Sanathana Dharma Trust vs Commissioner Of Income Tax ...
2023 Latest Caselaw 1151 Ker

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                             PRESENT
              THE HONOURABLE MR. JUSTICE GOPINATH P.
    WEDNESDAY, THE 18TH DAY OF JANUARY 2023 / 28TH POUSHA, 1944
                      WP(C) NO. 1663 OF 2023
PETITIONER/S:
           SANATHANA DHARMA TRUST, REG. NO. 238/IV/2009, FIRST
           FLOOR,
           THANTHRI TOWER, DIWAN'S ROAD,
           ERNAKULAM, KOCHI , REPRESENTED BY ITS TRUSTEE
           -DR. CIJITH
           , PIN - 682016
           BY ADVS.
           K.I.MAYANKUTTY MATHER
           S.PARVATHI
           UTHARA ASOKAN


RESPONDENT/S:
     1     COMMISSIONER OF INCOME TAX (EXEMPTION)
           2ND FLOOR, SANJUAN TOWER,
           BEHIND CR BUILDING,
           ERNAKULAM NORTH P.O, KOCHI , PIN - 682018
     2     THE ADDITIONAL COMMISSIONER OF INCOME TAX (EXEMPTION)
           2ND FLOOR, SANJUAN TOWER,
           BEHIND CR BUILDING,
           ERNAKULAM NORTH P.O, KOCHI , PIN - 682018
     3     THE INCOME TAX OFFICER (EXEMPTION)
           2ND FLOOR, SANJUAN TOWER,
           BEHIND CR BUILDING,
           ERNAKULAM NORTH P.O, KOCHI , PIN - 682018
     4     INCOME TAX OFFICER
           NATIONAL E-ASSESSMENT CENTER,
           INCOME TAX DEPARTMENT, MINISTRY OF FINANCE,
           ROOM NO. 401, 2ND FLOOR, E-RAMP,
           JAWAHARLAL STADIUM, NEW DELHI, PIN - 110003
     5     THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX
           CENTRAL REVENUE BUILDING, I.S. PRESS ROAD,
           ERNAKULAM NORTH P.O., KOCHI
           , PIN - 682018
           BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA

          ADV. CHRISTOPHER ABRAHAM (SC)


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
18.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 1663 OF 2023                 2



                                JUDGMENT

Petitioner is a Charitable Trust entitled to exemption in

terms of the provisions contained in Section 80G(5)(vi) of the

Income Tax Act, 1961. It also has a registration under Section

12AA(1)(b)(i) of the Income Tax Act, 1961 as well as

registration on the Foreign Contribution (Regulation) Act, 2010

to accept foreign contributions to the Trust.

2. The petitioner has been filing regular returns of

income since the assessment year 2009-10 and has been

availing the benefit of exemption. For the assessment year

2018-19, petitioner has been denied exemption on the ground

that the petitioner failed to upload the audit report in Form

No.10B of the Income Tax Act. Petitioner, thereupon, filed an

application under Section 119(2)(b) of the Income Tax Act,

1961, for condonation of delay and for permission to upload the

audit report in Form No.10B of the Act for the assessment year

2018-19. The said application of the petitioner has been

rejected by Ext.P18 order and the said order is now under

challenge before this Court.

3. Learned Standing Counsel appearing for the

respondent department submits that there is absolutely no

illegality in Ext.P18 order and the 1 st respondent has properly

considered the application filed for condonation of delay and

has rejected the same on the ground that no proper

explanation for condonation of delay has been made by the

petitioner. It is submitted that the return of the petitioner, for

the assessment year 2018-19, was processed under Section

143(1) of the Income Tax Act and it was then noticed that the

petitioner had not uploaded the audit report in Form No.10B of

the Income Taxt Act, which is mandatory for claiming

exemption. It is submitted that the petitioner is, therefore, not

entitled to claim any exemption in respect of his income for the

assessment year 2018-19. However, it is very fairly pointed out

by the learned Standing Counsel that in terms of Circular

No.16 of 2022 dated 19.07.2022, the Central Board of Direct

Taxes has issued instructions in respect of failure to file audit

report in Form No. 10B of the Income Tax Act , in respect of

the assessment year 2018-19 and has directed that, for genuine

reasons, the delay may be condoned provided the delay is upto

a maximum period of three years. It is submitted that the audit

report for the assessment year 2018-19 was uploaded by the

petitioner on 31.03.2021 and therefore, the petitioner falls

within the terms of Circular No.16 of 2022.

4. Learned counsel appearing for the petitioner, in

reply, submits that there was genuine cause for failure to

upload audit report in Form No.10B of the Income Tax Act as is

evident from a reading of Ext.P18 order itself. It is submitted

that the reason is genuine and therefore, the delay ought to

have been condoned in terms of the instructions contained in

Circular No.16 of 2022 dated 19.07.2022.

