The Kerala High Court has condoned the delay in filing the audit report for the assessment year 2021-2022.
The bench of Justice Bechu Kurian Thomas has observed that the Central board of Direct Taxes (CBDT) had extended the time to file returns till 15.03.2022, and therefore, the petitioner should have filed the audit report 30 days before the returns. Since the change in dates has caused confusion to many persons and the delay is very minimal. A rigid stance ought not to have been adopted.
The Petitioner/assessee is a charitable trust registered under Section 12A of the Income Tax Act and is liable to file their returns as well as audit reports for each assessment year. In the assessment year 2021-2022, the audit reports were filed with a delay of 25 days.
However, the return, as required by law, was filed within time. Since there was a delay in filing the audit report, an application was filed before the Commissioner under Section 119(2)(b) of the Income Tax Act for condonation. However, by order dated 08.04.2024, the application was dismissed.
According to the petitioner, the delay in filing the audit report was inadvertent and it was during the Covid-19 Pandemic time, when the Supreme Court had even condoned delay in most of the matters. It is also pointed out the Commissioner has taken a very rigid stance, instead of adopting a liberal approach.
The petitioner/assessee is a charitable trust registered under Section 12A of Income Tax Act and is liable to file their returns as well as audit reports for each assessment year. In the assessment year 2021-2022, the audit reports were filed with a delay of 25 days.
However, the return, as required by law, was filed within time. Since there was a delay in filing the audit report, an application was filed before the Commissioner under Section 119(2)(b) of the Act for condonation. However, by order dated 08.04.2024, the application was dismissed.
The petitioner contended that the delay in filing the audit report was inadvertent and it was during the Covid-19 Pandemic time, when the Supreme Court had even condoned delay in most of the matters. It is also pointed out the Commissioner has taken a very rigid stance, instead of adopting a liberal approach.
The court noted that no specific reasons have been given by the Commissioner and instead, he merely came to the conclusion that the petitioner had failed to provide any reasons or documentary evidence to prove that the delay was caused due to circumstances beyond petitioner’s control. The approach of the Commissioner has been highly hyper-technical and contrary to the well established principles on condonation of delay.
The court stated that the requirement of an audit report to be filed one month before filing the returns has been brought in by an amendment only recently. Till then, the audit reports could be filed along with the returns. In the instant case, the delay in filing the audit report occurred at a time when Covid-19 Pandemic had struck the country.
The court quashed the order and condoned the delay in filing the audit report for the assessment year 2021-2022.
Case Details
Case Title: St. Joseph Educational And Charitable Trust Versus CIT
Case No.: WP(C) NO. 8942 OF 2025
Date: 04/04/2025
Counsel For Petitioner: Alexander Joseph Markos
Counsel For Respondent: Jose Joseph
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