Petitioner, a trust managing a Jain Derasar in Mumbai, successfully appeals for the condonation of delay in filing Form No. 10 for Assessment Year 2019-20, citing inadvertence by their auditor, leading to the quashing of the earlier rejection order and the disposal of the petition.

• In a recent legal development, the Bombay High Court has ruled in favor of a trust managing a Jain Derasar (Temple) in Mumbai, quashing a penalty for delay in filing necessary income tax forms. The petitioner, a trust registered under the Bombay Public Trust Act, 1950, had filed an application for the condonation of delay in submitting Form No.10 for Assessment Year 2019-20. The court's decision came after a thorough consideration of the circumstances surrounding the delay and the explanations provided.

• The crux of the matter revolved around the delay of 361 days in submitting Form No.10, which was filed on 26th October 2020, despite the return of income being filed on 24th October 2019. The condonation of delay application was rejected by the authorities, citing the absence of supporting evidence regarding a reasonable cause for the delay. The petitioner, in response, contended that the delay was unintentional and attributed it to oversight.

• The respondent argued that the oversight by the trust's management could not be considered a reasonable cause, especially given the trust's long-standing registration since 1987. Additionally, they pointed out that the petitioner only sought condonation upon receiving an intimation from the Centralized Processing Centre (CPC) regarding the non-filing of Form No.10.

• However, the petitioner presented an additional affidavit from Mr. Hitesh Dedhia, the auditor for the Assessment Year 2019-20, explaining the oversight. Mr. Dedhia admitted that he failed to advise the petitioner to file Form No.10 separately, believing that the requirements were already fulfilled through Form No.10B. It was only after receiving an intimation under Section 143(1) of the Income Tax Act during the peak of the COVID-19 pandemic that the petitioner realized the necessity of filing Form No.10.

• The court acknowledged Mr. Dedhia's candid admission of his oversight and reasoned that the delay was not intentional or deliberate. They emphasized that the petitioner should not be penalized for the ignorance of the rules, especially when relying on a professional's advice. Consequently, the court quashed the penalty and condoned the delay in filing Form No.10 for Assessment Year 2019-20.

• In concluding the matter, the court directed the petitioner to take necessary steps, including filing an application under Section 154 of the Income Tax Act for rectification if advised. They clarified that their decision did not reflect any judgment on the merits of the case, focusing solely on the procedural aspect of condoning the delay.

• This verdict highlights the importance of considering all circumstances and explanations before penalizing entities for procedural lapses, emphasizing fairness and reasonableness in tax administration.

Topic-Shree Jain Swetamber Murtipujak Tapagachha Sangh Versus Commissioner of Income-tax (Exemptions)

Court:Bombay High Court

Date: 27/03/2024

Team Taxonation

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