Bhagini Mandal (trust) V. Principal Chief Commissioner of Income Tax

WP/2998/2025

AI Insights

The case involves Bhaqini Mandal, a charitable trust, which filed writ petitions against the Principal Chief Commissioner of Income Tax and the Income Tax Department, challenging the rejection of their applications for condonation of delay in filing Form 10-B for two assessment years. The trust argued that the delays were due to the illness of their Chartered Accountant, who underwent brain surgery, and highlighted their compliance in filing returns on time for the past 45 years. The Income Tax Department opposed the petitions citing the enormous delay. The court, referencing decisions from the Gujarat and Bombay High Courts, found in favor of the trust, emphasizing the need for an equitable approach in such cases involving public charitable trusts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 764348 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 17-02-2025
• Assessment Year: misc
• Other Referred Cases: Sarvoday Charitable Trust v. Income-tax Officer (Exemption), AI Jamia Mohammediyah Education Society v. Commissioner of Income-tax (Exemptions)
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: A REDDY
• Assessee Lawyers: HIMANGINI SANGHI
• Keywords: Charitable Trust; Condonation of delay; Income Tax; Natural Justice; Writ of Mandamus
• Section: 151; 226

Judgement Text

"[ 34461 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SEVENTEENTH DAY OF FFBRUARY TWQ THOUSAND ANP TWENTY FIVE PRESENT THE HONOURABLE TtlE AClll'lC chllEF JUSTICE SUJOY PAUL AND' THE HONQURABLE SMT JU$TICE RENUKA YARA RIT PETITIO N :2837 & 2998 0F 2025 .P.N .2837 0F 20 5 ,t:'9 AND 1 I J Between: Bhaqini Mandal (trust)' Road, Barkatpura, S.O Reo bv it president Mrs.Seema Hipplgaonkar O/o 4-1-8 Tilak Udmp'atty, HYderabad- 500027 ...PETITIONER Principal Chief Commissigner of lncomeTax, Norlh Biock' New Delhi The lncome Tax Department, lDeome Tax Departmgnt' Hy{erabad Assessment Unit, E.Ramp Jawaharlal Nehru Stadium New Delhi .,.RESPONDENTS 'Petition under Article 226 of the C9nstitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may bq pleased to issue a Writ of Mandamus o1 qny other appropriate Writ Order or Direction declaring the order passed bv the 1st Respondent in DIN and qrder Ng' ITBA/QoM/F/1712024-2511072127904(1)dated13-01-2025fortheAY2015.10 rejecting the Condqnation of delay applicqtion as arbitrary illegal bad in law' violativeoftheprinciplesofnaturaljusticeapartfrombeingviolativeofArticles l4,lggand265oftheCQnstitutionoflndiaandconsequentlysetasidethesamB ln the interests of .iustice. ,: 1r t- IA NO:1 0F 2025 Petltion under Siection 151 CPC praying that in the circumstances stated in the affidavit filed in s;upport of the petition, the High Court may be p pased plqqse direct the regpondenls to stay all fu(her proceedings' including any reQovqfy' pqrguant tq the qrder issued by t!\" tSt Regpondent' DIN and order !!fo' lTBtucoM/F/1 7t20242511072127.gQh(t ) Cated 13''01-2Q25' tor the fssessmen! Year 2Q15-16, pending disposal of the Main Writ fetition Counse! for lhe Petitioner : ME.HIMANGINI SANGHI Counsel for the Respondents: SRI A'RAM+KRISHNA REDOY' SC FOR lT DEPT 6* w.P.No.2998 OE 5 0 Between: BhaoiniManda|(tlust),RepbyltpresidentMrsS.e.e-maHipplgaonkarrf/o4.1-STilak Roaf . Barkatpura, S.(). Nampally, Hyderabad' 5UUuz/ ...PETlTlONER(S) AND 1. . Principal Chief Commissioner of income Tax, North Block' New Delhi 2. The lncome Tax Department, lncome Tax Departnrent' Hyderabad 3.AssessmenttJnit'RoomNo4Ql.2ndFloqr,E-RarlpJawaharlalNehru Siadium, New Delhi ...RESPONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court nray be pleased toissueaWritofMandamusoranyotherappropriate {ritordarorDirection declaring the orcjerr passed by the 1st Respondent in DIN and order No- lTBfuCoM/Fi171201|.4.2511072128180(1)dated13-01-2025fortheAY2014-15 rejecting the Condoration of delay application as arbitrary illegal bad in law' violative of the principles of natural justice apart from being violative of Articles :. J- -\"ar - -&,,, 14,199 and 265 of the constitution of lndia and consequently set aside the same in the interests of justice and to pass in the interest of justice. IA NO: 'l OF 2025 Petition un_dq( seqtion 151 CPC prqying that in the circumstances stated in the affi{pvit filed in Eupport of the petilion, the High cq-u( m4y be plgase{ plqagg direct the respondents tq stav all further proceqdings, including any tecovery, - --__':- -:r i pursuant tq lhe or{er issued by the '!et ResponQent, plN el9 o1.