AI Structured Summary
Not yet generated for this judgment
Judgment
PER VIMAL KUMAR, JM:
Application for condonation of delay of 13 days in filing the appeal and the appeal filed by the assessee is against the orders dated 08.01.2026 of the Ld. Commissioner of Income Tax (Appeals) Addl/Joint(A)-1, Chennai [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of assessment orders dated 31.07.2025 passed by Ld. Assessing Officer/ CPC, Bengaluru, u/s 143(1) of the Act for assessment year 2020-21.
Brief facts of the case are the assessee filed Form 10B and ITR 7 belatedly by 13 days on 28.01.2021 due to critical illness and subsequent demise of its president Dr. Shashi Bhushan Mishra despite filing the return claiming exemption u/s 12AA of the Act. The ITR was processed u/s 143(1) of the Act on 30.11.2021 disallowing exemption which resulted in a tax demand of Rs. 20,36,274/-. Multiple rectification applications u/s 154 of the Act and condonation petition u/s 119(2)(b) of the Act were filed but rejected. Latest rectification order is dated 31.07.2025. Against order dated 31.07.2025, the appellant/assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 08.01.2026.
Being aggrieved, the appellant/assessee preferred appeal of condonation of delay of 13 days in filing the appeal and appeal.
Ld. Authorized Representative for appellant/assessee submitted that there is delay of 13 days in filing appeal due to illness and death of president of the assessee. The explanation does not smack of mala fides as appellant has not gained anything by not filing appeal within a period of limitation. Therefore, the delay of 13 days in filing present appeal is condoned.
Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) erred in dismissing the appeal and upholding the order of CPC denying exemption under sections 11 and 12 of the Act solely on the technical ground of delayed filing of Form 10B. The delay of 13 days in filing Form10B occasioned due to intensive treatment of Cancer of Chairperson Late Dr. Shashi Bhushan Mishra who later expired which constituted a reasonable cause warranty condonation u/s 119 of the Act and a liberal approach was required to be taken.
Ld. Departmental Representative relied on impugned order.
From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide impugned order dated 08.01.2026 dismissed the appeal confirming order of CPC denying exemption u/s 11 and 12 of the Act on the ground of delay filing of Form 10B. It is a material fact that the delay in filing Form 10B was due to illness, treatment of chairperson Sh. Shashi Bhushan Mishra who later on expired. The illness and treatment constituted sufficient cause warranty condonation of delay u/s 119 of the Act by taking liberal approach.
A co-ordinate Bench in order dated 18th February, 2026 in ITA No. 6442 to 6446/Del/2025 titled as Institute of Rehabilitation vs. Exemption, Ward 1(2) of ITAT, Delhi in para No. 5 observed as under:
“5.We find that as with regard to issue of delay in filing of Form No. 10B relevant to AY: 2017-18 to AY: 2020-21 the law is settled that directions are directory and there cannot be disallowance u/ s 11 & 12 of the Actfor non-filing of audit report in Form 10B, before due date. Hon'ble Supreme Court in CIT(Exemption) Vs. Anjana Foundation (2025) 178 taxman.com 658 (SC) P a g e |4 6 Appeals Institute of Rehabilitation (AYs: 2017-18 to 2021-22) has dismissed the SLP of the department on the ground of delay as well as merits thereby sustaining the impugned orders of the Tribunal and Hon'ble High Court of Gujarat wherein it was held that filing of Form 10B is procedural requirement.”
In view of above material facts and by following the judicial precedent, it is held that delay in filing Form 10B is a procedural requirement and there cannot be disallowance u/s 10 and 11 of the Act for non-filing of audit report in form 10B before due date. Resultantly, the impugned order being unsustainable is set aside and the matter is restored to the file of Ld. AO for afresh decision in accordance with law after affording a fair opportunity of hearing to the assessee.
The application for condonation of delay of 13 days in filing appeal is allowed and the appeal filed by the assessee is allowed for statistical purposes.