Orissa High Court Orders Reconsideration of Delayed Form-10B Filing, Citing Sufficient Cause [Read Order]

The Orissa High Court has directed the Income Tax Department to reconsider the delayed filing of Form-10B by a petitioner, stating that the explanation offered by the assessee constituted sufficient cause under Section 119(2)(b) of the Income Tax Act, 1961.

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The petitioner, Joharimal High School, Cuttack, had approached the Court for the second time after its application for condonation of delay in submitting Form-10B was rejected by the Principal Commissioner of Income Tax (Exemptions), Hyderabad. The earlier rejection was based on the ground that the petitioner had filed the application under Form-10BB instead of Form-10B. The High Court, by an earlier order dated August 27, 2024, had directed the department to treat the application as one filed under Form-10B and reconsider it. However, the department, by the impugned order, again refused to condone the delay on the basis that the explanation for the delay was not satisfactory and that day-to-day details of the delay were not provided.

The Court observed that while the law mandates that delays must not be condoned casually, it also empowers the authority to consider such applications provided there is a reasonable explanation. It clarified that it is not necessary for the assessee to furnish a day-to-day account of the delay, but there must be a continuity of events constituting sufficient cause.

The Bench emphasised that authorities should not take a pedantic view and reject applications for condonation merely based on strict interpretations of procedural law. Instead, a liberal and justice-oriented approach should be adopted to allow matters to be adjudicated on merits, especially where the explanation offered appears plausible and reasonable in the given context.

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The Court further held that the authority had erred in rejecting the application without adequately considering the explanation offered by the petitioner. It stated that the application ought to have been accepted since there was no statutory outer limit prescribed for filing such condonation requests and the petitioner had initially approached the Court in good faith against a technically flawed decision.

The Division Bench comprising Chief Justice Harish Tandon and Justice B.P. Routray set aside the impugned order and allowed the condonation application. The Court directed the authority to now consider Form-10B on its merits and decide the matter with reasons in accordance with law within two months from the date of communication of the order.

To Read the full text of the Order CLICK HERE

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