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?
No. Where the substantive conditions of s.11(2) are met — the accumulation is disclosed in the return, the Board resolution and the Form 10B audit report before the s.139(1) due date, the money is invested in a s.11(5) mode and is actually applied within the permitted period — the Bombay High Court held that a liberal view must be taken and the delay in filing Form 10 condoned. The refusal order under s.119(2)(b) was quashed and the delay condoned by the Court itself.
Decided by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J) on 2025-10-07, reported as Writ Petition (L) No. 23170 of 2025 (Bombay High Court). It bears on section 11, section 11(1), section 11(2), section 11(5), section 119(2)(b), section 139(1), section 143(2), section 143(3), section 12A(b), section 10B(8) of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the answer to the standard rejection order, which says the delay was caused by the assessee's own inaction and that inaction is never a reasonable cause. The Court's route is to separate the substantive conditions of s.11(2) from the procedural act of filing Form 10, and to ask whether the claim was new or merely late-documented. It also disposes of the Revenue's now-standard reliance on PCIT v Wipro Ltd: Wipro was about a s.10B(8) opt-out declaration where the assessee changed its claim, and it was not a case about s.119(2)(b) at all. The limit of the decision is that the substantive conditions must genuinely be satisfied — the Court did not say a late Form 10 is always curable.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner, a charitable institution, filed its return for AY 2018-19 on 22 October 2018 declaring nil income and claiming accumulation under s.11(2) of Rs.1,15,95,743. The accumulation was carried out under a resolution of its Board of Directors and was reflected in the audit report in Form No. 10B obtained under s.12A(b). Form No. 10 ought to have been filed by 31 October 2018, the s.139(1) due date. It was in fact filed electronically on 25 September 2019, three days after the return was picked up for scrutiny by a notice under s.143(2) dated 22 September 2019 — a delay of 338 days. A condonation application was filed on 10 February 2020. Meanwhile the assessment under s.143(3) was completed on 28 September 2021 denying the accumulation solely because the Form was late and because the status of the condonation application had not been furnished, raising a demand of Rs.82,90,538 (tax Rs.49,22,973 plus interest Rs.34,17,628 less TDS credit Rs.50,060). After notices in February 2020, December 2021 and February 2025, the condonation application was rejected by order dated 7 March 2025 on the ground that no documentary evidence substantiated the delay and that the delay was attributable to the petitioner's inaction and negligence. The accumulated sum had by then been applied to the objects in the previous year relevant to AY 2020-21. AY 2018-19 was the first year in which the petitioner had to comply with the requirement introduced by the Finance Act 2015, there having been no accumulation in AY 2016-17 or AY 2017-18.
The order dated 7 March 2025 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned by the Court (paragraphs 15 and 16). A liberal view was required because the substantive requirements of s.11(2) — investment in a s.11(5) mode and application to the objects within the stipulated time — stood fulfilled, and because the claim was not a new one raised for the first time by the late Form but was already made in the return of income, supported by a Board resolution and a Form No. 10B audit report which existed before the s.139(1) due date (paragraph 10).
Section 11(2) as it stood up to AY 2015-16 prescribed no period of limitation for Form No. 10, and Nagpur Hotel Owners Association had held it could be filed during the assessment proceedings; the requirement of filing before the s.139(1) due date, with electronic filing under Rule 17, came in by the Finance Act 2015 with effect from 1 April 2016, and AY 2018-19 was the petitioner's first year of accumulation after that change, so its belief that the Form could still be filed during assessment was bona fide (paragraph 10; the same material appears at paragraph 6, where it is set out as the petitioner's submission and not as the Court's own reasoning). The Court concurred with the Delhi High Court in Bar Council of India v CIT(E), where the same explanation — the amendment going unnoticed — was accepted, and quoted that Court's observation that it was unable to fathom what benefit would accrue to the petitioner by delaying the filing of Form 10 (paragraph 11). The second respondent ought to have taken a justice-oriented rather than a pedantic approach, following this Court's own line in People's Mobile Hospitals, Mirae Asset Foundation, Sau Dwarkabai tai Karwa Charitable Trust and Kotak Family Foundation, and the Gujarat High Court's principle in Sarvodaya Charitable Trust that the authority's approach should be equitious, balancing and judicious and that exemption should not be denied merely on the bar of limitation (paragraph 12). Genuine hardship was established because the accumulated Rs.1,15,95,743 had already been spent on the objects in AY 2020-21 and recovery of the Rs.82,90,538 demand would place the petitioner in gross financial difficulty (paragraph 13). The Revenue's reliance on PCIT v Wipro Ltd was rejected: that ratio was peculiar to a s.10B(8) opt-out declaration filed with a revised return, where the assessee changed its claim; here the claim never changed, and in any event Wipro was not concerned with the exercise of power under s.119(2)(b) (paragraph 14).
