JAN SEVA MANDAL ,MUMBAI V. INCOME TAX OFFICER EXEMPTION WARD -1(4), MUMBAI

ITA 3445/MUM/2025

AI Insights

The case involves Jan Seva Mandal, a public charitable trust, which appealed against the denial of exemption under Section 11 of the Income Tax Act, 1961, due to the belated filing of the audit report in Form No. 10B. The Central Processing Centre (CPC), Bengaluru, initially denied the exemption citing a 29-day delay in filing the audit report, although the return of income was filed on time. The CIT(A) upheld the CPC's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal noted that the jurisdiction to condone the delay lies with the Principal Commissioner/Chief Commissioner of Income Tax, not with the CIT(A) or CPC, and thus restored the matter for fresh adjudication post the decision on the condonation application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711296 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2023-2024
• Other Referred Cases: Mirae Asset Foundation v. PCIT-6, Mumbai
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: KETAN PATEL
• Keywords: Condonation of delay; Reasonable cause; Question of law; Capital expenditure; Principle of natural justice; TDS; Competent authority; Charitable institution; Benefit of exemption; Procedural lapse
• Section: 11; 12; 119(2)(b); 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 3445/MUM/2025 Assessment Year: 2023-24 Jan Seva Mandal, Vinayalaya, Mahakali Caves Road, Andheri (East), Mumbai-400093. Vs. Central Processing Centre Income Tax Deparment, Bengaluru, Income Tax Officer Exemption Ward 1(4), Mumbai. 6th floor, MTNL TE Building, Pedder Road, Mumbai-400026. PAN NO. AAATJ 4868 K Appellant Respondent Assessee by : Mr. Ketan Patel Revenue by : Mr. Vivek Perampurna, CIT-DR Date of Hearing : 15/07/2025 Date of pronouncement : 22/07/2025 ORDER PER OM PRAKASH KANT, AM This appeal, at the instance of the assessee, is directed against the order dated 19.03.2025 passed by the Learned Additional/Joint Commissioner of Income Tax (Appeals) – 1, Lucknow [hereinafter “Ld. CIT(A)”], for the Assessment Year 2023–24. The assessee has raised multiple grounds challenging the denial of exemption under Section 11 of the Income-tax Act, 1961 (hereinafter “the Act”) by the Centralized Processing Centre (CPC), Bengaluru during processing of return under Section Printed from counselvise.com 143(1) of the Act on account of belated filing of the audit report in Form No. 10B. reproduced as under: 1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income [CIT(A)] erred in confirming the denial of exemption/ded resorted to by the Centralized Processing Centre, Income Tax Department, Bengaluru (herein after referred to as “CPC Return of Income under Section 143(1) of the Act on the grounds that the A filed belatedly, though with the Return of Income which was filed in prescribed time. 2. The learned CIT(Appeals) and the learned CPC failed to appreciate that the time limit prescribed for filing the Audit Report is only dec mandatory. The lower authorities failed to appreciate that delay in filing the Audit Report is only a procedural lapse and the same cannot be fatal leading to denial of exemption/benefits under Section 11 of the Act particularly when the s on record when the Return of Income was processed under Section 143(1) of the Act. 3. The learned CIT (Appeals) failed to appreciate the explanations/submissions furnished by the Appellant and the legal position emerging from th various High Courts/Income dealing with amended provisions of Section 12A(b) of the Act. 4. It is submitted that the denial of exemption under Section 11 of the Act, as discussed above, has led to denial of deductions of into huge demand of Rs. 18,25,840/ TDS refund of Rs. 1,05,613/ 1. A sum of Rs. 17,61,379/ Act being amount accumulated or set apart for application t stated objects of the trust to the extent it does not exceed 15 per cent of income derived from property held in trust. 2. A sum of Rs.33,00,000/ or set apart for specific purposes under read with section 11(5) of the Act. ITA No. 3445/MUM/2025 t of belated filing of the audit report in Form No. 10B. : On the facts and in the circumstances of the case and in law the learned Commissioner of Income- [CIT(A)] erred in confirming the denial of exemption/deductions under Section 11 of the Act resorted to by the Centralized Processing Centre, Income Tax Department, Bengaluru (herein after referred to as “CPC - ITD”) while processing the Return of Income under Section 143(1) of the Act on the grounds that the Audit Report in Form 10B was filed belatedly, though with the Return of Income which was filed in prescribed time. The learned CIT(Appeals) and the learned CPC failed to appreciate that the time limit prescribed for filing the Audit Report is only declaratory and not mandatory. The lower authorities failed to appreciate that delay in filing the Audit Report is only a procedural lapse and the same cannot be fatal leading to denial of exemption/benefits under Section 11 of the Act particularly when the said Audit Report was available on record when the Return of Income was processed under Section 143(1) of the Act. The learned CIT (Appeals) failed to appreciate