R.C.CHURCH OF ST. JOSEPHS,MUMBAI V. INCOME TAX OFFICER EXEMPTION WARD 2(2), MUMBAI

ITA 1268/MUM/2025

AI Insights

The case involves two separate appeals by R.C. Church of St. Josephs and R.C. School of St. Teresa's against the orders of the CIT(A)/NFAC, which denied them the application of income under section 11 of the Income Tax Act for not filing Form No. 10B (Audit report under section 12A(1)(b)) in time. The Tribunal considered the common grounds of appeal due to the similarity in facts and issues for the assessment years 2022-23 and 2023-24. The primary legal contention was whether the delay in filing Form 10B should be condoned and if the assessee should be allowed the benefits under section 11 despite the delay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652649 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2022-2023
• Other Referred Cases: Sarvodaya Charitable Trust vs. ITO(E), Social Security Scheme of GICEA vs. CIT(E), Association of Indian Panelboard Manufacturer vs. DCIT, Al-Jamia Mohammediya Education Society vs. CIT(Exemption), Karnataka Sangha vs. CIT(Exemption), Warkari Shikshan Sanstha vs. CIT(E), M/s. ArhamMitra Mandal vs. ITO, Snehasadan vs. ITO(E), The National Sodality Centre vs. ITO, Bhagwant Kishore Memorial Education Society vs. ITO(E), Kedar Nath Saraf Charity Trust vs. DDIT CPC, Bangalore, ITO Vs. P K Kirshnan Educational Trust
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: VASANTI B. PATEL
• Keywords: Condonation of delay; Rule of consistency; Charitable institution
• Section: 11; 119(2)(b); 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 1268/MUM/2025 (AY : 2022-23) (Physical hearing) R.C. Church of St. Josephs St. Joseph R.C. Church, Robert Road, Colaba, Mumbai – 400005. [PAN No. AAATR3519F] Vs ITO Exemption Ward-2(2), Mumbai Appellant / Assessee Respondent / Revenue ITA No. 2512/MUM/2025 (AY : 2023-24)) R.C. School of St. Teresa’s St. Joseph R.C. Church, Robert Road, Colaba, Mumbai – 400005. [PAN No. AAATR0581M] Vs ITO Exemption Ward-2(2), Mumbai Appellant / Assessee Respondent / Revenue Assessee by Ms. Vasanti B. Patel, Advocate Revenue by Shri Annavaram Kosuri, Sr. DR Date of institution of appeal 25.02.2025 & 11.04..2025 Date of hearing 17.06.2025 Date of pronouncement 17.06.2025 Order under section 254(1) of Income Tax Act PER BENCH: 1. These two appeals by two different assessees are directed against the separate orders of ld. CIT(A)/NFAC dated 23.10.2024 & 14.02.2025 for A.Y. 2022-23 & 2023-24 respectively. In both the appeals facts are common, the assessee has raised certain common ground of appeal, therefore, with the consent of parties both the appeals are clubbed, heard together and are ITA Nos. 1268 & 2512/Mum/2025 R.C. Church of St. Josephs & R.C. School of St. Teresa’s 2 decided by common order to avoid the conflicting decisions. For appreciation of facts, appeal for AY 2022-23 in ITA No. 1268/Mum/2025 is treated as a lead case. Though, the assessee has raised multiple grounds of appeal, however, in our considered view the substantial ground of appeal relates to application of income under section 11 of Income Tax Act which was not allowed by lower authorities for not furnishing Form No. 10B (Audit report under section 12A(1)(b) in time or within extended time. 2. Perusal of record shows that impugned order was passed by ld. CIT(A) on 30.10.2024, but this appeal is filed before Tribunal on 25.02.2025. Thus, there is delay of 56 days in filing appeal before Tribunal. The ld. AR of the assessee submits that assessee has already filed affidavit of Fr. Christopher D J Alvares, one of the trustee and authorised signatory of assessee trust. The ld. AR of the assessee submits that assessee is charitable-organisation engaged in the charitable activities. The delay in filing appeal is neither intentional nor deliberate. The delay is only of 56 days and mainly caused due to the fact that assessee was pursing remedy for condonation of delay section 119(2)(b) from the office of ld. CIT(E). The delay is not inordinate or excessive. The assessee has good case on merit and is liable to be succeed, if the matter is heard on merit. The ld. AR of the assessee submits that the lenient view may be taken and delay may be condoned in filing appeal. 