5. Having heard the learned counsel appearing for the

petitioner and the learned Standing counsel appearing for the

respondent-Department, I am of the view that since the

petitioner has uploaded its audit report in Form No.10B of the

Income Tax Act, on 31.03.2021, the same was within the

period specified in the aforesaid Circular No.16 of 2022, which

to the extent it is relevant, reads as follows:-

''In exercise of the powers conferred under section 119(2) of the Income-tax Act, 1961 (hereinafter referred to as 'Act'), the Central Board of Direct Taxes (CBDT) by Circular NO.2 /2020 [F.No.197/55/2018-ITA-I] dated 03.01.2020 authorized the Commissioners of Income-tax to admit applications of condonation of delay in filing Form No. l0B for AY 2018-19 or for any subsequent Assessment Years where there is delay of upto 365 days and decide on merits.

2. Further to the powers delegated to Commissioners of Income-tax as discussed above, the CBDT hereby directs that where there is delay of beyond 365 days upto three years in filing Form No. 10B for Assessment Year 2018- 19 or for any subsequent Assessment Years, the Pr. Chief Commissioners of Income-tax/Chief Commissioners of Income-tax are authorized to admit such applications of condonation of delay under section 119(2) of the Act and decide on merits.

3. The Pr. Chief Commissioner/Chief Commissioner or Commissioners of Income-tax, as the case may be, while

entertaining such applications for condonation of delay in filing Form No. l0B, shall satisfy themselves that the applicant was prevented by reasonable cause from filing such Form within the stipulated time.''

The reasons stated by the petitioner for delay in uploading the

audit report also, in my view, qualifies for the condonation of

delay as specified in Circular No.16 of 2022.

6. In the light of the above finding, Ext.P18 is quashed.

The application for condonation of delay filed by the petitioner

(Ext.P13) shall be reconsidered in the light of the stipulations

contained in Circular No.16 of 2022 dated 19.07.2022, issued

by the Central Board of Direct Taxes and taking into

consideration the observations contained above. Any demand

pursuant to the assessment order issued for the assessment

year 2018-19, shall be kept in abeyance till the matter is

reconsidered as above. The 1 st respondent shall endeavour to

reconsider the matter and pass fresh orders within a period of

three months from the date of receipt of a certified copy of this

judgment.

The writ petition is disposed of as above.

sd/-

GOPINATH P., JUDGE ajt

APPENDIX OF WP(C) 1663/2023

PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE PROCEEDINGS OF THE COMMISSIONER INCOME TAX -I, KOCHI DATED 27.03.2013 GRANTING REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. Exhibit P2 A TRUE COPY OF THE APPROVAL GIVEN BY THE COMMISSIONER OF INCOME TAX -I, KOCHI DATED 29.11.2013 UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT, 1961 Exhibit P3 A TRUE COPY OF THE REGISTRATION CERTIFICATE OBTAINED FROM THE MINISTRY OF HOME AFFAIRS, FOREIGNERS DIVISION (FCRA WING), NEW DELHI DATED 07.09.2020 Exhibit P4 A TRUE COPY OF THE RETURN FILED FOR AY-2017-

18 DATED 30.03.2018 ALONG WITH AUDIT REPORT IN FORM 10B DATED 30.09.2017 Exhibit P5 A TRUE COPY OF THE ACKNOWLEDGMENT OF FILING OF RETURN DATED 17.02.2022 ALONG WITH FORM 10B AUDIT REPORT DATED 15.02.2022 FOR AY- 2021-22 Exhibit P6 TRUE COPY OF THE ACKNOWLEDGMENT OF FILING OF RETURN DATED 06.10.2022 ALONG WITH FORM 10B AUDIT REPORT DATED 06.10.2022 FOR AY- 2022-23 Exhibit P7 TRUE COPY OF THE RETURN FILED BY THE PETITIONER ONLINE FOR THE AY-2018-2019 DATED 31.03.2019 Exhibit P8 TRUE COPY OF THE AUDIT REPORT IN FORM 10B DATED 30.9.2018 FOR AY-2018-2019 Exhibit P9 TRUE COPY OF THE COMMUNICATION ISSUED BY THE ASSISTANT DIRECTOR OF INCOME TAX, CPC TO THE PETITIONER DATED 23.02.2021 Exhibit P10 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 3RD RESPONDENT DATED 09.07.2021 Exhibit P11 TRUE COPY OF THE ONLINE RESPONSE GIVEN BY THE PETITIONER TO EXT.P10 Exhibit P12 TRUE COPY OF THE FIRST REMINDER NOTICE (ONLINE) DATED 08.09.2021 ISSUED BY THE 3RD RESPONDENT Exhibit P13 TRUE COPY OF THE REQUEST FOR CONDONATION OF DELAY PUT IN BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 15.09.2021 Exhibit P14 TRUE COPY OF THE CIRCULAR NO.10/2019 (F.NO.197/55/2018/-ITA-1) DATED 22.05.2019

Exhibit P15 TRUE COPY OF THE CIRCULAR NO.2/2020 (F.NO.197/55/2018/-ITA-1) DATED 03.01.2020 Exhibit P16 TRUE COPY OF THE COMMUNICATION OF THE 1ST RESPONDENT TO THE PETITIONER DATED 22.10.2021 Exhibit P17 TRUE COPY OF THE ONLINE ACKNOWLEDGMENT EVIDENCING SUBMISSION OF THE DOCUMENTS BY THE PETITIONER DATED 22.10.2021 Exhibit P18 TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDENT DATED 06.12.2022