Bombay High Court
International Resources For Fairer ... vs Union Of India on 22 September, 2025
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2025:BHC-OS:16056-DB
4-WP-2893-2024.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2893 OF 2024
International Resources for Fairer
Trade through its trustees .. Petitioner
Versus
The Union of India and Ors. .. Respondents
Adv. Jas Sanghavi, a/w Adv. Suyog Bhave and Adv. Kshitij
Vishwanath i/b PDS Legal, for the Petitioner.
Adv. Dinesh R. Gulabani, for the Respondents.
CORAM: B. P. COLABAWALLA &
AMIT S. JAMSANDEKAR, JJ.
DATE: SEPTEMBER 22, 2025
P. C.
1. Rule. Respondents waive service. With the consent of the parties,
Rule made returnable forthwith and heard finally.
2. The above Writ Petition challenges the impugned order dated
9th November 2023, passed by Respondent No.2 (Commissioner of Income
Tax [Exemptions], Mumbai).
3. The short point in this Writ Petition is that the Petitioner seeks a
condonation of delay in e-verifying / accepting the audit report in Form
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No.10B, which was rejected by Respondent No.2, inter alia, on the ground
that no sufficient cause was shown for the aforesaid delay.
4. The Petitioner is a Public Charitable Trust established in the year
1995. The Petitioner received approval from Respondent No.2 under Section
12A/12AA on 9th May 1996.
5. As per Section 12A(b) of the Income Tax Act, 1961 (for short "IT
Act"), where the total income of the trust or institution as computed under
the IT Act without giving effect to the provisions of Sections 11 and 12 of the
IT Act exceeds the maximum amount which is not chargeable to income-tax
in any previous year, such trust or institution is required to get its books of
accounts audited and file the audit report in Form No.10B on or before the
due date for filing the Return under Section 139 of the IT Act.
6. During the year under consideration, the Petitioner also got its
accounts audited and obtained the audit report dated 20th May 2017 in Form
No.10B from its auditors. Further, by letter dated 20th May 2017, the said
audit report was filed with the learned Assistant Charity Commissioner,
Mumbai, in terms of the Bombay Public Trusts Act, 1950.
7. In the month of October 2017, at the time of filing the audit
report dated 20th May 2017 on the income tax portal, the Chartered
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Accountants of the Petitioner faced a technical error regarding the date of the
report. Consequently, the auditors issued another audit report dated 5th
October 2017 and uploaded the same on the income tax portal.
8. For the Assessment Year 2017-18, the due date of filing the
Income Tax Return was 30th October 2017. The Petitioner filed its Return of
Income on 27th October 2017, which was within time.
9. The problem has arisen, in the present case, because although
the auditors of the Petitioner had uploaded the audit report in time,
inadvertently, the said audit report in Form No.10B remained to be
accepted/verified by the Petitioner prior to filing the Return of Income, i.e.,
on or before 27th October 2017.
10. The Petitioner received an intimation under Section 143(1)(a) of
the IT Act dated 24th September 2018, denying the exemption of
Rs.1,11,89,380/- which was claimed by the Petitioner on the ground that the
Petitioner had not e-verified the audit report in Form No.10B within the
prescribed time.
11. The Petitioner, upon becoming aware of this inadvertent error of
not e-verifying the audit report, verified/accepted the audit report in Form
No.10B on 28th January 2019. Further, the Petitioner filed a revised Return
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of Income on 28th March 2019 claiming a deduction of Rs.1,11,89,380/-
under Section 11 of the IT Act.
12. The said revised Return was processed, and a fresh intimation
dated 2nd January 2020 was issued under Section 143(1) of the IT Act,
accepting the "Nil" income declared by the Petitioner in its Return of Income
and determining a refund of Rs.1,03,800/- payable to the Petitioner.
13. This apart, on 24th August 2023, the Petitioner filed an
application before Respondent No.2 seeking a condonation of 447 days delay
in uploading the audit report in Form No.10B, which was rejected by the
impugned order dated 9th November 2023.
14. We have heard Mr. Shah, the learned Senior Advocate appearing
on behalf of the Petitioner, as well as the learned Counsel Mr. Gulabani,
appearing on behalf of the Respondent.