the explanations/submissions furnished by the Appellant and the legal position emerging from the decisions of various High Courts/Income-tax Appellate Tribunals dealing with amended provisions of Section 12A(b) of It is submitted that the denial of exemption under Section 11 of the Act, as discussed above, has led to denial of deductions of the following amounts resulting into huge demand of Rs. 18,25,840/- after adjusting the TDS refund of Rs. 1,05,613/- against the Appellant: A sum of Rs. 17,61,379/- under section 11(1 )(a) of the Act being amount accumulated or set apart for application to charitable or religious purposes or for the stated objects of the trust to the extent it does not exceed 15 per cent of income derived from property held in trust. A sum of Rs.33,00,000/- being amount accumulated or set apart for specific purposes under section 11 (2) read with section 11(5) of the Act. Jan Seva Mandal 2 ITA No. 3445/MUM/2025 t of belated filing of the audit report in Form No. 10B. , which are On the facts and in the circumstances of the case and in -tax (Appeals) [CIT(A)] erred in confirming the denial of uctions under Section 11 of the Act resorted to by the Centralized Processing Centre, Income Tax Department, Bengaluru (herein after ITD”) while processing the Return of Income under Section 143(1) of the Act on udit Report in Form 10B was filed belatedly, though with the Return of Income which The learned CIT(Appeals) and the learned CPC - ITD failed to appreciate that the time limit prescribed for laratory and not mandatory. The lower authorities failed to appreciate that delay in filing the Audit Report is only a procedural lapse and the same cannot be fatal leading to denial of exemption/benefits under Section 11 of the Act aid Audit Report was available on record when the Return of Income was processed The learned CIT (Appeals) failed to appreciate the explanations/submissions furnished by the Appellant e decisions of tax Appellate Tribunals dealing with amended provisions of Section 12A(b) of It is submitted that the denial of exemption under Section 11 of the Act, as discussed above, has led to the following amounts resulting after adjusting the against the Appellant: under section 11(1 )(a) of the Act being amount accumulated or set apart for o charitable or religious purposes or for the stated objects of the trust to the extent it does not exceed 15 per cent of income derived from property being amount accumulated section 11 (2) Printed from counselvise.com 3. A sum of Rs.43,938/ Section 11(6) of the Act being the amount of capital expenditure incurred to be allowed as application of income. 6. It is submitted that the disallowances refe are unjustified and bad in law as the denial of exemption under Section 11 of the Act itself is ill unwarranted. It is submitted that on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in adjustments resorted to by the learned CPC the Return of Income under Section 143(1) of the Act. 7. It is submitted that the basic issue leading to denial of exemption under Section 11 of the Act viz. delay in filing the Form 10-B, itself is a highly debatable question of law and the same cannot be the ground for adjustment/additions/disallowances under Section 143(l)(a)/143(l) of the Act. It is submitted that the learned CPC adjustments without complying with the provisions of Section 143(1) of the Act. 2. Briefly stated, facts of the case are charitable trust, registered under the provisions of the Act, and filed its return of income for the assessment year under consideration on 29.11.2023 declaring total income at processed by the Assessing Off (CPC) under Section 143(1) of the Act and the total income was determined at ₹51,92,176. The CPC, while passing the said order, denied exemption under Section 11 of the Act, citing delay of 29 days in e-filing of the audit that although the due date for furnishing the return stood extended to 30.11.2023, the requirement under the law was that Form 10B be filed one month prior to such extended due date. The audit ITA No. 3445/MUM/2025 A sum of Rs.43,938/- under section 11 read with Section 11(6) of the Act being the amount of capital expenditure incurred to be allowed as application of income. It is submitted that the disallowances referred to above are unjustified and bad in law as the denial of exemption under Section 11 of the Act itself is ill unwarranted. It is submitted that on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) erred in adjustments resorted to by the learned CPC - ITD while processing the Return of Income under Section 143(1) of the Act. It is submitted that the basic issue leading to denial of exemption under Section 11 of the Act viz. delay in filing the B, itself is a highly debatable question of law and the same cannot be the ground for adjustment/additions/disallowances under Section 143(l)(a)/143(l) of the Act. It is submitted that the learned CPC - ITD has resorted to the stments without complying with the provisions of Section 143(1) of the Act. Briefly stated, facts of the case are the assessee is a public charitable trust, registered under the provisions of the Act, and filed its return of income for the assessment year under