner of Income Tax (Exemptions) was authorized to condone delays up to 365 days if the assessee was prevented by a reasonable cause. Accordingly, the society filed applications for condonation of delay under Section 119(2)(b) for Form 10B on February 8, 2021, and for the ITR on July 11, 2022. However, these applications were rejected by the Commissioner via an order dated July 22, 2022.
Department’s Stance and Judicial Precedents:
During the High Court proceedings, the Revenue Department’s counsel, Shri Harsh Parashar, conceded that in similar matters, the Supreme Court and various High Courts had indeed condoned delays. However, he cited a Bombay High Court Division Bench judgment in CVO Chartered & Cost Accountants’ Association, Mumbai vs. Union of India [(2021) 125 taxmann.com 265 (Bombay)], which had declined to condone a delay after the period expired on February 15, 2021. The Revenue further contended that the Supreme Court’s orders extending limitation periods in Suo Motu Writ Petition (Civil) No. 3/2020 did not cover the limitation for filing ITRs, as they were not categorized as “any petition, application, suit, appeal and proceedings.”
High Court’s Analysis and Reliance on Supreme Court Orders:
The Madhya Pradesh High Court, after hearing both sides, critically examined the Supreme Court’s pronouncements in Suo Motu Writ Petition (Civil) No. 3/2020. The court meticulously traced the trajectory of these orders:
- March 23, 2020: The Apex Court first took suo motu cognizance of difficulties faced by litigants due to COVID-19 and directed the extension of limitation periods in all proceedings with effect from March 15, 2020.
- Subsequent Extensions: The limitation was relaxed for the period between March 15, 2020, and March 14, 2021. Further extensions were granted during the second wave of COVID-19, suspending proceedings until October 2, 2021, and later extending protection until February 28, 2022, due to new variants.
- January 10, 2022, Order: The Supreme Court definitively concluded that “in cases where the limitation would have expired during the period between 15.3.2020 till 28.2.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022.”
The High Court emphasized that the Supreme Court’s orders clearly granted the benefit of limitation to “all persons irrespective of their case/proceedings before any of the authority.” It found that the limitation for filing Form 10, Form 10B, and the ITR in the present case admittedly expired during the period covered by the Supreme Court’s extensions (i.e., between March 15, 2020, and February 28, 2022).
The High Court also considered several other High Court judgments that had condoned similar delays, aligning with the spirit of the Supreme Court’s directives:
- Ramesh Chandra Purohit vs. Aaykar Bhawan and Others [2024 SCC OnLine MP 6939]
- Kusum Yadav vs. PCIT [WP No. 8083/2023 High Court of M.P. at Jabalpur]
- Shailesh Vitthalbhai Patel vs. Chief Commissioner of Income Tax [(2022) 145 taxmann.com 10 (Gujarat)]
- ADCC Infocomm (P) Ltd. vs. Principal Chief Commissioner of Income Tax [(2023) 150 taxmann.com 529 (Bombay)]
- Sarvvodaya Charitable Trust vs. Income Tax Officer (Exemption) [(2021) 125 taxmann.com 75 (Gujarat)]
- Institute of Rural Development Programme (IRDP), Balidokan vs. Commissioner of Income Tax (Exemption), Aayakar Bhawan, Hyderabad & Another [WP(C) No. 13183 of 2025 – High Court of Orissa]
- Action Research for Health and Socio-economic Development vs. Central Board of Direct Taxes & Others [WP(C) No. 8035 of 2025 – High Court of Orissa]
Regarding the Bombay High Court judgment cited by the Revenue, the Madhya Pradesh High Court noted that the said Division Bench “did not consider the orders passed by the Apex Court in Suo Motu Writ Petition (Civil) No.3/2020,” thereby distinguishing it from the present case.
