Our professional body has always claimed s.10(23A). We realised mid-assessment that we needed s.11 and filed Form 10 late. Can the Commissioner refuse to condone the delay?
Not on the reasoning used here. The Delhi High Court set aside the Commissioner's refusal, holding that the explanation offered — that the body's officials had not noticed the amendments to ss.11 and 13 made by the Finance Act 2015 with effect from 1 April 2016 — was not one there was reason to disbelieve, and that no benefit could accrue to the body from delaying. The failure to claim accumulation in the return cannot itself be read as showing an intention not to file Form 10.
Decided by the High Court (Rajiv Shakdher J and Girish Kathpalia J) on 2024-01-05, reported as W.P.(C) 4330/2019 (Delhi High Court). It bears on section 10(23A), section 11, section 11(2), section 12A, section 119(2)(b) of the Income Tax Act 1961, in Capital Gains Exemptions, Charitable Trusts & Exemption and Appeals matters.
The useful thing here is not the condonation principle but what it exposes about s.10(23A). A body notified under s.10(23A) is not exempt on everything: the clause carves out income from house property, income received for rendering any specific services, and income by way of interest or dividends on investments. That is why the Bar Council of India also holds s.12A registration and why, when the s.11 machinery changed, it had to switch its claim and file Form 10. Any professional body relying on a s.10(23A) notification should assume that a substantial part of its receipts falls outside the clause and must be sheltered, if at all, under s.11 with the accumulation and Form 10 discipline that goes with it. The judgment is also a clean statement that a Commissioner refusing condonation under s.119(2)(b) must identify the material behind his 'reasons to believe', and it collects the CBDT circulars on belated Forms 9A and 10 — 7/2018 for AY 2016-17, 30/2019 for AY 2017-18, 3/2020 authorising Commissioners for delays up to 365 days, and 17/2022 extending that to three years for AY 2018-19.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner is the apex professional body created under the Advocates Act 1961 to regulate legal education and the profession. Registered under s.12A, its income from members' fees, legal reform and education had been exempt under s.10(23A) since 1 April 1962 and it filed returns regularly. For assessment year 2016-17 it filed its return on 30 September 2016 claiming s.10(23A). Sections 11 and 13 had been amended by the Finance Act 2015 with effect from 1 April 2016, which its officials did not notice; the mistake surfaced during assessment. On 12 December 2018 it filed a revised computation claiming s.11, on 17 December 2018 it filed Form 10 with an application to condone the delay, and on 28 December 2018 it asked for that application to be decided before 31 December 2018. The Assessing Officer completed the assessment on 30 December 2018 without considering the claim, and by order dated 30 January 2019 the Commissioner (Exemption) rejected the condonation application, holding that the petitioner had no intention of filing Form 10 within the due date and was not prevented by reasonable cause. Delays in filing Form 10 for AYs 2017-18 and 2018-19 had been condoned on similar grounds.
The petition was allowed. The order dated 30 January 2019 was set aside, the delay in submitting Form 10 was condoned, and it was directed that Form 10 be accepted with the necessary consequences to follow (paras 9 and 10).
The Court rejected the Revenue's objection that no accumulation had been claimed under s.11(2) or in Form 10 in the return, holding that the claim of accumulation can always be considered once the delay is condoned and Form 10 is taken on record (para 4). It then found the impugned order silent on what the 'reasons to believe' were that led the Commissioner to conclude that the petitioner did not intend to file Form 10 in time, and held that mere failure to claim accumulation cannot be read as such a reason (para 6). It set out CBDT Circular No. 7/2018 dated 20 December 2018, which authorised Commissioners to admit belated Forms 9A and 10 for AY 2016-17 — the first year of e-filing of those forms — on satisfaction of reasonable cause, and the later Circulars 30/2019, 3/2020 and 17/2022 (paras 7 to 7.2), and noted that the same relief had been granted to the petitioner for AYs 2017-18 and 2018-19 (para 8). Since AY 2016-17 was the first year after the amendments and there was no reason to disbelieve the explanation, and no benefit could accrue to the petitioner from delaying, the discretion had not been correctly exercised (para 9).
