IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 34153 of 2025 Association For Luminous and …. Petitioner Intensive Social Health Awarness Mr. Prakash Kumar Jena, Advocate along with Mr. S.P. Dalai, Advocate -versus-

Commissioner of Income Tax …. Opposite Parties (Exemption), Aayakar Bhawan, Hyderabad & others Mr. Subash Chandra Mohanty, Senior Standing Counsel along with Mr. Avinash Kedia, Junior Standing Counsel for CGST CORAM:

HON’BLE THE CHIEF JUSTICE HON’BLE MR. JUSTICE MURAHARI SRI RAMAN Order ORDER No. 11.12.2025

01. 1. Challenging the order dated 15.07.2025 (Annexure-1)

rejecting the petition for condonation of delay filed under Section 119(2)(b) of the Income Tax Act, 1961 for filing the audit report in Form 10B prescribed under Rule 17B of the Income Tax Rules, 1962 (for short, “IT Rules”) for claiming exemption from payment of income tax under Section 12A of the Income Tax Act, 1961 (for brevity, “IT Act”) for the Assessment Year 2020-21 by the Commissioner of Income Tax (Exemption), Hyderabad (“CIT”, abbreviated), the Petitioner has approached this Court by way of filing this writ petition under Articles 226 & 227 of the Constitution of India.

2. Mr. Prakash Kumar Jena, learned Advocate appearing along with Mr. S.P. Dalai, learned counsel for the Petitioner submitted that despite sufficient cause being shown, the Opposite Party No.1 has rejected the application for condonation of delay of 18 days in filing the audit report. It is submitted that the delay was caused due to COVID-19, Pandemic, which was not appreciated by the said authority.

2.1. Learned Advocate advanced valiantly argued that irrelevant decisions have been referred to and relied on by the CIT to disallow the exemption claimed in the returns. Though the audit report in Form 10B could be filed even before the assessment, the same was filed on 02.02.2021. The audit report was due for submission was 15.01.2021. Thus, there was only 18 days’ delay. The approach of the CIT indicates pedantic; rather utilizing his judicial discretion he should have been pragmatic in his approach. He, therefore, submitted that under Section 119(2)(b) of the Income Tax Act by virtue of Circular No.16 of 2024, dated 18.11.2024, the CIT has been delegated with power to exercise discretion while dealing with the application for condonation of delay in filing the Form 10B for the Assessment Year 2020-21- and subsequent years, where the delay is up to 365 days under Section 119(2)(b) of the IT Act. Despite such discretion is conferred on the CIT, the reason for the delay being not appreciated appropriately, the order is susceptible to be interfered with in the present proceeding, as such the same is liable to be set aside.

2.2. He strenuously urged that serious prejudice would ensue to the Petitioner if 18 days’ delay is not condoned as the audit report under Section 12A read with Rule 17B is required to be considered by the competent authority for the purpose of claiming benefits under the IT Act.

2.3. To buttress his argument, he placed reliance on the decision of the Gujarat High Court in Sarvodaya Charitable Trust vs. IncomeTax Officer (Exemption), (2021)18 ITR-OL 253 (Guj) and contended that the provision relating furnishing of audit report with the return is to be treated as procedural and the same could be filed even before the assessment.

3. Mr. Subash Chandra Mohanty, learned Senior Standing Counsel appearing along with Mr. Avinash Kedia, learned Junior Standing Counsel for the Income Tax Department submitted that the CIT exercising his discretion under Section 119(2)(b) of the IT Act rejected the application for condonation of delay having found no sufficient cause shown by the Petitioner. He submitted that genuine hardship being not demonstrated by the Petitioner, the rejection of petition for condonation of delay is not unjustified.

4. Mr. Prakash Kumar Jena, learned Advocate appearing along with Mr. S.P. Dalai, learned counsel for the Petitioner and Mr. Subash Chandra Moha