[Cites 17, Cited by 0]

Bombay High Court

Francis Xavier Church vs The Commissioner Of Income Tax on 18 February, 2026

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

2026:BHC-OS:4865-DB


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TRUSHA                             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TUSHAR
MOHITE                                   ORDINARY ORIGINAL CIVIL JURISDICTION
Digitally signed
by TRUSHA
TUSHAR MOHITE
Date: 2026.02.23
12:35:32 +0530
                                                 WRIT PETITION NO. 635 OF 2026
                   Francis Xavier Church                                       .. Petitioner

                            Versus

                   The Commissioner of Income Tax                              .. Respondents

                        Adv. Dinkle Hariya i/b Adv. Shruti Kalyanikar for the Petitioner.

                        Adv. Prathamesh P. Bhosle for Respondents.

                                                          CORAM:     B. P. COLABAWALLA &
                                                                     FIRDOSH P. POONIWALLA, JJ.

                                                          DATE:     FEBRUARY 18, 2026

                   P. C.

1. Rule. Rule made returnable forthwith. Learned Counsel for the

Respondents waives service. By consent of the parties, the Petition is taken

up for final disposal at the stage of admission.

2. The above Writ Petition challenges the legality and validity of the

impugned order dated 24.02.2025 passed by Respondent No.1,

Commissioner of Income - tax (Exemptions), Mumbai, under Section 119(2)

(b) of the Income-tax Act, 1961 ["the Act"], rejecting the application for

condonation of delay in filing Form No. 10 for Assessment Year 2015-16.

The Petitioner has also challenged the Intimation dated 22.10.2016 issued

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under Section 143(1) of the Act denying exemption under Section 11(2) of the

Act to the extent of Rs. 47,00,000/-; and the consequential failure to grant

exemption u/s. 11(2) of the Act.

3. The Petitioner is a public charitable trust registered under

Section 12A / 12AB of the Act since 1980. The Petitioner has been regularly

complying with various obligations for seeking exemption under Section 11 of

the Act for more than three decades, including regularly its filing return of

income, audit reports, Form 10, wherever applicable. The Petitioner has also

been consistently granted the benefit of exemption under Section 11 of the

Act over the years, resulting in Nil or negligible assessed income.

4. For Assessment Year 2015 - 16, the Petitioner filed its return of

income on 25.09.2015, within the time prescribed under Section 139(1) of the

Act, being 31.10.2015. The Petitioner thereafter filed its revised return of

income on 29.10.2015, which was also within the statutory time limit. In its

return of income, the Petitioner declared Nil income after claiming

accumulation under Section 11(2) to the extent of Rs. 47,00,000/-. Tax Audit

Report in Form No. 10B was filed on 25.09.2015 disclosing accumulation

under Section 11(2) of the Act. As such, the details of accumulation were

reflected in the return of income as well as the tax audit report.

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5. It is the Petitioner's contention that the Petitioner had filed Form

No. 10 physically on 30.09.2015 but it has no copy to support the claim on

account of the circumstances as narrated in the Petition.

6. Respondent No. 3 herein (Centralised Processing Centre), issued

an intimation under Section 143(1) of the Act on 22.10.2016 disallowing the

benefit of accumulation and adding the amount of such accumulation (Rs.

47,00,000/-) to the income of the Petitioner. Though no reason appears to

have been mentioned in such intimation, the Petitioner was given to

understand later on that the same was because Form No.10 was not filed

within the prescribed time (i.e. 31.10.2015). The Petitioner subsequently filed

Form No.10 electronically on 21.11.2016.

7. The Petitioner, thereafter, moved a rectification application

before Respondent No.3 on 20.12.2016. However, the same did not result in

grant of relief. Under the aforesaid circumstances, the Petitioner filed an

application before Respondent No.1 on 07.10.2020 for seeking condonation

of the delay in filing Form No. 10, under Section 119(2)(b) of the Act. This

application was rejected by Respondent No.1 vide his impugned order dated

24.02.2025 on the ground of absence of reasonable cause for the delay in

filing Form No. 10. Respondent No.1 has observed that there was a delay of

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423 days in filing Form No. 10. However, it is the Petitioner's case, that the

delay, if any, is of 387 days and not 423 days. Aggrieved by this impugned

order, the Petitioner has filed the present Petition.

8. We have heard Ms. Hariya, the learned Counsel appearing on

behalf of the Petitioner as well as Mr. Bhosle, the learned Counsel appearing

on behalf of Respondents.

9. For claiming the benefit of Section 11 (2) of the Act, the

Petitioner was required to file Form No. 10 (Statement of Accumulation).