Mere failure to claim accumulation cannot be read as "reasons to believe" that the petitioner did not intend to file Form 10.
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Handle my notice → Ask a CA on WhatsAppNot on the reasoning used here. The Delhi High Court set aside the Commissioner's refusal, holding that the explanation offered — that the body's officials had not noticed the amendments to ss.11 and 13 made by the Finance Act 2015 with effect from 1 April 2016 — was not one there was reason to disbelieve, and that no benefit could accrue to the body from delaying. The failure to claim accumulation in the return cannot itself be read as showing an intention not to file Form 10. This was decided by the High Court (Rajiv Shakdher J and Girish Kathpalia J) and bears on section 10(23A), section 11, section 11(2), section 12A, section 119(2)(b) of the Income Tax Act 1961. It is reported as W.P.(C) 4330/2019 (Delhi High Court). The useful thing here is not the condonation principle but what it exposes about s.10(23A). A body notified under s.10(23A) is not exempt on everything: the clause carves out income from house property, income received for rendering any specific services, and income by way of interest or dividends on investments. That is why the Bar Council of India also holds s.12A registration and why, when the s.11 machinery changed, it had to switch its claim and file Form 10. Any professional body relying on a s.10(23A) notification should assume that a substantial part of its receipts falls outside the clause and must be sheltered, if at all, under s.11 with the accumulation and Form 10 discipline that goes with it. The judgment is also a clean statement that a Commissioner refusing condonation under s.119(2)(b) must identify the material behind his 'reasons to believe', and it collects the CBDT circulars on belated Forms 9A and 10 — 7/2018 for AY 2016-17, 30/2019 for AY 2017-18, 3/2020 authorising Commissioners for delays up to 365 days, and 17/2022 extending that to three years for AY 2018-19. If it applies to you, the first step is this: Read your s.10(23A) notification against the three carve-outs in the clause and identify which receipts it does not cover; that is the income you must protect under s.11 or s.12.
The petitioner is the apex professional body created under the Advocates Act 1961 to regulate legal education and the profession. Registered under s.12A, its income from members' fees, legal reform and education had been exempt under s.10(23A) since 1 April 1962 and it filed returns regularly. For assessment year 2016-17 it filed its return on 30 September 2016 claiming s.10(23A). Sections 11 and 13 had been amended by the Finance Act 2015 with effect from 1 April 2016, which its officials did not notice; the mistake surfaced during assessment. On 12 December 2018 it filed a revised computation claiming s.11, on 17 December 2018 it filed Form 10 with an application to condone the delay, and on 28 December 2018 it asked for that application to be decided before 31 December 2018. The Assessing Officer completed the assessment on 30 December 2018 without considering the claim, and by order dated 30 January 2019 the Commissioner (Exemption) rejected the condonation application, holding that the petitioner had no intention of filing Form 10 within the due date and was not prevented by reasonable cause. Delays in filing Form 10 for AYs 2017-18 and 2018-19 had been condoned on similar grounds. The matter was decided on 2024-01-05 by the High Court (Rajiv Shakdher J and Girish Kathpalia J). On those facts the High Court held as follows. The petition was allowed. The order dated 30 January 2019 was set aside, the delay in submitting Form 10 was condoned, and it was directed that Form 10 be accepted with the necessary consequences to follow (paras 9 and 10).
The Court rejected the Revenue's objection that no accumulation had been claimed under s.11(2) or in Form 10 in the return, holding that the claim of accumulation can always be considered once the delay is condoned and Form 10 is taken on record (para 4). It then found the impugned order silent on what the 'reasons to believe' were that led the Commissioner to conclude that the petitioner did not intend to file Form 10 in time, and held that mere failure to claim accumulation cannot be read as such a reason (para 6). It set out CBDT Circular No. 7/2018 dated 20 December 2018, which authorised Commissioners to admit belated Forms 9A and 10 for AY 2016-17 — the first year of e-filing of those forms — on satisfaction of reasonable cause, and the later Circulars 30/2019, 3/2020 and 17/2022 (paras 7 to 7.2), and noted that the same relief had been granted to the petitioner for AYs 2017-18 and 2018-19 (para 8). Since AY 2016-17 was the first year after the amendments and there was no reason to disbelieve the explanation, and no benefit could accrue to the petitioner from delaying, the discretion had not been correctly exercised (para 9). In the words reproduced by the source cited on this page: "Mere failure to claim accumulation cannot be read as "reasons to believe" that the petitioner did not intend to file Form 10."