3. On merits of the case, the ld. AR of the assessee further submits that in a series of decision by Tribunal and Higher Courts it has been held that delay in ITA Nos. 1268 & 2512/Mum/2025 R.C. Church of St. Josephs & R.C. School of St. Teresa’s 3 filing Form 10B, is liable to be condoned. It is also held in several decisions that even audit report / Form 10B filed before assessing officer can be considered as a sufficient compliance. The ld. AR of assessee submits that delay in filing Form-10B, may be condoned and assessing officer may be directed to allow benefit of section 11 to the assessee. In support of his submission, the ld. AR of the assessee relied upon the following decision:  Sarvodaya Charitable Trust vs. ITO(E) (2021) 125 taxmann.com 75 (Guj HC),  Social Security Scheme of GICEA vs. CIT(E) (2023) 147 taxmann.com 283 (Gujarat HC),  Association of Indian Panelboard Manufacturer vs. DCIT (2023) 157 taxmann.com 550 (Gujarat HC),  Al-Jamia Mohammediya Education Society vs. CIT(Exemption) (2024) 162 taxmann.com 114 (Bom),  Karnataka Sangha vs. CIT(Exemption) (2025) 171 taxmann.com 137 (Bom),  Warkari Shikshan Sanstha vs. CIT(E)92025) 171 taxmann.com 269 (Bom),  M/s. ArhamMitra Mandal vs. ITO ITA No. 1110/Bang/2023,  Snehasadan vs. ITO(E) ITA No. 2225/Mum/2024,  The National Sodality Centre vs. ITO ITA No. 2733/Mum/2024,  Bhagwant Kishore Memorial Education Society vs. ITO(E) (2024) 209 ITD 179,  Kedar Nath Saraf Charity Trust vs. DDIT CPC, Bangalore (2024) 207 ITD 161,  ITO Vs. P K Kirshnan Educational Trust (2024) 207 ITD 7. 4. On the other hand, ld. Sr. DR for the Revenue on the plea of condonation by delay submits that the bench may take decision as per law. On merit, the ld. Sr. DR for revenue submits that the assessee has not fulfilled the condition required by stature. The assessee was required to file Form-10B before filing return of income, once such condition was not complied; the assessee was rightly not allowed the application of income under section 11 of the Income Tax Act. ITA Nos. 1268 & 2512/Mum/2025 R.C. Church of St. Josephs & R.C. School of St. Teresa’s 4 5. We have considered the rival submissions of both the parties and have gone through the lower authorities carefully. Firstly, we are considering the plea of condonation of delay in filing the appeal. We find that there is delay of 56 days in filing appeal. The foremost plea of ld. AR of the assessee to condone the delay is that assessee was pursuing alternative remedy. Delay is not inordinate or excessive. Considering overall facts of the present case, we find that the delay in filing is not intentional or deliberate therefore, keeping in view, the principle of law that when technical consideration and cause of substantial justice are pitted against each other the cause of substantial justice may be preferred. Thus, keeping in view, the aforesaid principle the delay in filing appeal is condoned. 6. So far as merits of the case is concerned, we find that Assessing Officer/CPC as well as ld. CIT(A) not allowed application of income to assessee under section 11 of Income Tax Act for the want of filing of Form 10B before filing return of income. The assessee is having valid registration under section 12A/AB, such facts is otherwise not disputed by revenue. The only basis of disallowance of application of income under section 11, is filing Form-10B after filing return of income. We find that higher courts in a series of decision including Gujarat High Court in Social Security Scheme of GICEA vs CIT (supra) and in Association of Indian Panelboard Manufacturer vs. DCIT (supra) held that even when audit report was filed at later stage and same was available to the assessing officer when return was processed the assessee was ITA Nos. 1268 & 2512/Mum/2025 R.C. Church of St. Josephs & R.C. School of St. Teresa’s 5 entitled to exemption. Similar view has been followed in a series of decision of various benches of Tribunal. Thus, considering the fact that assessee has filed Form 10B on 07.11.2022, therefore, small delay of 31 days in filing Form 10B is condoned and matter is restored back to the file of jurisdictional assessing officer (JAO) to verify the fact and allow appropriate relief to the assessee for application of income under section 11. The assessee is also directed to provide complete details to the jurisdictional assessing officer. In the result, the grounds of appeal raised by assessee are allowed for statistical purpose. 7. In the result, the appeal of assessee is allowed for statistical purpose. ITA No. 2512/Mum/2025 for A.Y. 2023-24 8. As recorded above, the assessee has raised similar grounds of appeal as raised in appeal for AY 2022-23, which we have allowed for statistical purpose, thus, following the principle of consistency, this appeal is also allowed with similar direction. 9. In the result, both the appeals of the assessee are allowed for statistical purpose. Order pronounced in the open Court on 17/06/2025. S Sd/-/- PRABHASH SHANKAR ACCOUNTANT MEMBER - Sd/-/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated:17/06/2025 Biswajit ITA Nos. 1268 & 2512/Mum/2025 R.C. Church of St. Josephs & R.C. School of St. Teresa’s 6 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By order Assistant Registrar ITAT, Mumbai "