15. The CBDT, vide its Circular No. 10/2019 dated 22nd May 2019,
authorised the Commissioners of Income Tax to consider and decide
applications for condonation of delay in filing Form No.10B for Assessment
Years prior to A.Y. 2018-19.
16. It is not in dispute that the delay in filing Form No.10B is 447
days. Respondent No. 2 has rejected the application of the Petitioner on the
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ground that the oversight of the accountant is responsible for filing the same,
does not constitute reasonable cause warranting a condonation of delay in
filing of Form No.10B.
17. Admittedly, in the present case, the Petitioner obtained the
original audit report on 20th May 2017 and the revised audit report on 5th
October 2017 and had also filed the same with the learned Assistant Charity
Commissioner, Mumbai. However, due to inadvertence and oversight, the
audit report remained to be filed prior to filing the Return of Income dated
27th October 2017. It is stated in the Petition that the said non-filing was due
to oversight on the part of the accountant responsible for the same. It is
further stated that the said accountant left the employment of the Petitioner
abruptly, due to which the non-filing did not come to the notice of the
Petitioner till the issuance of the intimation dated 24th September 2018. In
response to the above, on 28th January 2019, the Petitioner-Trust filed the
audit report in Form No.10B. Further, on 29th March 2019, the Petitioner
filed the revised return of income, once again, claiming the deduction under
Section 11 of the IT Act.
18. Admittedly, Petitioner is a charitable trust established more than
25 years ago and has been filing its Returns and Form No.10B for all years
prior to the A.Y. 2015-16 within the due dates. On this ground alone, in our
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view, delay condonation application should have been allowed because the
failure to upload the audit report prior to filing the return, despite obtaining
the same from the auditors well within time, could only be due to human
error.
19. Moreover, in our opinion, the Petitioner does not appear to have
been lethargic or lacking in bonafides in making the claim beyond the period
of limitation, which should have a relevance to the desirability and
expedience for exercising such power. We find that the observations in the
impugned order that the Petitioner's approach towards income tax
compliance is very casual and that the trust is a regular defaulter on the sole
ground that the Petitioner-Trust has revised its returns in the past, are
unsustainable.
20. It is pertinent to note that considering the above audit report,
the revised return filed by the Petitioners was processed and vide intimation
dated 2nd January 2020, a refund amount of Rs.1,03,800/- was determined
as payable to the Petitioner. Thus, the audit report filed by the Petitioner
belatedly was accepted and acted upon by the Respondents.
21. Further, we find that in the present case, if the delay is not
condoned, genuine hardship would be faced by the Petitioner inasmuch as
the exemption claimed by the Petitioner, and to which it would otherwise be
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entitled to because it is a Charitable Trust, would be denied on this technical
ground.
22. In these circumstances, we are of the view that Respondent No. 2
ought to have taken a justice-oriented approach rather than a pedantic one
and condoned the delay. On similar facts, in the cases of Sau Dwarkabai
Tai Karwa Charitable Public Trust v. Commissioner of Income
Tax (Exemption) [(2025) 174 taxmann.com 245 (Bombay)] and Al
Jamia Mohammediyah Education Society v. Commissioner Of
Income Tax [(2025) 482 ITR 41 (Bom.)] this Court had taken a similar
view and condoned the delay in filing Form No.10B. Further, the judgment in
the case of Al Jamia Mohammediyah Education Society (supra) was
subjected to a challenge before the Hon'ble Supreme Court, who dismissed
the SLP preferred by the Revenue. The order of the Hon'ble Supreme is
reported in 2025 (7) TMI 1316 - SC Order.
23. In view of the aforesaid discussion, we quash and set aside the
order dated 9th November 2023 passed by Respondent No.2 and condone
the delay in filing Form No.10B by the Petitioner and direct the Respondents
to accept the same.
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24. Rule is made absolute in the above terms, and the Writ Petition
is also disposed of in terms thereof. However, there shall be no order as to
costs.
25. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by fax
or email of a digitally signed copy of this order.
[AMIT S. JAMSANDEKAR, J.] [B. P. COLABAWALLA, J.]
SEPTEMBER 22, 2025
Darshan Patil
Signed by: Darshan Patil
Designation: PA To Honourable Judge
Date: 23/09/2025 11:55:43