consideration on 29.11.2023 declaring total income at ₹86,859. The return was processed by the Assessing Officer at Central Processing centre (CPC) under Section 143(1) of the Act and the total income was 51,92,176. The CPC, while passing the said order, denied exemption under Section 11 of the Act, citing delay of 29 filing of the audit report in Form 10B. It is not in dispute that although the due date for furnishing the return stood extended to 30.11.2023, the requirement under the law was that Form 10B be filed one month prior to such extended due date. The audit Jan Seva Mandal 3 ITA No. 3445/MUM/2025 under section 11 read with Section 11(6) of the Act being the amount of capital expenditure incurred to be allowed as application of rred to above are unjustified and bad in law as the denial of exemption under Section 11 of the Act itself is ill-founded and It is submitted that on the facts and in the circumstances of the case confirming the ITD while processing It is submitted that the basic issue leading to denial of exemption Audit Report in B, itself is a highly debatable question of law and the same cannot be the ground for adjustment/additions/disallowances under Section ITD has resorted to the stments without complying with the provisions of Section the assessee is a public charitable trust, registered under the provisions of the Act, and filed its return of income for the assessment year under consideration on 86,859. The return was icer at Central Processing centre (CPC) under Section 143(1) of the Act and the total income was 51,92,176. The CPC, while passing the said order, denied exemption under Section 11 of the Act, citing delay of 29 report in Form 10B. It is not in dispute that although the due date for furnishing the return stood extended to 30.11.2023, the requirement under the law was that Form 10B be filed one month prior to such extended due date. The audit Printed from counselvise.com report was filed on 2 prescribed timeline. As a result, exemption under Sections 11(1)(a), 11(2), and 11(6) was disallowed and consequential adjustments were made under Section 143(1)(a) of the Act. 3. In appeal, the Ld. CIT(A) affirmed the CPC, holding that the audit report was not filed within the prescribed time as per Section 12A(1)(b) read with Rule 17B. The appellate authority, relying on CBDT Circular No. 16/2024 dated 18.11.2024, observed that the Assessin CIT(A) lacked jurisdiction to condone the delay in filing Form 10B and was advised to approach the jurisdictional Principal Commissioner or Chief Commissioner for condonation of delay under Section 119(2)(b) of the Act. CIT(A) is reproduced as under: “Decision: 6.1 The statement of facts, grounds of appeal, and the order appealed against have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised pertains to the sole issue of Section 12 of the Act while processing the return of Income under section 143(1) of the Act as Form 10B was not filed within the prescribed time limit. Therefore, all grounds of appeal are being clubbed and adjudicated together. 6.2 It is noted that while processing denied the adjustment u/s 143(1)(a) was done after providing the opportunity to the appellant. The reason for adjustment u/s 143(1)(a) are as follows: 6.3 The foreign contribution ente ITA No. 3445/MUM/2025 report was filed on 29.11.2023 and thus held to be beyond the prescribed timeline. As a result, exemption under Sections 11(1)(a), 11(2), and 11(6) was disallowed and consequential adjustments were made under Section 143(1)(a) of the Act. In appeal, the Ld. CIT(A) affirmed the adjustments made by the CPC, holding that the audit report was not filed within the prescribed time as per Section 12A(1)(b) read with Rule 17B. The appellate authority, relying on CBDT Circular No. 16/2024 dated 18.11.2024, observed that the Assessing Officer as well as the CIT(A) lacked jurisdiction to condone the delay in filing Form 10B and was advised to approach the jurisdictional Principal Commissioner or Chief Commissioner for condonation of delay under Section 119(2)(b) of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under: The statement of facts, grounds of appeal, and the order appealed against have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised pertains to the sole issue of denying the benefit of Section 11 & of the Act while processing the return of Income under section 143(1) of the Act as Form 10B was not filed within the prescribed time limit. Therefore, all grounds of appeal are being clubbed and adjudicated together. It is noted that while processing the return of Income, the AO exemption claimed u/s 11 and 12. The said adjustment u/s 143(1)(a) was done after providing the opportunity to the appellant. The reason for adjustment u/s 143(1)(a) are as follows: The foreign contribution entered at SI. No. B(iil) of Schedule Jan Seva Mandal 4 ITA No. 3445/MUM/2025 9.11.2023 and thus held to be beyond the prescribed timeline. As a result, exemption under Sections 11(1)(a), 11(2), and 11(6) was disallowed and consequential adjustments the adjustments made by the CPC, holding that the audit report was not filed within the prescribed time as per Section 12A(1)(b) read with Rule 17B. The appellate