Delay in Filing Form 10B is Procedural: S. 11 Exemption Can’t Be Denied on Technical Grounds: AP HC

The Andhra Pradesh High Court has held that delay in filing Form 10B is procedural and exemption under Section 11 of the Income Tax Act, 1961 cannot be denied on technical grounds. The bench of Justice Battu Devanand and Justice A. Hari Haranadha Sarma has observed that Form 10B is a procedural compliance, intended to support the claim of exemption, and cannot be construed as a rigid or inflexible condition to defeat substantive rights of charitable and religious institutions. The petitioner's society is a religious society registered under Section 12-A of the Income Tax Act, 1961(for short 'the Act'). The petitioner is running a small church and all the income is received by way of offerings from the people who participate in the weekly Sunday prayer meetings and special prayer meetings. The petitioner has been in operation for more than 15 years. Except for conducting prayers and helping the poor and needy people the society does not undertake any other activity and the trustees are not computer literate. For the Assessment Year 2021-22, the petitioner submitted its audit report with a delay of 44 days due to exceptional circumstances arising out of the Covid-19 pandemic and the advanced age(78 years) of its treasurer, who was responsible for compliance. The Central Processing Centre (CPC) of the Income Tax Department, Bangalore processed the petitioner's return and denied exemption under Section 11 of the Act and passed an order imposing tax liability of Rs.5,68,900 solely on the ground that the audit report was filed after the due date. For the purpose of seeking exemption from the tax liability, the petitioner submitted an application on 14.02.2023 with the Commissioner of Income Tax Exemptions seeking to condone the delay of 44 days with all necessary documents, justifications and earlier years audit reports. The Commissioner of Income Tax Exemptions called for certain documents from the petitioner for considering the request of the petitioner. But, the documents sought were not furnished by the petitioner. Hence, the Commissioner of Income Tax(Exemptions) has passed the rejection order, rejecting the application filed by the petitioner for condonation of delay under section 119(2) (b) for the Assessment Year 2021-22. The department contended that if the documents sought by the Income Tax Department vide letter which are relevant to consider the request of the petitioner were furnished, the request of the petitioner may not be rejected. But, as the petitioner failed to produce the documents sought by the Income Tax Department, the rejection order issued is in accordance with law and it is issued by following the due process of law. The court after considering that the assessee was registered under Section 12A, engaged exclusively in charitable and religious activities, and that the delay arose due to COVID-19 disruptions and the advanced age of the treasurer, the rejection was held to be unduly technical, arbitrary, and violative of principles of natural justice. The Court further observed that minor procedural lapses in filing Form 10B should not automatically result in denial of exemption when the audit report is otherwise available and the genuineness of activities is not in dispute. The court quashed the rejection order and granted three weeks’ time to furnish the requisite documents, and the Commissioner (Exemptions) was directed to reconsider the condonation application afresh in accordance with law, reaffirming that procedural prescriptions must advance, and not frustrate, the object of charitable exemption provisions. Case Details Case Title: Amnos Evangelical Fellowship Versus CPC Case No.: Writ Petition No: 8798 Of 2025 Date: 02/12/2025 Counsel For Petitioner: Vinodin Ruth Madapalli Counsel For Respondent: Y N Vivekananda Click Here To Read Order Read More: CBDT Flags Bogus Donation Claims, Uses Data Analytics to Push Voluntary Tax Corrections

Delay in Filing Form 10B is Procedural: S. 11 Exemption Can’t Be Denied on Technical Grounds: AP HC

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