Conclusion:
Based on its comprehensive review, the Madhya Pradesh High Court concluded that the petitioner was indeed entitled to the condonation of delay. Consequently, the impugned order dated July 22, 2022, passed by the Commissioner of Income Tax (Exemptions) was quashed. The applications for condonation of delay in filing Form 10, Form 10B, and the ITR were allowed. The writ petition was disposed of in these terms, providing relief to the charitable society and reinforcing the broad applicability of the Supreme Court’s COVID-19 related limitation extensions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT
1. Petitioner has filed this present petition challenging the order dated 22.7.2022 passed in Case No. ITBA/COM/F/17/2022-23/1044009156(1) by the respondent No.3, whereby the Commissioner of Income Tax, Exemptions, Bhopal has declined to condone the delay to submit the ITR Form 10-B and Form-10 of the respective years.
The facts of the case in short are as under:-
2. The petitioner is a registered Charitable Society established by member of minority community. The petitioner-Society is running Marthoma Public School affiliated to M.P. Educational Board, Marthoma Higher Secondary School affiliated to CBSE and Marthoma Academy affiliated to CBSE. The petitioner-Society has a PAN No. AAAAS9716 under Section 12(A) of the Income Tax Act. The petitioner is regularly filing income tax return along with audited balance sheet, profit and loss statement, Form-10 and Form 10B as the gross receipts exceeds Rs.1 Crore every year.
3. The due date for filing Form-B for A.Y. 2020-21 was 15.1.2021 and Form-A and Income Tax Return was 15.2.2021. The petitioner-Society has filed its income tax return Form 10-A & Form 10-B on 9.3.2021 declaring gross total income of Rs.13,74,13,564/- claiming deduction under Section 11, including 15% standard deduction under Section 11(2) of the Income Tax Act showing nil taxable income.
4. Central Processing Office of the Income Tax Department in Bengaluru noticed the delay and intimation under Section 143(1)(a) of the Act was sent treating gross receipts Rs.13,74,13,564/- as taxable income, without considering the deduction in standard deduction. The petitioner came to know about the delay in submission of Form-10 only after receipt of notice under Section 143(1)(a) of the Income Tax Act. According to the petitioner, the delay has caused because of non completion of audit of accounts due to closure of the school premises due to Covid-19 pandemic. Due to the outbreak of Covid-19, the country-wide lockdown was imposed from 22.3.2020 to 25.6.2020. Though the lockdown was pulled off but educational institutions were remained closed, therefore, the situation was beyond the control of the petitioner. Hence, the necessary documents could not be collected for filing the return within time.
5. According to the petitioner, in the light of Section 119(2) of the Act the respondent No.2 authorised Commissioner of Income Tax having territorial jurisdiction for condonation of delay where there is delay upto 365 days as per Circular dated 3.1.2020. The Commissioner was directed to admit such belated application for condonation of delay and to adjudicate such application under Section 119(2) on merit by satisfying themselves that the Assessee was prevented by reasonable cause from filing application. In the light of the aforesaid Circular, the petitioner submitted an application under Section 19(2)(b) of the Act on 8.2.2021 for condonation of delay in filing Form-10B before respondent No.3. The petitioner also filed an application under Section 119(2)(b) of the Act on 11.7.2022 for condonation of delay of filing income tax return. Vide impugned order dated 22.7.2022 the respondent No.3 has rejected the application. Hence, this petition before this Court.