authority, relying on CBDT Circular No. 16/2024 dated g Officer as well as the CIT(A) lacked jurisdiction to condone the delay in filing Form 10B and was advised to approach the jurisdictional Principal Commissioner or Chief Commissioner for condonation of delay nt finding of the Ld. The statement of facts, grounds of appeal, and the order appealed against have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised denying the benefit of Section 11 & of the Act while processing the return of Income under section 143(1) of the Act as Form 10B was not filed within the prescribed time limit. Therefore, all grounds of appeal are being the return of Income, the AO exemption claimed u/s 11 and 12. The said adjustment u/s 143(1)(a) was done after providing the opportunity to the appellant. The reason for adjustment u/s No. B(iil) of Schedule Printed from counselvise.com VC by the trust or institution claiming exemption u/s 11 or 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in Form 10B at least one month prior to the due date for furnishing return u/s 139(1). However, th Audit Report in Form 10B within specified due date. Hence, Income chargeable to tax will be recomputed as per the provision of Section 13(10) or twenty second proviso to Section 10(23C) of the Income Tax Act as applicable. 6.4 The appellant submitted that the CPC ITD made significant adjustments under Section 143(1), disallowing amounts accumulated under Section 11 (1 )(a), Section 11(2), and capital expenditure claimed as income application, due to the late filing of Form 10B, the audit report, which was filed on 29.11.2023. The Appellant argued that this delay was due to genuine circumstances, including the complexity of accounting and the late release of the new Form 10B utility. Additionally, the Appellant highlighted that return processing and that filing delays are procedural and should not affect exemption claims. The Appellant asserted that denial of exemptions under Section 11 based on these procedural lapses violates natural justice, a unlawful. The Appellant requested that the disallowances be reversed, and exemptions granted, citing relevant legal precedents that allow for substantial compliance with procedural requirements. 6.4 The contention of the appel context, it's important to note that according to Section 12A(1)(b) and Rule 17B, Trusts are obligated to file Form 10B, which is mandatory. Form 10B can only be accessed and online and must be filed no later tha mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section 139(1) of the Act. 6.5 In the present case, the appellant submitted Form 10B on November 29, 2023, while th one month prior to the due date for submitting the Return. The due date for submitting the return in case of the appellant was October 31, 2023 which was further extended to November 30, 2023. There was a delay of 29 days Hence, Form 10B was not filed within the time frame outlined by the Act. 6.6 In view of the above, I find no error in the AO’s decision to disallow the appellant's claim for exemption under Section 11 ITA No. 3445/MUM/2025 VC by the trust or institution claiming exemption u/s 11 or 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in Form 10B at least one month prior to the due date for furnishing return u/s 139(1). However, the assessee has not E Audit Report in Form 10B within specified due date. Hence, Income chargeable to tax will be recomputed as per the provision of Section 13(10) or twenty second proviso to Section 10(23C) of the Income Tax Act as applicable. The appellant submitted that the CPC ITD made significant adjustments under Section 143(1), disallowing amounts accumulated under Section 11 (1 )(a), Section 11(2), and capital expenditure claimed as income application, due to the late filing , the audit report, which was filed on 29.11.2023. The Appellant argued that this delay was due to genuine circumstances, including the complexity of accounting and the late release of the new Form 10B utility. Additionally, the Appellant highlighted that Form 10B was available before the return processing and that filing delays are procedural and should not affect exemption claims. The Appellant asserted that denial of exemptions under Section 11 based on these procedural lapses violates natural justice, and the CPC ITD’s actions were unlawful. The Appellant requested that the disallowances be reversed, and exemptions granted, citing relevant legal precedents that allow for substantial compliance with procedural requirements. 