The Kerala High Court has recently granted relief to the Solidarity Movement of India by directing the Income Tax department not to take any coercive measures such as recovery of taxes until the application for condonation of filing audit reports is decided on.
The petitioner, a Charitable Society, had raised the grievance that the benefit of Section 11 of the Income Tax Act, 1961 has not been extended to them due to their failure to submit audit reports on time.
The petitioner had filed a petition for condonation of delay before the 4th Respondent, The Commissioner of Income Tax (Exemption), Ernakulam, and the Standing Counsel for the respondents admitted that, by a circular No.16/22 dated 19.07.2022, the Commissioners of Income Tax were authorised to admit applications for condonation of delay in filing Form No.10B for the relevant assessment years.
The petitioner was represented by Harisankar V Menon, Meera V Menon, R Sreejith, K Krishna, and Parvathy Menon, while the respondent-State was represented by Standing Counsel Christopher Abraham.
In light of the petitioner’s application for condonation of delay, the Single Bench of Justice T R Ravi directed the 4th respondent, CIT(E) to consider the same and pass orders within one month, with consequential changes to be made in the assessment within six months thereafter. The court further directed that the steps for recovery initiated by the Income Tax department shall stand suspended until a decision is taken as aforesaid.
This decision by the Kerala High Court is significant as it provides relief to charitable organisations who may have missed the deadline for filing their audit reports.
The court’s direction to consider applications for condonation of delay in filing Form No.10B, along with the interim stay on recovery steps initiated by the Income Tax department, will provide a much-needed reprieve to such organisations.
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