In such circumstances, we are of the opinion that a liberal view needs to be taken and, hence, the delay in filing Form No. 10 for the year under consideration needs to be condoned.
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Handle my notice → Ask a CA on WhatsAppNo. Where the substantive conditions of s.11(2) are met — the accumulation is disclosed in the return, the Board resolution and the Form 10B audit report before the s.139(1) due date, the money is invested in a s.11(5) mode and is actually applied within the permitted period — the Bombay High Court held that a liberal view must be taken and the delay in filing Form 10 condoned. The refusal order under s.119(2)(b) was quashed and the delay condoned by the Court itself. This was decided by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J) and bears on section 11, section 11(1), section 11(2), section 11(5), section 119(2)(b), section 139(1), section 143(2), section 143(3), section 12A(b), section 10B(8) of the Income Tax Act 1961. It is reported as Writ Petition (L) No. 23170 of 2025 (Bombay High Court). This is the answer to the standard rejection order, which says the delay was caused by the assessee's own inaction and that inaction is never a reasonable cause. The Court's route is to separate the substantive conditions of s.11(2) from the procedural act of filing Form 10, and to ask whether the claim was new or merely late-documented. It also disposes of the Revenue's now-standard reliance on PCIT v Wipro Ltd: Wipro was about a s.10B(8) opt-out declaration where the assessee changed its claim, and it was not a case about s.119(2)(b) at all. The limit of the decision is that the substantive conditions must genuinely be satisfied — the Court did not say a late Form 10 is always curable. If it applies to you, the first step is this: Before arguing condonation, assemble proof that the accumulation existed before the s.139(1) due date: the trustees' resolution, the Form 10B audit report showing the accumulation, and the corresponding entry in the return of income. That is what turns a late form into late documentation of an existing claim rather than a new claim.
The petitioner, a charitable institution, filed its return for AY 2018-19 on 22 October 2018 declaring nil income and claiming accumulation under s.11(2) of Rs.1,15,95,743. The accumulation was carried out under a resolution of its Board of Directors and was reflected in the audit report in Form No. 10B obtained under s.12A(b). Form No. 10 ought to have been filed by 31 October 2018, the s.139(1) due date. It was in fact filed electronically on 25 September 2019, three days after the return was picked up for scrutiny by a notice under s.143(2) dated 22 September 2019 — a delay of 338 days. A condonation application was filed on 10 February 2020. Meanwhile the assessment under s.143(3) was completed on 28 September 2021 denying the accumulation solely because the Form was late and because the status of the condonation application had not been furnished, raising a demand of Rs.82,90,538 (tax Rs.49,22,973 plus interest Rs.34,17,628 less TDS credit Rs.50,060). After notices in February 2020, December 2021 and February 2025, the condonation application was rejected by order dated 7 March 2025 on the ground that no documentary evidence substantiated the delay and that the delay was attributable to the petitioner's inaction and negligence. The accumulated sum had by then been applied to the objects in the previous year relevant to AY 2020-21. AY 2018-19 was the first year in which the petitioner had to comply with the requirement introduced by the Finance Act 2015, there having been no accumulation in AY 2016-17 or AY 2017-18. The matter was decided on 2025-10-07 by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J). On those facts the High Court held as follows. The order dated 7 March 2025 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned by the Court (paragraphs 15 and 16). A liberal view was required because the substantive requirements of s.11(2) — investment in a s.11(5) mode and application to the objects within the stipulated time — stood fulfilled, and because the claim was not a new one raised for the first time by the late Form but was already made in the return of income, supported by a Board resolution and a Form No. 10B audit report which existed before the s.139(1) due date (paragraph 10).