6.4 The contention of the appellant has been considered. In this context, it's important to note that according to Section 12A(1)(b) and Rule 17B, Trusts are obligated to file Form 10B, which is mandatory. Form 10B can only be accessed and online and must be filed no later than the specified date mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section 139(1) of the Act. In the present case, the appellant submitted Form 10B on November 29, 2023, while the deadline for filing Form 10B was one month prior to the due date for submitting the Return. The due date for submitting the return in case of the appellant was October 31, 2023 which was further extended to November 30, 2023. There was a delay of 29 days in filing the Form 10B. Hence, Form 10B was not filed within the time frame outlined by In view of the above, I find no error in the AO’s decision to disallow the appellant's claim for exemption under Section 11 Jan Seva Mandal 5 ITA No. 3445/MUM/2025 VC by the trust or institution claiming exemption u/s 11 or 10(23C)(iv)/(v)/(vi)/(via) and is required to file audit report in Form 10B at least one month prior to the due date for furnishing e assessee has not E-filed the Audit Report in Form 10B within specified due date. Hence, Income chargeable to tax will be recomputed as per the provision of Section 13(10) or twenty second proviso to Section 10(23C) of The appellant submitted that the CPC ITD made significant adjustments under Section 143(1), disallowing amounts accumulated under Section 11 (1 )(a), Section 11(2), and capital expenditure claimed as income application, due to the late filing , the audit report, which was filed on 29.11.2023. The Appellant argued that this delay was due to genuine circumstances, including the complexity of accounting and the late release of the new Form 10B utility. Additionally, the Form 10B was available before the return processing and that filing delays are procedural and should not affect exemption claims. The Appellant asserted that denial of exemptions under Section 11 based on these procedural nd the CPC ITD’s actions were unlawful. The Appellant requested that the disallowances be reversed, and exemptions granted, citing relevant legal precedents that allow for substantial compliance with procedural lant has been considered. In this context, it's important to note that according to Section 12A(1)(b) and Rule 17B, Trusts are obligated to file Form 10B, which is mandatory. Form 10B can only be accessed and submitted n the specified date mentioned in Section 44AB of the Act, which is one month before the due date for submitting the Income Tax Return under Section In the present case, the appellant submitted Form 10B on e deadline for filing Form 10B was one month prior to the due date for submitting the Return. The due date for submitting the return in case of the appellant was October 31, 2023 which was further extended to November 30, in filing the Form 10B. Hence, Form 10B was not filed within the time frame outlined by In view of the above, I find no error in the AO’s decision to disallow the appellant's claim for exemption under Section 11 Printed from counselvise.com and 12 of the Act when process 143(1) of the Act. 7.1 Further, Section 119 empowers the Board to issue orders and guidelines regarding the condonation of delay in compliance with any provision of the Act. Section 119(2) reads as follows: Section 119(2) 1. 1….. 2. the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income being a Joint Commissioner (Appeals) or a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.\" 7.2 In this context, the Central Board of Direct Taxes (CBDT) issued Circular 16/2024 dated 18.11.2024. The relevant excerpts from the same are as follows: Sub: Condonation of delay under section 119(2)(b) of the Income 9A/10/10B/10BB for Assessment Year 2018 subsequent assessment years In supersession of all earlier Circulars/Instructions issued by the Central Board of Direct Taxes ('CBDT’) from time to time to deal with the applications fo in filing Form 9A/10/10B/1 OBB for Assessment Year 2018-19 and subsequent assessment years, the CBDT in exercise of the powers conferred under the Income Tax Act ('the Act’), authorizes: 1.1 the Pr. Commissioners Commissioners of Income Tax ('CsIT') to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1OB/IOBB for Assessment Year 2018 subsequent assessment years where there is a delay of upto 365 days. 1.2 the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief Commissioner of Income Tax ('CCsIT')/ Director Generals of ITA No. 3445/MUM/2025 and 12 of the Act when processing the return under Section 143(1) of the Act. Further, Section 119 empowers the Board to issue orders and guidelines regarding the condonation of delay in compliance with any provision of the Act. Section 119(2) reads as follows: Section 119(2) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income-tax authority, not being a Joint Commissioner (Appeals) or a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in dance with law.\" In this context, the Central Board of Direct Taxes (CBDT) issued Circular 16/2024 dated 18.11.2024. The relevant excerpts from the same are as follows: Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 9A/10/10B/10BB for Assessment Year 2018 subsequent assessment years - Reg. In supersession of all earlier Circulars/Instructions issued by the Central Board of Direct Taxes ('CBDT’) from time to time to deal with the applications for condonation of delay in filing Form 9A/10/10B/1 OBB for Assessment Year 19 and subsequent assessment years, the CBDT in exercise of the powers conferred under section 119(2)(b) of the Income Tax Act ('the Act’), authorizes: the Pr. Commissioners of Income Tax (Tr. CsIT’)/ Commissioners of Income Tax ('CsIT') to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1OB/IOBB for Assessment Year 2018 subsequent assessment years where there is a delay of