It was decided by the High Court on 2024-01-05 and is reported as W.P.(C) 4330/2019 (Delhi High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 10(23A), section 11, section 11(2), section 12A, section 119(2)(b), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The petition was allowed. The order dated 30 January 2019 was set aside, the delay in submitting Form 10 was condoned, and it was directed that Form 10 be accepted with the necessary consequences to follow (paras 9 and 10). It arises in Capital Gains Exemptions, Charitable Trusts & Exemption and Appeals matters, on section 10(23A), section 11, section 11(2), section 12A, section 119(2)(b) of the Income Tax Act 1961, and was decided by Rajiv Shakdher J and Girish Kathpalia J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If you are switching from a s.10(23A) claim to a s.11 claim, file the revised computation and Form 10 together with the condonation application, and ask for the condonation to be decided before the assessment is completed — the failure to do so is what caused the damage here. In the condonation application, name the specific amendment that was missed and the assessment year that was the first to fall after it; a general plea of oversight is weaker than a dated one. Cite any earlier year in which the same Commissioner condoned the same kind of delay on the same facts; that consistency point was the assessee's main argument and it worked. Put the relevant CBDT circular in front of the Commissioner and check which one covers your year and length of delay before assuming he lacks the power.
Searched for later treatment; none was found. That is not the same as a source affirming it. A citator search on citedby:6659965 returns nothing. A second search for "Bar Council of India" with "10(23A)" returns 13 documents, none of which cites the 5 January 2024 judgment; the Supreme Court entries returned are unrelated. No later decision applies, doubts or distinguishes it and no special leave petition surfaced. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The judgment records at para 2.2 only that 'Section 11 and 13 of the Act was amended by way of Finance Act, 2015' with effect from 1 April 2016 and that the amendments were not noticed; it does not identify which particular amendment made the switch necessary, and I have not stated one. The impugned order's own words, 'I have reasons to believe that the applicant had no intention of filing form 10 within due date specified u/s 139(1)', appear in the judgment as an extract of the Commissioner's order and not as the Court's finding. Paragraph 6 was confirmed by a second retrieval. The scope of the carve-outs in s.10(23A) is stated in this entry from the clause and not from anything the judgment decides. The report carries a date conflict: the header prints "Judgment pronounced on: 05.01.2024" while the signature block at the foot prints "JANUARY 05, 2023/RY". The header date is taken as correct, since the impugned order it sets aside is dated 30.01.2019 and the judgment was reserved on 13.12.2023. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The petition was allowed. The order dated 30 January 2019 was set aside, the delay in submitting Form 10 was condoned, and it was directed that Form 10 be accepted with the necessary consequences to follow (paras 9 and 10).
TaxSphere, “Bar Council of India v CIT (Exemption)”, https://taxnotice.vittsphere.com/caselaw/case/bar-council-of-india-10-23a-section-11-form-10-condonation/ (validity last checked 2026-09-08)
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Our audit report was not e-filed with the return and exemption was denied. Can the delay be condoned?
My trust filed Form 10 only after the scrutiny notice came — 338 days after the due date. The Commissioner refused to condone under s.119(2)(b). Is that the end of the accumulation claim?
Form 10 was 51 days late because our accountant left mid-year, but it was on the file before the return was processed. The Commissioner still refused to condone. What now?
CPC denied my s.11(2) accumulation because Form 10 was filed after the s.139(1) due date, and the CIT(A) said s.13(9) settles it. Can the Tribunal still help me?