@er No ITBAiCQ[//E/17120e4-25t1072128180(1) datqd 1Q'01-2Q25, for the Aseessmenl Year 2014-15, Pelqlns diqpos4l of thq Main Wlit Pglitio.ry' Counsql for the Petitio[er : ME.H|MANGlNl SANGHI Counsel for lhe Reqponlents: SRI A.RAMAKRISHNA BEDDY' SC FPR lT DEPT The Cqurt nlade the following: cOMMoN ORPER &'r \" 'jt - lta! fl THE HONOURABLE THE ACTING CHIEF WSTICE SUJOY PAUL AND THE HONOURABLE SMT. JUSTICE RENUKA YARA WRIT PETITION Nos.2837 and.2998 of2O2$ COMMON ORDER: (Per Hon'ble The Acting Chief Justice) With tl-re consent finally heard. Ms. Himangrni Sanghi, learned coun s,e1 for the petitioner and Sri A. Ramakrishna Reddy, learned Standing Counsel for the Income Tax Department, for re spondents 2. Regard L,eing had to the similitude of the questio'rs involved I' on the joint request of the parties, these matters were analogously heard ald decicled by this common order. 3. In W.P.l os.2837 and 2998 of 2025, the orrlers dated 13.01.2025, vrhereby the applications frled for coni.onation of delay of 3198 zLnd 3533 days respectively in filing Fo':m 10-B of the Income Tax Act, 1961, pertaining to Assessment Years 2015- 16 and 20L4 15;, were rejected 4. Learned counsel for the petitioner submits that pretitioner is a charitable Trtrst. By placing reliance on additional affidavit, it is submitted that apart from the aforesaid two years, th,: petitioner submitted retllrns in time for last 45 years. The delzLy occurred because the Chartered Accountant of the petitioner's Trust was , t 2 '* ., unwell and has undergone brain surgery. In this backdrop, a lenient view should have been taken, when ample power was there with competent authority. The impugned rejection orders run contrary to the judgments of the Guj arat and Bombay High Courts 1n Sanrodaya Charitable Trust v. Income-tax Officer (Exemption)r and AI Jamia Mohammediyah Education Society v. Commissioner of Income-tax (Exemptionsf2 respectively. 5. Learned Standing Counsel for the Income Tax Department submits that in view of enormous delay on the part of the petitioner, no fault cal be found in the impugned orders. 6. The parties have confined their arguments tb the extent indicated above. 7. Learned counsel for the petitioner categorically pleaded that the petitioner is a charitable Trust and in last 45 years without there being any default, returns were filed. Thus, on two occasions if delay had occurred because of reasons beyond the control of the petitioner, a lenient view should have been taken. '1zozt1 t8 ttn-oL zs3 'lzozs; a8u ttn ar d'il ,- I k- .ral- -t ,; 3 8. The Gr-rj ar'rt High Court in SarvodaYa Charitable Trust (supra) recorded a's under: t'3o. We meLy also refer to and rely 'p9' t decision of the olit l nigtt'j,rurt in the case of G' V' Infosutions (P') Ltd v' 5\".\"iif?\",,\"tred in 12ole) 13 ITR-oL 164 (Delhi) ; l2()l9l ;di ;;;:;;; +42 tb.rhii' we mav quote the rerevant Jt,\"\"*^tion\" thus (page 17O of 13 ITR-OL) : \"8. l'he rejection of the petitioner's application under s,:ctitn 1l9{2}(b) is only on the ground tnal \".\".,t*g ,\" the Cliief Commissioner's opinion the pi. -,rr\" omission by the auditor was not i rt\",rlr,i.,.a This court has - diffrcultv to *a\"o,tma wfLat more plea qr proof: Tl: ?;=?slfl -.rf a f-,r:\"\" U-ught \"\" t\"tttd' t' r.]\"au\"i,\"\"-.\" ot-its-edy1!q. The net result .ol the ffi* \" ';;=-;__--r.-\"r i\" i,, \"rlect that the petitioner's clairn- of inadvertent mistake is sought to be .t rr \",,t\".i\"\"d as not bona frde The court is of the ooinion Lhat an assessee has to take leave of iLs \"!ns.s if it deliberately wishes .to follgo, .' substantial amount as the assessee ls ascrloeo LL) have in the circumstances of this case 'Bona fide' i\" ,-\" t. understood in the context of the circurnsLance of any case Beyond a plea oI the.sort the pelitioner raises (concededly belatedlyl' trlere ..t.i,t t-t\".\"\"sari1y te independent proof or \"I\"i\"r:af to establish that the auditor in fact acted without diligence. The petitioner did not urge any oth,,. 13aorr-rd\" such as illness of someone etc ' *trr\"it -.Ja reasonably have been substaltiated ;;\";l\";;J\"\"t material ln the circumstances of tt\" \"',,,t\", the petitioner, in our opinion' was able to sho,\"r, trona hde reasons why the refund claim could not be made in time. 9. ThLe statute for period of limitation prescribed in i.or.i\";o.t* of law meant to attach frnality' and in that sense are statutes of repose ; -however' *h\".\"'r\". the Legislature intends relief against ;;;;ri; i., \"\"\".\"= where such statutes lead.to ';;;i;i; =;,h. lor'\"\"..'ed authoritie s' including the n\".ra\"\". authorities have to construe th^em in a .