upto 365 the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief Commissioner of Income Tax ('CCsIT')/ Director Generals of Jan Seva Mandal 6 ITA No. 3445/MUM/2025 ing the return under Section Further, Section 119 empowers the Board to issue orders and guidelines regarding the condonation of delay in compliance with any provision of the Act. Section 119(2) reads as follows: the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by tax authority, not being a Joint Commissioner (Appeals) or a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in In this context, the Central Board of Direct Taxes (CBDT) issued Circular 16/2024 dated 18.11.2024. The relevant Sub: Condonation of delay under section 119(2)(b) of ling of Form No. 9A/10/10B/10BB for Assessment Year 2018-19 and In supersession of all earlier Circulars/Instructions issued by the Central Board of Direct Taxes ('CBDT’) from time to r condonation of delay in filing Form 9A/10/10B/1 OBB for Assessment Year 19 and subsequent assessment years, the CBDT in section 119(2)(b) of of Income Tax (Tr. CsIT’)/ Commissioners of Income Tax ('CsIT') to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1OB/IOBB for Assessment Year 2018-19 and subsequent assessment years where there is a delay of upto 365 the Pr. Chief Commissioners of Income Tax (Tr. CCsIT’)/ Chief Commissioner of Income Tax ('CCsIT')/ Director Generals of Printed from counselvise.com Income Tax ('DGsIT’) to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for Assessment Year 2018 where there is a delay of more than 365 days. 2. The Pr. CCsIT/ CCsIT/ Pr. CsIT/ CsIT while entertaining such applications for condonation of delay in filing Form No. 9A/10/10B/1 OBB, shall satisfy themse was prevented by reasonable cause from filing such Forms before the expiry of the time allowed and the case is of genuine hardship on merits. 2.1 Further, in respect of Form No. 10, the Pr. CCsIT/ CCsIT/ Pr. CsIT/ CsIT that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in sub-section (5) of section 11 of the Act. 3. No application for condonation of delay in 9A/10/1 OB/1 OBB shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Author 4. The delegation of powers, as per para 1.1 & 1.2 of this Circular shall cover under section 119(2)(b) of the Act which are pending as on date of issue of this Circular. 7.3 It is evident from the CBDT the Act that the Assessing Officer (AO), Joint Commissioner of Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax (Appeals) [CIT(A)] do not have the authority under Section 119(2)(b) of the Income Tax Act to in filing Form 10B. 7.4 Therefore, neither the AO during return processing nor I, the JCIT(Appeals) i when finalizing the appeal, are empowered by the statute to entertain the appellant's condonation application for Form 10B. 7.5 The appellant has the option to approach the jurisdictional Commissioner of Income Tax, Chief ITA No. 3445/MUM/2025 Income Tax ('DGsIT’) to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for ssment Year 2018-19 and subsequent assessment years where there is a delay of more than 365 days. The Pr. CCsIT/ CCsIT/ Pr. CsIT/ CsIT while entertaining such applications for condonation of delay in filing Form No. 9A/10/10B/1 OBB, shall satisfy themselves that the applicant was prevented by reasonable cause from filing such Forms before the expiry of the time allowed and the case is of genuine hardship on merits. Further, in respect of Form No. 10, the Pr. CCsIT/ CCsIT/ Pr. CsIT/ CsIT as the case may be, shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in section (5) of section 11 of the Act. No application for condonation of delay in filing of Form No. 9A/10/1 OB/1 OBB shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Authority. The delegation of powers, as per para 1.1 & 1.2 of this Circular shall cover all such applications for condonation of delay under section 119(2)(b) of the Act which are pending as on date of issue of this Circular. i It is evident from the CBDT Circulars and Section 119(2)(b) of the Act that the Assessing Officer (AO), Joint Commissioner of Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax (Appeals) [CIT(A)] do not have the authority under Section 119(2)(b) of the Income Tax Act to grant condonation for the delay in filing Form 10B. Therefore, neither the AO during return processing nor I, the JCIT(Appeals) i when finalizing the appeal, are empowered by the statute to entertain the appellant's condonation application . The appellant has the option to approach the jurisdictional Commissioner of Income Tax, Chief Jan Seva Mandal 7 ITA No. 3445/MUM/2025 Income Tax ('DGsIT’) to admit and deal with applications for condonation of delay in filing Form No. 9A/10/1 OB/1 OBB for 19 and subsequent assessment years The Pr. CCsIT/ CCsIT/ Pr. CsIT/ CsIT while entertaining such applications for condonation of delay in filing Form No. lves that the applicant was prevented by reasonable cause from filing such Forms before the expiry of the time allowed and the case is of genuine Further, in respect of Form No. 10, the Pr. CCsIT/ CCsIT/ ay be, shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in filing of Form No. 9A/10/1 OB/1 OBB shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which