Karnataka Sangha Vs CIT (Exemptions) (Bombay High Court)
Bombay High Court ruled in favor of Karnataka Sangha in its appeal against the Commissioner of Income Tax (Exemptions) [CIT (Exemptions)], allowing condonation of a 15-day delay in filing Form-10B under the Income Tax Act, 1961. The dispute arose when CIT (Exemptions) refused to condone the delay, citing a lack of sufficient cause. The petitioner argued that the ongoing reconstruction and redevelopment of its premises, coupled with disruptions caused by the COVID-19 pandemic, had hampered its ability to file the form on time. The court, considering these circumstances, ruled that the delay was justified.
The respondent’s counsel opposed the condonation, stating that the petitioner, being an old trust, should have been aware of compliance requirements. It was also argued that reconstruction activities should not have prevented routine administrative functions, including timely tax filings. The CIT (Exemptions) had referred to previous judgments emphasizing strict adherence to statutory timelines, including Ranka & Others Vs. Rewa Coalfields Ltd. (AIR 1962 SC 361), which required a detailed explanation for each day’s delay. However, the court found that the petitioner had provided adequate documentary evidence of ongoing construction work and justified its reasons for the delay.
The court observed that while timely filing is crucial in tax matters, a marginal delay of 15 days due to genuine reasons should not be treated with excessive rigidity. The impugned order’s reasoning that such a delay would have been acceptable for an earlier financial year but not for 2022-23 was deemed improper. The court held that since the redevelopment work had commenced in 2018 and was ongoing, the petitioner’s justification remained valid across assessment years. The court also noted that there was no evidence of malafide intent or any undue advantage gained by the petitioner due to the delay.