\"l\"or-r\"Uf\" marrner. That was the effect - anc ;;;;;i of this court's decision in Indglonal il ll I 4 Investment arrd Finance Ltd. v. ITO [2012] S43 ITR a4 (Delhi). This court is of the opinion that a similar approach is to be adopted in th; circumstances of the case.,, 32. We.may also refer to the decision of this court in CIT v. Gujarat Oil and Allied Industries [19931 201 ITR 32S (cuj], wherein it is held that the provision regarding furnishine ;i audit report with the return has to be treated as a prgcedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. This court took the view that the benefit of exemption should not be denied merelv on account of delay in furnishing the same ana ii is permissible for the assessee to produce the audit report at a later stage either before the Income-tax Ofhcer or before the appellate authorit5r by assigning sufficient cause.,, (trmphasis Supplied) 9. The aforesaid judgment was considered by the Bombay High Court in AI Jamai Mohammediyah Education Society (supra) and it was held as under: 6. Ad oner has Admittedl mittedl /. y, the petiti the petitioner is a charitable trust. been hlins its returns and , for the t' form 10B for the assessment year 2015-2016 ) assessment vear 20 1 7 -2OlA to assessment year 2021-2022 within the due dates On this und alone, in our vieu the o delav contlonatron application should have been all,:wed because ttre failure to frle returns for the assessment vear 2076-20 t 7' ,:ould be onlv due to human error Even in the impugned o:rder, there is no alleqation of maia hdes. As held try the Gr,rjarat High Court in Saruodaya Chanta ble Ttustv. lTr) (Exemption) l(2O21 18 ITR-OL 253 (Guj); 2020 SCC Onl,ine Guj 3597; (2021 125 taxmann.com 75 (Guj).1 , the approach in the cases of the present type shou d be equitous, bzrlancing and judicious. Technically, strictll' and libera1ly speaking, respondent No. 1 might be justifir:d in denying the exemption by rejecting such condonation application, but an assessee. a public charitable trust with almost over thirty years, which otherwise satisfiesr the ndition for availing of such exemotion. should not be CO ! ! denied the same merelv on the bar of limitation especially when the Legislature has conferred wide discretionary powers to condone such delav on the authorities concerned. Paragraphs 3O and 3l of Saruodaya Chaitoble Tntst','. ITO (Exemptiort) l(2o21]r 1'8 ITR-OL 253 (Guj); 2020 SCC Online Guj 3597; (2021) 125 taxmann.com Z5 (Guj).] reacls as under (page 271 of 18 ITR-OL): \"3O. iVe may also refer to and rely upon a decision of the Delhi High Court in the case of G.V. Infostttion:; Put. t.td. v. Dg. CIT [(2019) 13 ITR-OL 164 (Delhi); 2019 SCC Onl-ine De1 6861; (2019) 1O:l taxmimn.com 397 (Delhi); (2019 261 Taxmart 48il (Delhi).] We may quote the relevant observation:; thus ipage 170 of 13 ITR-OL):...\" (trmphas s Supplied) 10. If the factua,l backdrop of the present case is considered, in the light of aforr:said judgments of the Guj arat and Borrbay High Courts, it will be clear like noon day that there is lot ol similarity amongst these matters. The petitioners before both the High Courts were also Charitable Trusts and delay was lccasioned because of compelling reasons. The Courts opinecl that the t I I 6 assessee is a public Charitable Trust and for last three decades have substantia,lly satisfred the conditions. Denial on the basis of bar of limitation is not justified. The case of the petitioner herein is somewhat on better footing because it has a record of compliance for 45 years. I 1. In this backdrop, both the Writ Petitions are allowed by setting aside the impugned rejection orders dated 13.01'2025 and consequently, the delay of 3198 and 3533 days respectively are condoned, The respondents are directed to proceed in accordance with law from that stage. There sha1l be no order as to costs' Miscellaneous applications, if any, pending shall stand closed' orr,rrtfi-I'*'lolt?ftEF / /ffRUE COPY'/ ECTION OFFICER To, The Principal Chief Commissioner of lncome Tax' North Block' New Delhi The lncome Tax Department' lncome Tax Depafiment Hyderabad The Assessment Unit' E-Ramp Jawaharlal Nehru Stadium' New Delhi One CC to Ms HIMANGINI SANGHI' Advocate tOPUCl One CQ to SBI A RAMAKRISHNA REDDY SC for lncome Tax Department loPucl 1. 2. 4. 5 6. Two CP CoPies BSK ,- L FS l l l I HIGH COURT DATED:17102t2025 COMMON ORDER WP.No.2837 & 2998 ot 2025 ALLOWING THE WRIT PETITIONS WITHOUT COSTS $f- ..14 ,' , ijl u ) at 2 0 t'Ait 2025 a T t cr-. B /\"b /L / -\"r'' 11 t j:. "