ity. The delegation of powers, as per para 1.1 & 1.2 of this all such applications for condonation of delay under section 119(2)(b) of the Act which are pending as on date Circulars and Section 119(2)(b) of the Act that the Assessing Officer (AO), Joint Commissioner of Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax (Appeals) [CIT(A)] do not have the authority under Section grant condonation for the delay Therefore, neither the AO during return processing nor I, the JCIT(Appeals) i when finalizing the appeal, are empowered by the statute to entertain the appellant's condonation application The appellant has the option to approach the jurisdictional Commissioner of Income Tax, Chief Printed from counselvise.com Commissioner of Income Tax, or Principal Chief Commissioner of delay in filing Form 10B and to claim the benefits of Sections 11 and 12 of the Act. In view of the above, I find no merit in the current appeal and, as a result, dismiss the appeal. 4. We have heard rival submissions of the parties and perused the relevant materials on record. Before us, t assessee submitted that an application seeking condonation of delay in filing Form 10B had already been filed before the CIT (Exemptions). A copy of the said application dated 19.01.2024 is placed on record. It is the assessee’s cont despite being apprised of this fact, proceeded to dispose of the appeal without awaiting disposal of the condonation application. In support of his submission, the Ld. Counsel has relied upon the judgment of the Hon’ble Bombay High Foundation v. PCIT-6, Mumbai wherein the Hon’ble Court condoned the delay of 24 days in filing the form No. 10B which was rejected by the ld CIT(E) on the principle thatv approach of Authorities oughts balancing and judicious and availing exemption should not be denied merely on the bar of limitation. 4.1 In the present case, the limited controversy pertains to denial of exemption under Section 11 solely on the ground of delayed fil of Form No. 10B. It is not in dispute that the audit report was, in fact, filed before the date of return filing and was very much ITA No. 3445/MUM/2025 Commissioner of Income Tax, or Principal Chief Commissioner of Income Tax for the condonation of the delay in filing Form 10B and to claim the benefits of ections 11 and 12 of the Act. In view of the above, I find no merit in the current appeal and, as a result, dismiss the appeal.” We have heard rival submissions of the parties and perused the relevant materials on record. Before us, the Ld. Counsel for the assessee submitted that an application seeking condonation of delay in filing Form 10B had already been filed before the CIT (Exemptions). A copy of the said application dated 19.01.2024 is placed on record. It is the assessee’s contention that the CIT(A), despite being apprised of this fact, proceeded to dispose of the appeal without awaiting disposal of the condonation application. In support of his submission, the Ld. Counsel has relied upon the judgment of the Hon’ble Bombay High Court in -6, Mumbai (Writ Petition No. 713 of 2025), wherein the Hon’ble Court condoned the delay of 24 days in filing the form No. 10B which was rejected by the ld CIT(E) on the principle thatv approach of Authorities oughts to be of equitious, , balancing and judicious and availing exemption should not be denied merely on the bar of limitation. In the present case, the limited controversy pertains to denial of exemption under Section 11 solely on the ground of delayed fil of Form No. 10B. It is not in dispute that the audit report was, in fact, filed before the date of return filing and was very much Jan Seva Mandal 8 ITA No. 3445/MUM/2025 Commissioner of Income Tax, or Principal Chief Income Tax for the condonation of the delay in filing Form 10B and to claim the benefits of In view of the above, I find no merit in the current appeal and, as We have heard rival submissions of the parties and perused he Ld. Counsel for the assessee submitted that an application seeking condonation of delay in filing Form 10B had already been filed before the CIT (Exemptions). A copy of the said application dated 19.01.2024 is ention that the CIT(A), despite being apprised of this fact, proceeded to dispose of the appeal without awaiting disposal of the condonation application. In support of his submission, the Ld. Counsel has relied upon the Court in Mirae Asset (Writ Petition No. 713 of 2025), wherein the Hon’ble Court condoned the delay of 24 days in filing the form No. 10B which was rejected by the ld CIT(E) on the to be of equitious, , balancing and judicious and availing exemption should not be In the present case, the limited controversy pertains to denial of exemption under Section 11 solely on the ground of delayed filing of Form No. 10B. It is not in dispute that the audit report was, in fact, filed before the date of return filing and was very much Printed from counselvise.com available at the time of processing of the return. The delay in filing Form 10B was of 29 days. In light of the CBDT Circ 16/2024 (supra), the jurisdiction to condone such delay vests with the concerned Principal Commissioner/Chief Commissioner of Income Tax. 4.2 In our considered view, when the condonation application was already pending consideration before the com was incumbent upon the CIT(A) to defer the decision in appeal and await the outcome of such application. Proceeding to affirm the disallowance, without waiting for the adjudication of the condonation petition, has caused prejudice to t The Hon’ble Bombay High Court in has held that where delay is not inordinate and explanation is forthcoming, the benefit of exemption under Section 11 should not be denied solely on account of procedural non otherwise the conditions of the statute are fulfilled. 