However, Section 11(2) of the Act, as it stood for A.Y. 2015-16, did not

prescribe a time limit for filing Form No. 10. It was only in Rule 17 of the

Income Tax Rules, 1962 that the time-limit for filing Form No. 10 was

prescribed, i.e. before the expiry of time allowed under sub-Section (1) of

Section 139 for furnishing the return of income. However, by virtue of

Finance, Act 2015, the amendment to Section 11(2) of the Act statutorily

required filing of Form No. 10 on or before the due date under Section 139(1)

for furnishing of return of income. Consequential amendment to Rule 17

mandated electronic filing of Form 10. These requirements were mandated

only from A.Y. 2016-17.

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10. From the record, we find that the delay has been explained by

the Petitioner by stating that the delay has occurred due to Petitioner's

oversight and as the Petitioner was under the impression that Form No. 10

was physically filed within time. Moreover, due to unavoidable

circumstances, in the Covid - 19 pandemic, the Petitioner could utilize only

Rs. 2,28,467/- in A.Y. 2020 - 2021 out of the total accumulation of Rs.

47,00,000/- in A.Y. 2015-16. The balance unutilized amount of Rs.

44,17,533/- was offered to tax in the sixth year of accumulation under Section

11(3) of the Act. Thus, the disallowance of exemption in A.Y. 2015-16 would

lead to double taxation.

11. We derive support from the judgment of the Hon'ble Supreme

Court in CIT v. Nagpur Hotel Owners' Association, (2001) 247 ITR 201 (SC),

wherein it was held that furnishing of Form No. 10 before completion of

assessment constitutes sufficient compliance.

12. In any case, this Court, in several of its orders involving a similar

issue of delay in filing Form No. 10, post the amendment, has adopted a

liberal construction. Such Orders have been passed in :-

(a) Shree Jain Swetamber Murtipujak Tapagachha Sangh v. CIT (E)

[W.P. (L) No. 1321 of 2024, Order dated 27.03.2025]

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(b) KSB Care Charitable Trust v. CIT (E) [(2025) 178 taxmann.com

771 (Bom)]

(c) People's Mobile Hospitals v. CIT (E) [W.P. No. 2697 of 2025,

Order dated 15.09.2025]

(d) St. Anne's School v. CIT (E) [(2025) 180 taxmann.com 183

(Bom)]

13. We are also of the view that Respondent No.1 ought to have

taken a justice-oriented approach rather than a pedantic one and condoned

the delay. This is supported by a decision of this Court in the case of

Columbia Global Centre in India v. ITO (E) [W.P. (L) No. 23170 of 2025,

Order dated 07.10.2025], which held as under :

"This Court, in People's Mobile Hospitals v. CIT (E) (judgment dated 15 September 2025 in Writ Petition No. 2632 of 2025) has followed its earlier judgments in Mirae Asset Foundation v. Pr. Commissioner of Income-tax (judgment dated 7 July 2025 in WP No. 713 of 2025), Sau Dwarkabai tai Karwa Charitable Trust v.

Commissioner of Income-tax(E) (2025) 174 taxmann.com 245 (Bombay) and Kotak Family Foundation v. Commissioner of Income-tax (E) (2025) 176 taxmann.com 56 (Bombay) and condoned the delay. In these cases also, this Court was concerned with condonation of delay in filing of similar forms within the stipulated time while claiming exemption under Section 11 of the Act. Therein, reliance was also placed on a judgment of the Gujarat High Court in the case of Sarvodaya Charitable Trust v. ITO (E) (2021) 125 taxmann.com 75 laying down the principle that in cases like the present one, the approach of the authority ought

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to be equitious, balancing and judicious and availing of exemption should not be denied merely on the bar of limitation. This is more so when the Legislature has, under Section 119(2)(b) of the Act, conferred discretionary powers to condone the delay on the authorities concerned with a view to avoid genuine hardship."

14. Moreover, not condoning such delay would cause genuine

hardship to the Petitioner in as much as the Petitioner has been denied

exemption under Section 11 of the Act and a demand of Rs.14,07,930/- has

been raised for filing Form No. 10 belatedly.

15. Considering the facts and circumstances of the case, we are of the

view that the delay ought to be condoned. We accordingly quash and set aside

the impugned order passed under Section 119(2)(b) of the Act dated

24.02.2025 and condone the delay of 423 days in filing Form No. 10 for A.Y.

2015-16.

16. Since the delay has been condoned, the Respondents shall once

again process the Petitioner's return within a period of eight weeks from

today in accordance with law by giving effect to this order on the basis that