Gujarat High Court
Shri Babubhai C Jariwala Charitable ... vs Central Board Of Direct Taxes (Ita Cell) on 16 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1023 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
==========================================================
Approved for Reporting Yes No
✔
==========================================================
SHRI BABUBHAI C JARIWALA CHARITABLE TRUST
Versus
CENTRAL BOARD OF DIRECT TAXES (ITA CELL) & ORS.
==========================================================
Appearance:
MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1
MS MAITHILI D MEHTA(3206) for the Respondent(s) No. 2,3
NOTICE SERVED BY DS for the Respondent(s) No. 1,2,3
==========================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 16/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. Hardik Vora for
the petitioner and learned Senior Standing
Counsel Ms. Maithili Mehta for the respondent.
2. Rule returnable forthwith. Learned Senior
Standing Counsel Ms. Maithili Mehta waives
service of notice of rule for and on behalf of
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
the respondent.
3. Considering the controversy arising in this
petition which is in narrow compass, with the
consent of the learned advocates for the
respective parties, the petition is taken up for
hearing today.
4. By this petition under Article 226/227 of the
Constitution of India, the petitioner has
challenged the Order dated 17.10.2023 passed by
the respondent under Section 119(2)(b) of the
Income Tax Act, 1961 (hereinafter referred to as
'the Act' for short) by which application
preferred by the petitioner for condonation of
delay caused in filing Form-10B of the Act was
rejected.
5. The brief facts leading to the filing of the
present writ petition are as under:
5.1 The petitioner is a registered Charitable
Trust engaged in various activities and
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
registered under the Bombay Trust Act, 1950 vide
Registration No. E/1736/SURAT with effect from
30.8.1979. The petitioner is also registered
under Section 12A of the Act with effect from
27.8.1984 and further registered under the
provisions of Section 12AA of the Act for
Assessment year 2023-24 to Assessment Year 2025-
5.2 It is the case of the petitioner that the
return of income along with Form-10 came to be
filed on 20.10.2018 for A.Y 2018-19 declaring
total income at 'NIL'. The return of income was
processed under Section 143(1) of the Act vide
order dated 26.9.2019 determining assessed income
at Rs.87,26,081/-. The intimation under Section
143(1) of the Act was issued on the e-filing
Portal on email ID "[email protected]". It
is the case of the petitioner that it is a
religious trust and does not require to use its
email ID for its routine operations and
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
objectives. Further, none of the Trustees
regularly access or operates this email address.
Therefore, the petitioner was completely unaware
of such intimation under Section 143 communicated
through email ID.
5.3 It is the case of the petitioner that they
had allotted the work of filing of various forms
and tax compliances to Chartered Accountant.
Thereafter, in the year 2022, the petitioner
changed its Auditors and conducted routine
compliance check wherein it came to the knowledge
of the petitioner that there was outstanding
demand of Rs.30,95,448/- for A.Y. 2018-19.
5.4 It is the case of the petitioner that upon
knowing the outstanding demand and reviewing the
Income Tax Return for Assessment Year 2018-19 on
e-filing portal and after taking the details of
the audit report and concerned Chartered
Accountant, it came to the knowledge of the
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
petitioner that along with Audit Report, Form 10B
had inadvertently not being filed by the
Chartered Accountant along with Income Tax
Return. On knowing the discrepancy, the
petitioner approached its previous Auditors who,
upon scrutinizing the details, confirmed the fact
that Audit report was signed and uploaded by the
concerned Chartered Account. However, due to
impending due dates and overwhelming workload, an
inadvertent oversight had occurred in not filing
Form 10B.
5.5 In these facts and circumstances of the case,
the petitioner immediately filed Form 10B on
18.10.2022 and subsequently on 4.11.2022, an
application for condonation of delay under
Section 119(2)(b) came to be preferred by the
petitioner before the respondent.
5.6 It was informed by the respondent to the
petitioner that as the delay in filing Form 10B
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
was more than 365 days, the delay condonation
application had to be filed before the
PCCIT/CCIT. Therefore, another application for
condonation of delay came to be preferred by the
petitioner under Section 119(2)(b) of the Act on
8.12.2022. In view of the application preferred
by the petitioner, the respondent issued a show-
cause notice on 22.9.2023, asking the petitioner
as to show cause as to why application for
condonation of delay should not be rejected. The
petitioner gave a response on 9.10.2023
explaining unintentional and oversight mistake of
the concerned Chartered Accountant. However, the
respondent rejected the plea of the petitioner to
condone the delay by way of interim order dated
17.10.2023 which is impugned in the present writ-
petition.
6. Learned advocate Mr. Hardik Vora for the
petitioner submitted that the petitioner is a
religious charitable trust, dedicated in running
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
Aadinath Jain Derasar for over 40 years and is
actively engaged in various activities aimed at
promoting the philosophy of Jainism. Petitioner
has filed Form 10 along with its return of income
for A.Y. 2018-19 on 20.10.2018. Further, the
details of audit report viz. name of CA,
membership no., name and PAN of audit firm and
date of report were duly mentioned in column J of
ITR. Having no detailed knowledge of filing in
taxation matters, the petitioner had allotted
work of all the tax compliances to its Chartered
Accountant and was under the bonafide belief that
all the tax compliances must have been made along
with filing of return.
6.1 It was further submitted by learned advocate
Mr. Vora that the petitioner changed the auditor
in the year of 2022 and while checking the
routine compliances, it was brought to trustees'
notice that huge demand of Rs. 30,95,448/- is
outstanding for A.Y. 2018-19. On perusal of the
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
same, it was observed that, old auditor had not
filed Form 10B along with Return of Income and
due to the such oversight, deductions claimed by
the petitioner trust were not allowed and huge
demand of Rs. 30,95,448/- was raised. On coming
to know about the same, the petitioner
immediately submitted Form 10B and also filed the
application for condonation of delay.
