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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Ujjal Bhuyan, Milind N Jadhav, JJ.
Little Angels Education Society - Appellant
Versus
Union Of India & Ors. - Respondents
Writ Petition No. 1061 of 2020, 1288 of 2020
Decided On : 25-03-2021
Income Tax Act - Delay in filing Form No.10B - Section 11, Section 12, Section 119(2)(b) - The court discussed the provisions of Section 11 and Section 12 of the Income Tax Act, which deal with income from property held for charitable or religious purposes and income of trusts or institutions from contributions, respectively. The court also examined Section 119(2)(b) which confers power upon the CBDT to issue instructions and directions to other income tax authorities for avoiding genuine hardship in any case or class of cases. The court highlighted the CBDT's Circular No.2/2020, which authorized the Commissioner of Income Tax to admit belated applications for condonation of delay in filing Form No.10B for a period of up to 365 days, and emphasized the need for a special order from the CBDT to condone delays beyond 365 days.
Fact of the Case:
The petitioners, charitable trusts providing education, challenged the orders declining to condone the delay in filing Form No.10B for the assessment year 2018-2019 under the Income Tax Act, 1961. The Commissioner rejected the application for condonation of delay, citing the CBDT's Circular No.2/2020.
Finding of the Court:
The court found that the delay in filing Form No.10B exceeded 365 days and upheld the Commissioner's decision to reject the application for condonation of delay. However, the court directed the petitioners to file an application before the CBDT seeking a special order to condone the delay beyond 365 days.
Issues: The main issue was the delay in filing Form No.10B and the authority of the Commissioner to condone such delays under the CBDT's Circular No.2/2020.
Ratio Decidendi: The court held that while the CBDT's circular authorized the Commissioner to admit belated applications for condonation of delay for up to 365 days, a special order from the CBDT could still condone delays beyond 365 days.
Final Decision: The court directed the petitioners to file an application before the CBDT seeking a special order to condone the delay in filing Form No.10B for the assessment year 2018-19, and ordered the CBDT to pass an appropriate order within a specified timeframe.
JUDGMENT
Ujjal Bhuyan, J. - This order will dispose off both writ petition Nos.1061 and 1288 of 2020.
2. We have heard Dr. K. Shivaram, learned senior counsel for the two petitioners and Mr. Sham Walve, learned standing counsel revenue for the respondents.
3. In Writ Petition No.1061 of 2020, Little Angels Education Society, Santacruz (West), Mumbai is the petitioner whereas in Writ Petition No.1288 of 2020, Rev. C. F. Andrews Education Society, Santacruz (East), Mumbai is the petitioner. Both the petitioners are charitable trusts providing education to students belonging to middle class families through various schools situated in Mumbai. Both the petitioners are assessed to income tax under the Income Tax Act, 1961 (briefly 'the Act' hereinafter).
4. Challenge made in both the writ petitions is to the orders dated 19.02.2020 passed by the Commissioner of Income Tax (Exemptions), Mumbai declining to condone the delay in filing Form No.10B of the Act for the assessment year 2018-2019.
5. Since facts are identical in both the petitions, for the sake of convenience we may refer to the facts pleaded in Writ Petition No.1061 of 2020.
6. It is stated that for the assessment year 2018-19, petitioner filed return of income on 25.07.2018 declaring nil income. Form No.10B was obtained on 15.08.2018 from the auditor. It is stated instead of uploading Form No.10B in the income tax portal, petitioner uploaded Form No.10BB because of mistake of the chartered accountant and accountant.
7. Centralized Processing Centre (CPC) of the Income Tax Department informed the petitioner vide letter dated 26.07.2019 about proposed adjustment in the income tax return for the assessment year 2018-19. Subsequently, petitioner received an intimation / order dated 17.10.2019 from the CPC under section 143(1) of the Act raising a demand of Rs.1,46,01,489.00 as payable by the petitioner for the assessment year 2018-19 by denying exemptions under sections 11 and 12 of the Act. This has been challenged by the petitioner in appeal before the Commissioner of Income Tax (Appeals).
8. Petitioner uploaded Form No.10B on the income tax portal on 06.11.2019 and also filed an application for condonation of delay. As a matter of fact, petitioner filed Form No.10B for assessment years 2017- 18 and 2018-19.
9. Respondent No.2 i.e., Central Board of Direct Taxes issued Circular No.2 of 2020 dated 03.01.2020 empowering the Commissioner of Income Tax (Exemptions) to condone the delay in filing Form No.10B for a period upto 365 days from the assessment year 2018-19 onwards.
10. Commissioner of Income Tax (Exemptions), Mumbai requested the petitioner vide letter dated 04.02.2020 to furnish documents in connection with the application for condonation of delay for the assessment year 2018-19 which was complied with by the petitioner.
11. However, vide the impugned order dated 19.02.2020, Commissioner of Income Tax (Exemptions), Mumbai rejected the application of the petitioner for condonation of delay for the assessment year 2018-19. The said order was passed following Circular No.2 / 2020 of the Central Board of Direct Taxes (for short 'CBDT').
12. Petitioner has stated that it had filed an application for condonation of delay in filing Form No.10B for the assessment year 2017-18 which was allowed by the Commissioner of Income Tax (Exemptions) by condoning the delay.
13. Aggrieved, the related writ petition has been filed for quashing of order dated 19.02.2020 and for a direction to the Commissioner of Income Tax (Exemptions) to condone the delay in filing Form No.10B for the assessment year 2018-19.
14. Respondents have filed reply affidavit. It is stated that petitioner had filed return of income under section 139(1) of the Act on 15.08.2018 and revised return of income on 30.03.2019. Form No.10B was filed on 06.11.2019 which was after lapse of more than 365 days from the due date of filing of return of income. Reference has been made to the Circular No.2 of 2020 dated 03.01.2020 to conten
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