4.3 Respectfully following the binding precedent of the Hon’ble Bombay High Court and considering the CBDT Circular, we direct the jurisdictional Principal Commissioner/Chief Commissioner of Income Tax to examine and dispose of the assessee’s application for condonation of delay in filing Form 10B in accordance with law and upon being satisfied that the delay was occasioned by reasonable cause. ITA No. 3445/MUM/2025 available at the time of processing of the return. The delay in filing Form 10B was of 29 days. In light of the CBDT Circ 16/2024 (supra), the jurisdiction to condone such delay vests with the concerned Principal Commissioner/Chief Commissioner of considered view, when the condonation application was already pending consideration before the competent authority, it was incumbent upon the CIT(A) to defer the decision in appeal and await the outcome of such application. Proceeding to affirm the disallowance, without waiting for the adjudication of the condonation petition, has caused prejudice to the assessee. The Hon’ble Bombay High Court in Mirae Asset Foundation has held that where delay is not inordinate and explanation is forthcoming, the benefit of exemption under Section 11 should not be denied solely on account of procedural non otherwise the conditions of the statute are fulfilled. Respectfully following the binding precedent of the Hon’ble Bombay High Court and considering the CBDT Circular, we direct the jurisdictional Principal Commissioner/Chief Commissioner of Income Tax to examine and dispose of the assessee’s application for condonation of delay in filing Form 10B in accordance with law and upon being satisfied that the delay was occasioned by reasonable Jan Seva Mandal 9 ITA No. 3445/MUM/2025 available at the time of processing of the return. The delay in filing Form 10B was of 29 days. In light of the CBDT Circular No. 16/2024 (supra), the jurisdiction to condone such delay vests with the concerned Principal Commissioner/Chief Commissioner of considered view, when the condonation application was petent authority, it was incumbent upon the CIT(A) to defer the decision in appeal and await the outcome of such application. Proceeding to affirm the disallowance, without waiting for the adjudication of the he assessee. Mirae Asset Foundation (supra) has held that where delay is not inordinate and explanation is forthcoming, the benefit of exemption under Section 11 should not be denied solely on account of procedural non-compliance, if Respectfully following the binding precedent of the Hon’ble Bombay High Court and considering the CBDT Circular, we direct the jurisdictional Principal Commissioner/Chief Commissioner of Income Tax to examine and dispose of the assessee’s application for condonation of delay in filing Form 10B in accordance with law and upon being satisfied that the delay was occasioned by reasonable Printed from counselvise.com 4.4 We further restore the matter to the file of direction to adjudicate the appeal afresh after the competent authority disposes of the condonation application. The CIT(A) shall grant liberty to the assessee to place on record the final outcome of the said condonation request. 4.5 In view of the above, the grounds raised by the assessee are restored to the file of the with law. The grounds raised by the assessee are allowed for statistical purposes. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 22/07/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA No. 3445/MUM/2025 We further restore the matter to the file of the CIT(A) with a direction to adjudicate the appeal afresh after the competent authority disposes of the condonation application. The CIT(A) shall grant liberty to the assessee to place on record the final outcome of the said condonation request. view of the above, the grounds raised by the assessee are restored to the file of the ld CIT(A) for adjudication in accordance he grounds raised by the assessee are allowed for In the result, the appeal filed by the assessee is allowed for nounced in the open Court on 22/07/2025. Sd/- (KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Jan Seva Mandal 10 ITA No. 3445/MUM/2025 the CIT(A) with a direction to adjudicate the appeal afresh after the competent authority disposes of the condonation application. The CIT(A) shall grant liberty to the assessee to place on record the final outcome of view of the above, the grounds raised by the assessee are for adjudication in accordance he grounds raised by the assessee are allowed for In the result, the appeal filed by the assessee is allowed for /07/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "