The Delhi High Court has held that the tax department must adopt a liberal and purposive approach while dealing with delay condonation applications, especially when guided by beneficial circulars issued by the Central Board of Direct Taxes (CBDT) and set aside an order rejecting delay condonation for filing Form 10 and allowed the assessee’s application, emphasizing that a hyper-technical approach defeats the intent of relief measures.
The Bench ofJustice Dinesh Mehta and Justice Vinod Kumar observed that the CBDT circular was issued specifically to address practical difficulties faced by assessees during the first year of mandatory e-filing of Form 10. The CBDT circulars are intended to provide relief and should not be frustrated by rigid interpretation.
The case arose from a writ petition filed by the Food Safety and Standards Authority of India challenging the rejection of its application under Section 119(2)(b) of the Income Tax Act, 1961. The application sought condonation of delay in filing Form 10 for Assessment Year 2016–17, which is required for claiming exemption under Sections 11 and 13 of the Act.
The petitioner, a registered charitable entity, failed to file Form 10 electronically along with its return of income within the prescribed due date under Section 139(1). The requirement for electronic filing of Form 10 was introduced following amendments made by the Finance Act, 2015, effective from April 1, 2016.
Upon realizing the omission, the petitioner filed the form belatedly on December 15, 2018. However, the Income Tax Department treated the form as non-existent due to the delay. Subsequently, the petitioner filed an application seeking condonation of delay, relying on CBDT Circular No. 7/2018 dated December 20, 2018, which empowered Commissioners to admit delayed filings in appropriate cases.
Despite this, the Commissioner of Income Tax (Exemption) rejected the application, stating that the reasons provided did not constitute sufficient cause.
The Court noted that the petitioner had attributed the delay to the termination of an employee at its Chartered Accountant firm, which led to the oversight in filing the form. It held that such a reason cannot be outrightly dismissed as invalid unless proven otherwise.
The Court remarked that no assessee stands to gain from delaying the filing of Form 10, and therefore, such delays should not be viewed with suspicion in the absence of mala fide intent.
The High Court strongly criticized the Commissioner’s approach, observing that when the “spirit of the circular was to condone delay,” authorities should not resort to a hyper-technical interpretation. It reiterated that administrative discretion must align with the objective of easing genuine compliance difficulties.
The Court quashed the Commissioner’s order and condoned the delay in filing Form 10. It also directed that the petitioner’s application and related requests be treated as allowed, with all consequential benefits to follow.
Case Details
Case Title: FSSAI Versus CBDT
Citation: JURISHOUR-1070-HC-2026(DEL)
Case No.: W.P.(C) 4091/2019
Date: 27.04.2026
Counsel For Appellant: Rakesh Chaudhary
Counsel For Respondent: Gaurav Gupta, SSC
