The court emphasized that the discretion under Section 119(2)(b) of the Income Tax Act must be exercised to mitigate genuine hardship, allowing for the condonation of delay in filing Form 9A.

JUDGMENT :

(Per Advait M. Sethna, J.)

1. Rule, made returnable forthwith. Respondents waive service. By consent of the parties, heard finally.

2. This is a petition filed by the petitioner under Article 226 of the Constitution of India. It challenges an order dated 28 September 2023 (“impugned order” for short) passed by the Commissioner of Income Tax (Exemption) i.e., respondent no.1. The substantive prayers in the petition are reproduced below:

“a. that this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, calling for the records of the case and after satisfying itself as to the legality thereof quash and set aside the order dated 28.09.2023 passed by the Respondent No. 1 under section 119(2)(b) of the Income tax Act, 1961, being Ex.- ‘K’ and admit/accept the Form no 9A (Exh: ‘E’)hereto;

b. that this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, calling for the records of the case and after satisfying itself as to the legality thereof quash and set aside the order passed by the Respondent No. 1 dated 28/09/2023, being Ex.- ‘K’ and direct the Respondents 1 & 2 to admit/accept the Form no 9A (Exh: ‘E’))hereto.”

A) Issue before the Court:-

3. The issue that arises for consideration in this petition is whether the respondent No.1 was legally justified in rejecting the application for condonation of delay of 799 days filed by the petitioner in filing Form 9A for the Assessment Year (“A.Y.” for short) 2017-2018, when there is a power coupled with statutory discretion conferred upon the commissioners/competent authority under Section 119(2)(b), of the Income Tax Act, 1961 (“IT Act” for short) authorizing them to admit belated filing of Form 9A.

B) Factual Matrix:-

The relevant facts necessary for adjudication of the present proceedings are:

4. The petitioner is a trust registered with the Charity Commissioner, Mumbai vide registration No. E-2145, dated 1 January 2004 under section 12A of the IT Act, also having another registration No. INS- TR 38017, dated 29 January 2004. The respondent No.1 is the Commissioner of Income Tax (Exemption) who passed the impugned order.

5. The objects as stipulated in the Trust Deed dated 17 October 2003 of the petitioner concerns activities to establish, promote, set up, run, maintain and grant-aid and other financial assistance to educational institutions for development of human knowledge. In furtherance of such objects of the trust, the petitioner established D. G. Khetan International School, B. H. Gadia International School, B. K. Gadia, A Level Junior College and J. Kumar International School at Malad (West) in the year 2006. Since the year 2006, respondents have accepted the petitioner’s status as a charitable institution.

6. The petitioner trust filed its Nil return of income dated 12 October 2017 under Section 139(1) of the IT Act along with Form 10B for the A.Y. 2017-2018, after claiming exemption under Section 11 of the IT Act. The petitioner also filed its revised return on 29 December 2018, claiming exemption under Section 11 of the IT Act.

7. During the course of assessment proceedings, the petitioner uploaded a revised computation of income dated 09 November 2019 with a view to rectify certain computation mistakes namely (i) Claim of depreciation of Rs. 19,25,787 on fixed assets under Section 11(6) of the IT Act; (ii) Expenses claimed towards capital expenditure along with deduction of Rs. 57,28,869/- i.e., by way of exercising option under clause (2) to ‘Explanation 1’ to Section 11(1) of the IT Act, being interest amount accrued but not received. The assessment in the petitioner’s case was completed on 11 December 2019 resulting in the assessment order of the said date.

8. The petitioner filed Form 9A on 20 December 2019 on the Income Tax portal, alongwith an application for condonation of delay in filing the said Form 9A. According to