30 Day Delay in Filing Form 10B Due to Accountant's Family Medical Issue: Delhi HC Directs CIT(E) to Condone Delay [Read Order]

The Delhi High Court,directed the Commissioner of Income Tax(Exemption)[CIT(E)] to condone the 30-day delay in filing Form 10B for Assessment Year(AY) 2022-23, following the assessee's explanation that the delay was due to medical issues in the accountant’s family.

FIITJEE Foundation and Education Research and Trainings,petitioner-assessee,is a charitable organisation that has been claiming exemptions under Sections 11, 12, and 12A of the Income Tax Act. To claim this exemption, the petitioner needed to file an audit report in Form 10B at least one month before the return due date.

For AY 2022-23, the petitioner filed its return on 07.11.2022, within the extended deadline. However, Form 10B was filed the same day, one month late. Because of this, the Central Processing Centre sent an intimation on 04.04.2023, denying the exemption and creating a tax demand of ₹18,12,06,760/-. The petitioner appealed the decision, which was still pending before the CIT(A).

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Later, the return was picked for scrutiny, and a notice was issued on 01.06.2023 due to the late filing of Form 10B. On 07.08.2023, the petitioner filed an application explaining the delay was due to medical issues in the accountant’s family.

Even though the application was still pending, the NFAC completed the assessment on 25.03.2024. Despite the explanation, the CIT(E) rejected the application for condoning the delay, and the petitioner is challenging this decision in court.

The Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia noted that the petitioner’s activities were clearly within the scope of charitable purposes under the Income Tax Act. The petitioner had been regularly filing its returns and receiving exemptions as per the Act, and there was no dispute regarding its entitlement to exemption.

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The delay in filing Form 10B was explained by the petitioner as being due to the unavailability of its accountant’s son, Siddharth, who was suffering from Dengue in September 2022. The audit, which was based on the final accounts, was delayed because the accountant could not complete the work on time. The audit was finished on 07.11.2022, and Form 10B was filed immediately after.

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The petitioner provided medical reports to support its claim, including a doctor’s prescription and hospital records, which confirmed that Siddharth had Dengue. The Court found the explanation reasonable and supported by sufficient evidence.

The Court also referred to Section 119(2)(b) of the Act, which allows for the condonation of delays in cases of genuine hardship. It noted that the Bombay High Court had emphasized a liberal interpretation of "genuine hardship" in similar cases. The bench concluded that the delay was not due to negligence and directed the CIT(E) to condone the 30-day delay in filing Form 10B for AY 2022-23.

Therefore,the writ  petition was disposed of.

To Read the full text of the Order CLICK HERE

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