6.2 Learned advocate Mr. Vora further submitted
that regarding non-filing of Form 10B along with
the income tax return, the former Chartered
Accountant clarified that although the audit
report had been signed and was intended for
upload along with the return, due to
overwhelming workload involving audits and income
tax returns, inadvertently only income tax return
was uploaded before the due date. This mistake
resulted from an oversight and there was no
malicious intent behind the delay.
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
6.3 Learned advocate for the petitioner Mr. Vora
further submitted that the respondent has
rejected the application on the ground that as
the delay was of 1448 days, the petitioner had no
intention to comply and had a casual attitude.
The learned advocate for the petitioner submitted
that email address through which the intimation
u/s 143(1) of the Act was issued is not
frequently used by the petitioner. The petitioner
asserts that for the routine operations and
objectives of the trust, use of an email address
is not a necessity. As a result, since none of
the trustees or members regularly accesses this
email ID, no one within the organization was
aware of the intimation. It was only brought to
the attention of the trustees when the new
auditor conducted routine compliance checks.
7. Per contra, learned Senior Standing Counsel
Ms. Maithili Mehta for the respondent relying on
the affidavit-in-reply submitted that the
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
contention raised by the petitioner that the
mistake had occurred due to inadvertent mistake
of the Chartered Accountant which resulted into
delay of 1448 days, is not tenable inasmuch as
the petitioner had filed the audit report and the
consent form in all the preceding years.
Therefore, merely making an averment that there
is a huge delay of 3 years due to inadvertent
mistake of the Chartered Accountant is not
tenable. It was further submitted that merely
putting weight on Chartered Accountant would not
be a justifiable cause for delay in filing Form
10B. In wake of such submission, Ms. Mehta has
requested to dismiss the present writ-petition.
8. Therefore, the narrow controversy is whether
the respondent ought to have allowed delay
condonation application in filing Form-10B.
9. This Court in case of Navjeevan Charitable
Trust v. Commissioner of Income Tax (Exemption),
Ahmedabad in SCA No. 10353 of 2024 has
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
categorically observed that Circular No. 10 dated
22.5.2019 has given direction and specification
that Form 10B ought to have been obtained before
filing of the return of income so as to have
benefit of clause 4(i). Therefore, the authority
has wrongly considered the word 'filed' instead
of 'obtained'. This Hon'ble Court, in Para-9, has
observed as under:
"9. So as to decide the aforesaid question,
in our view, the relevant portion of Circular
No.10 dated 22nd May, 2019 deserves to be
quoted.
"3. Representations have been received
by the Board/field authorities stating
that Form No. 10B could not be filed
along with the return of income for AY
2016 17 and AY 2017-18. It has been
requested that the delay in filing of
Form No. 10B may be condoned.
Previously, vide instruction in F.No.
267/482/77-IT(part), dated 9-2-1978, the
CBDT had authorized the ITO to accept a
belated audit report after recording
reasons in cases where some delay he
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
occurred for reasons beyond the control
of the assessee.
4. Accordingly, in supersession of
earlier Circular/Instruction issued in
this regard, and with a view to expedite
the disposal of applications filed by
such trusts or institutions for
condoning the delay in filing Form No.
10B and in exercise of the powers
conferred under section 119(2) of the
Act, the Central Board of Direct Taxes
hereby directs that:
(i) The delay in filing of Form No. 10B
for AY 2016 17 and AY 2017-18, in all
such cases where the Audit Report for
the previous year has been obtained
before the filing of return of income
and has been furnished subsequent to the
filing of the return of income but
before the date specified under section
139 of the Act is condoned.
(ii) In all other cases of belated
applications in filing Form No. 10B for
years prior to AY 2018-19, the
Commissioners of Income-tax are
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
authorized to admit such applications
for condonation of delay under section
119(2)(b) of the Act. The Commissioners
will while entertaining such belated
applications in filing Form No. 10B
shall satisfy themselves that the
assessee was prevented by reasonable
cause from filing such application
within the stipulated time.
Further, all such pending applications
as well as applications received
henceforth shall be disposed off
preferably within three months from the
end of the month in which the
application is received."
9.1 Having considered the direction in clause
4(i), it appears that the Central Board of
Direct Taxes directed the authorities to
condone the delay caused in filing Form 10B
in the cases where the audit report for the
previous year has been obtained before filing
of return of income. However, the
interpretation made by the authority while
passing the impugned order would reveal that
the authority has held that Form 10B should
have been filed on or before 31st March,
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
2018. In our considered opinion, the
interpretation of the authority with regard
to clause 4(i) is ex facie fault. We say so
because as per the plain language of the
Circular No.10, CBDT, in no uncertain terms,
has directed that delay in cases where Form
10B obtained before filing of return of
income is specified, meaning thereby, Form
10B ought to have been obtained before filing
return of income so as to have the benefit of
clause 4(i), whereas while passing the
impugned order; instead of word "obtained",
the authority considered it as "filed".
Therefore, this being a basic factual
understanding and interpretation of the
Circular, in our view, based on such
interpretation; the impugned order cannot be
said to be in accordance with law and the
Circular No.10 dated 22nd May, 2019."
9. In view of the settled position laid down by
this Court, the petition deserves to be allowed
and is hereby allowed by quashing and setting
aside the impugned order dated 17.10.2023 passed
by the respondent under Section 119(2)(b)of the
Act with all other consequential and incidental
NEUTRAL CITATION
C/SCA/1023/2024 JUDGMENT DATED: 16/10/2025
undefined
reliefs. Rule is made absolute to the aforesaid
extent. No order as to costs.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE
