Friends Associates Charitable Trust vs Income Tax Officer, Ward Exempt 1(1), Delhi

The appeal in ITA No.6252/Del/2026 for AY 2018-19, arises out of the order of the Id Jt. Commissioner of Income Tax (Appeals)-6, Kolkata [hereinafter referred to as 'Id. JCIT(A)', in short] dated 10.03.2026 against the order of assessment passed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 08.02.2020 by the Assessing Officer, CPC, Bengaluru (hereinafter referred to as 'Id. AO').

The only issue to be decided in this appeal is as to whether the learned NFAC was justified in confirming the action of the learned CPC in denying the claim of exemption under section 11 of the Act in the facts and circumstances of the instant case for non-filing of Form 10 .

I have heard the rival submissions and perused the materials available on record. The Assessee is a charitable trust duly registered under Section 12A of the Act. In the return of income filed by the Assessee for assessment year 2018-19, the Assessee claimed deduction under Section 11(2) of the Act for accumulation of income of Rs. 13,95,124 for which the Assessee was required to file Form No. 10 on or before the due date of filing the return of income under Section 139(1) of the Act. The Assessee based on the advice of a legal consultant, inadvertently filed Form No. 9A instead of filing Form No. 10. This was condoned by Learned Commissioner of Income Tax (Exemptions), Delhi vide order under section 119(2)(b) of the Act dated 22-11-2021. Accordingly, this Tribunal in the first round of proceedings in ITA No 504/Del/2021 dated 22-11-2022 had restored the appeal to the file of Learned CIT(A) for denovo adjudication in accordance with law. In the second round of proceedings, the Learned CITA found that it was not a case where Form No. 9A was required to be filed, but it was the case of filing of Form No. 10. On that ground, the Learned NFAC dismissed the appeal for non-filing of Form No. 10. The order of Learned NFAC was passed on 10-03-2026.

It is not in dispute that Assessee had indeed filed Form No. 10 belatedly on 07-05-2026, i.e. after the date of passing of order of learned NFAC. But I find that the same requires factual verification. Ultimately the action of the belated filing and wrong filing of prescribed form was already condoned by the Learned CIT (Exemptions) under section 119(2)(b) of the Act. Hence the Learned NFAC would not be justified in holding that the Form No. 10 was not filed by the Assessee in the instant case. Either way, it is only accumulation of income that is being sought by the Assessee trust in terms of section 11(2) of the Act. Considering the fact that the claim of accumulation of income was indeed made in the income tax return itself and in the audit report in Form 10B, the non-filing of Form 10 alone in time could not be the relevant factor in denying the claim of deduction under section 11(2) of the Act. Hence in the interest of substantial justice and fair play, I deem it fit and appropriate to restore this appeal to the file of the learned AO for denovo adjudication in accordance with law. I make it very clear that in the set aside assessment proceedings, the revenue shall not raise any objection with regard to the belated filing of Form No. 10 and purely adjudicate the issue on merits. Accordingly, the grounds raised by the Assessee are allowed for statistical purposes.

In the result, the appeal of the Assessee is allowed for statistical purposes.