Sarvodaya Charitable Trust Vs ITO (Exemption) (Gujarat High Court)
Gujarat High Court reviewed a petition filed by Sarvodaya Charitable Trust, a public charitable trust, challenging the rejection of its application for condonation of delay in filing Form 10B under Section 119(2)(b) of the Income Tax Act, 1961. The trust claimed that the delay was due to an oversight, as the trustees assumed that the auditor had completed the e-filing process. The Income Tax Department disallowed the exemption under Section 11, leading to a demand notice of Rs. 1.67 crore. The trust later filed the audit report and requested condonation of delay, which was denied by the Commissioner of Income Tax (Exemption). The trust then approached the High Court, arguing that the rejection was a rigid interpretation of the law and that the delay was inadvertent.
The IT department, represented by Ms. Mauna Bhatt, defended the rejection, stating that filing the audit report was mandatory and that the trust had not provided a compelling reason for the delay. The department also cited procedural limitations in reopening assessments beyond statutory deadlines. The High Court considered both arguments, focusing on whether the Commissioner exercised discretion judiciously. The trust cited past judicial precedents favoring a lenient approach to condonation in similar cases. However, the IT department maintained that the law required strict adherence to filing deadlines. The court’s final decision emphasized the importance of compliance while also considering genuine hardships faced by taxpayers in procedural lapses.
