One-Day Delay in Filing Form 10B: ITAT Condones Delay and directs to Allow Charitable Trust Claim [Read Order]
A 60-day delay occurred in filing the appeal, and the assessee requested condonation, stating the delay was due to lack of knowledge of the PCIT’s order
The Cuttack Bench of Income Tax Appellate Tribunal (ITAT) allowed the appeal, holding that a one-day delay in filing Form 10B was procedural and minor, condoning the delay and directing the Assessing Officer (AO) to allow the charitable application and accumulation claimed by the trust.
Naba Utkal Trust,appellant-assesee, filed its income return for the assessment year 2021-22 as a trust registered u/s.12AA. The ADIT(CPC), Bengaluru, passed an order u/s.143(1) on 23.08.2022, which was also stated as the date of service of the demand notice in Form 35.
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The trust, running an ITI College as an approved educational institution, filed its audit report u/s.12A(b) in Form 10B on 16.03.2021, one day after the due date, and declared a gross total income of Rs.39,18,463/-, applying Rs.35,04,508/- for charitable purposes and accumulating Rs.4,13,955/- under section 11(2) of the Act.
The CPC disallowed the charitable application and accumulation, taxed the entire income, and raised a demand with interest of Rs.12,69,400/-. During the appeal, the trust relied on Central Board of Direct Taxes (CBDT) Circular No.16/2022, which allowed condonation of delay in filing Form 10B for up to three years.
However, the Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the appeal, stating it had no power to condone the delay, leading the trust to approach the tribunal.
A 60-day delay occurred in filing the appeal, and the assessee requested condonation, stating the delay was due to lack of knowledge of the Principal Commissioner of Income Tax (PCIT)’s order. The departmental counsel raised no objection. The tribunal found the reasons sufficient, condoned the delay, and admitted the appeal for hearing.
The assessee counsel stated that the audit report, due on 15.03.2021, was filed with a one-day delay on 16.03.2021 due to a technical glitch in the IT portal. They argued that the Pr.CCIT or CCIT had the power to condone such delay under CBDT Circular No.16/2022, but the CIT(A) rejected the plea, stating it had no such power.
The assessee’s applications for condonation filed on 15.12.2022 and 05.02.2025 were also rejected. With no other remedy, the assessee approached the tribunal.
The Departmental counsel supported the lower authorities, stating that the CIT(A) rightly held it could not condone the delay.
The two member bench comprising Sonjoy Sarma (Judicial Member) and Sanjay Awasthi (Accountant Member) noted that the assessee had complied with all other requirements but filed Form 10B one day late. It held that the minor delay, being procedural and not mandatory, could not justify disallowing the claim. Accordingly, the tribunal condoned the delay and directed the AO to allow the assessee’s claim in accordance with the law.
Therefore the appeal of the assessee was allowed.
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