Case Law Details
R.N. Shetty Trust Vs PCIT (Central) (Karnataka High Court)
Karnataka High Court Directs Condonation of Delay in E-Filing Form 10 for Section 11(2) Accumulation
The Karnataka High Court allowed the writ petition filed by R.N. Shetty Trust, quashing the order passed by the Principal Commissioner of Income Tax under Section 119(2)(b) refusing to condone the delay in e-filing Form 10 for AY 2017-18.
The Court noted that the Trust had filed Form 10 manually within the prescribed time, and the delay occurred only in electronic filing, which was subsequently done along with an application for condonation. The Court found that the delay was due to bona fide reasons and genuine hardship, and not due to any mala fide intent or negligence.
It was held that the authority had adopted an overly technical approach, ignoring the fact that the substantive compliance—intimation of accumulation under Section 11(2)—had already been made within time. Once the delay in filing the return itself had been condoned, refusal to condone the delay in e-filing Form 10 was found to be arbitrary and unsustainable.
Accordingly, the Court set aside the impugned orders, condoned the 364-day delay in e-filing Form 10, and directed the Department to proceed further in accordance with law. The ruling reiterates that procedural lapses should not defeat substantive charitable exemption claims when sufficient cause and bona fide conduct are established.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, petitioner seeks the following reliefs:
(i) Issue a writ of certiorari quashing the order dated 24.02.2021 passed under Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2017-18 by the respondent No.1 bearing DIN and Notice No.ITBA/COM/F/17/2020-21/1030932039(1) referred as Annexure-A1 to the extent held against the petitioner in not condoning the delay in filing Form 10 and Corrigendum to the order dated 24.02.2021 passed vide dated 26.02.2021 vide DIN and Order No.ITBA/COM/F/17/2020-21/1031047112(1) as referred as Annexure-A2.
(ii) Issue a writ of mandamus or direction in the nature of writ of mandamus directing the respondent No.1 to condone the delay in e-filing of the Form-10 for the assessment year 2017-18 and consequently, allow the claim for accumulation under Section 11(2) of the Act.
(iii) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.
2. Heard the learned counsel appearing for the petitioner and learned counsel appearing for the respondents and perused the material on record.
3. A perusal of the material on record will indicate that on 31.10.2017 the petitioner filed a physical copy of Form-10 before the Assessing Officer and the due date for filing the income tax returns under Section 139(1) of the Income Tax Act, 1961 was 07.11.2017 and so also the due date for filing Form – 10 as per Section 11(2)(c) of the Act was also 07.11.2017. On 30.11.2017, the petitioner filed income tax returns along with an application for condonation of delay, which was condoned by the respondent No.1 under Section 119(2)(b) of the Act vide order dated 17.12.2021. Subsequently, the respondent having issued a intimation under Section 143(1) dated 28.09.2018, the petitioner filed Form-10 electronically on 05.11.2018 along with an application for condonation of delay in E-filing Form – 10 and filing of Form 10B on 24.01.2021. It is the grievance of the petitioner that though respondent No.1 passed the impugned order condoning the delay on the part of the petitioner in filing Form-10B, the application filed by the petitioner for filing Form-10 was not condoned by respondent No.1 by passing the impugned order, which is assailed in the present petition.
4. Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.
5. A perusal of the impugned order will indicate that the respondent has failed to consider and appreciate that the delay on the part of the petitioner in filing the application in Form-10 was due to bonafide reasons, unavoidable circumstances and sufficient cause. The same could not be filed electronically though the petitioner had filed the same manually. The inability and omission on the part of the petitioner to file Form-10 electronically was due to genuine hardship and as such, I am of the considered opinion that the impugned order deserves to be set aside and the application filed by the petitioner seeking 364 condonation of delay in filing Form-10 deserves to be allowed.
7. In the result, I pass the following:
ORDER
(i) The petition is hereby allowed.
(ii) The impugned order dated 24.02.2021 passed under Section 119(2)(b) of the Income Tax Act, 1961 and the order dated 24.02.2021 at Annexures –A and A1 are hereby set aside.
(iii) The Application for condonation of delay of 364 days in e-filing on the part of the petitioner in e-filing Form-10 for the assessment year 2017-18 stands condoned.
(iv) Application for condonation of delay of 364 days is allowed.
(v) The respondents are directed to proceed further in accordance with law.
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