6. Shri Nema, learned senior counsel appearing for the petitioner submits that the learned Commissioner has dismissed the application mechanically without considering the effect of Circular No.2/2020 and 3/2020 dated 3.1.2020 and the order passed by the Apex Court time to time in Suo Motu Writ Petition (Civil) No.3/2020, whereby the period of limitation was extended in all types of proceedings before all authorities. The circumstances were beyond the control of the petitioner in filing the return within the prescribed time. It is further submitted that in similar facts and circumstances the Apex Court, this Court as well as other High Courts have condoned the delay in filing of the Form-10 in Income Tax Return. The details are as follows:- (1) Ramesh Chandra Purohit Vs. Aaykar Bhawan and Others [2024 SCC OnLine MP 6939], (2) Kusum Yadav Vs. PCIT [WP No.8083/2023 High Court of M.P. at Jabalpur], (3) Shailesh Vitthalbhai Patel Vs. Chief Commissioner of Income Tax [(2022) 145 taxmann.com 10 (Gujarat)], (4) ADCC Infocomm (P) Ltd. Vs. Principal Chief Commissioner of Income Tax [(2023) 150 taxmann.com 529 (Bombay)], (5) Sarvvodaya Charitable Trust Vs. Income Tax Officer (Exemption) [(2021) 125 taxmann.com 75 (Gujarat), (6) Institute of Rural Development Programme (IRDP) , Balidokan Vs. Commissioner of Income Tax (Exemption), Aayakar Bhawan, Hyderabad & Another [WP(C) No.13183 of 2025 – High Court of Orissa] & (7) Action Research for Health and Socio-economic Development Vs. Central Board of Direct Taxes & Others [WP(C) No.8035 of 2025 – High Court of Orissa]. Learned senior counsel submits that in one case the Apex Court has condoned the delay of 365 days, whereas in the present case the delay is only 22 days in submission of the return.
7. Shri Harsh Parashar, learned counsel appearing for the respondents admits that although in the aforesaid cases relied on by the senior counsel, in identical matters the delay has been condoned by the Apex Court as well as by the High Court but in the case of CVO Chartered & Cost Accountants’ Association, Mumbai Vs. Union of India reported in (2021) 125 taxmann.com265 (Bombay), the Division Bench has declined to condone the delay after the period expired from 15.2.2021. However, Shri Harsh Parashar, learned counsel admits that in the aforesaid judgment the Division Bench did not consider the orders passed by the Apex Court in Suo Motu Writ Petition (Civil) No.3/2020. It is further submitted that the Apex Court’s order does not cover the limitation of filing ITR as it does not fall in the category of any petition, application, suit, appeal and proceedings.
We have heard the learned counsel for the parties and perused the record.
8. Admittedly in the present case the due date for filing the income tax return was on 15.2.2021 under Section 139(4) but the same was filed on 9.3.2021. In the month of March, 2020 the Apex Court took suo motu cognizance of the difficulties that might be faced by the litigant in filing petition, suit, application, appeal and other quasi proceedings within the period of limitation prescribed under the general law or under any special law; both Central or State due to outbreak of Covid-19 pandemic. First time on 23.3.2020 the Apex Court directed for extension of period of limitation in all the proceedings with effect from 15.3.2020. The limitation was relaxed for the period between 15.3.2020 to 14.3.2021. Thereafter the second stage of Covid-19 started and application was moved for restoration of the order dated 23.3.2020 and all proceedings were suspended till 2.10.2021. Thereafter new variant of Covid-19 was spread across the country and again the protection from expiry of limitation was granted and it was extended up to 28.2.2022. Finally vide order dated 10.1.2022 the Apex Court has concluded that where the limitation would have expired during the period between 15.3.2020 till 28.2.2022 notwithstanding the actual balance period of limitation remaining, all persons shall have limitation period of 90 days from 1.3.2022. Para 5(III) of the order dated 10.1.2022 is reproduced below:-
“5.(III). In cases where the limitation would have expired during the period between 15.3.2020 till 28.2.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.”
9. Therefore, it is clear from the aforesaid order of the Apex Court that benefit of limitation was granted to all persons irrespective of their case/proceedings before any of the authority. Admittedly the limitation of filing Form-10 & Form-10B expired during 15.3.2020 till 28.2.2022. Therefore, the petitioner is entitled for condonation of delay. Hence, the impugned order dated 22.7.2022 is quashed. The application under Section 119(2)(b) of the Income Tax Act for condonation of delay in filing Form 10, Form 10-B & ITR is hereby allowed.
10. In view of the above, the writ petition is disposed of.
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