Section 11(2) as it stood up to AY 2015-16 prescribed no period of limitation for Form No. 10, and Nagpur Hotel Owners Association had held it could be filed during the assessment proceedings; the requirement of filing before the s.139(1) due date, with electronic filing under Rule 17, came in by the Finance Act 2015 with effect from 1 April 2016, and AY 2018-19 was the petitioner's first year of accumulation after that change, so its belief that the Form could still be filed during assessment was bona fide (paragraph 10; the same material appears at paragraph 6, where it is set out as the petitioner's submission and not as the Court's own reasoning). The Court concurred with the Delhi High Court in Bar Council of India v CIT(E), where the same explanation — the amendment going unnoticed — was accepted, and quoted that Court's observation that it was unable to fathom what benefit would accrue to the petitioner by delaying the filing of Form 10 (paragraph 11). The second respondent ought to have taken a justice-oriented rather than a pedantic approach, following this Court's own line in People's Mobile Hospitals, Mirae Asset Foundation, Sau Dwarkabai tai Karwa Charitable Trust and Kotak Family Foundation, and the Gujarat High Court's principle in Sarvodaya Charitable Trust that the authority's approach should be equitious, balancing and judicious and that exemption should not be denied merely on the bar of limitation (paragraph 12). Genuine hardship was established because the accumulated Rs.1,15,95,743 had already been spent on the objects in AY 2020-21 and recovery of the Rs.82,90,538 demand would place the petitioner in gross financial difficulty (paragraph 13). The Revenue's reliance on PCIT v Wipro Ltd was rejected: that ratio was peculiar to a s.10B(8) opt-out declaration filed with a revised return, where the assessee changed its claim; here the claim never changed, and in any event Wipro was not concerned with the exercise of power under s.119(2)(b) (paragraph 14). In the words reproduced by the source cited on this page: "In such circumstances, we are of the opinion that a liberal view needs to be taken and, hence, the delay in filing Form No. 10 for the year under consideration needs to be condoned." The decision followed or applied Bar Council of India v. CIT(E) (2024) 158 taxmann.com 311 (Delhi) — concurred with and applied; CIT v. Nagpur Hotel Owners Association (2001) 247 ITR 201 (SC) — relied on for the pre-amendment position; Sarvodaya Charitable Trust v. ITO (E) (2021) 125 taxmann.com 75 (Gujarat) — principle applied through this Court's own line of decisions; PCIT v. Wipro Ltd. (2022) 140 taxmann.com 223 (SC) — distinguished.
It was decided by the High Court on 2025-10-07 and is reported as Writ Petition (L) No. 23170 of 2025 (Bombay 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 11, section 11(1), section 11(2), section 11(5), section 119(2)(b), section 139(1), section 143(2), section 143(3), section 12A(b), section 10B(8), 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 order dated 7 March 2025 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned by the Court (paragraphs 15 and 16). A liberal view was required because the substantive requirements of s.11(2) — investment in a s.11(5) mode and application to the objects within the stipulated time — stood fulfilled, and because the claim was not a new one raised for the first time by the late Form but was already made in the return of income, supported by a Board resolution and a Form No. 10B audit report which existed before the s.139(1) due date (paragraph 10). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 11, section 11(1), section 11(2), section 11(5), section 119(2)(b), section 139(1), section 143(2), section 143(3), section 12A(b), section 10B(8) of the Income Tax Act 1961, and was decided by B. P. Colabawalla J and Amit S. Jamsandekar 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. Show that the s.11(5) investment was made and that the accumulated sum was in fact applied to the objects within the permitted period, and identify the assessment year in which it was applied. Quantify the hardship in money: put the tax demand alongside the accumulated amount already spent on the objects, and say what the trust would have to cut or borrow to pay it. If the delay is explained by the Finance Act 2015 amendment going unnoticed, say so expressly and cite Bar Council of India v CIT(E) — the Delhi High Court accepted that explanation and this Court concurred. Meet Wipro head on: point out that the assessee has not changed its claim at any stage and that Wipro was not concerned with the exercise of power under s.119(2)(b).
Validity check could not be completed. Validity check could not be completed. No search was run for an SLP or for later treatment of this October 2025 order. It sits in a settled Bombay High Court line — the order itself names People's Mobile Hospitals (15 September 2025), Mirae Asset Foundation (7 July 2025), Sau Dwarkabai tai Karwa Charitable Trust and Kotak Family Foundation as its own earlier decisions to the same effect — and it concurs with the Delhi High Court in Bar Council of India, which is already in this library. 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.
Read in two passes on the plain /doc/ URL: the first pass returned paragraphs 1 to 5 and then jumped to 15 to 17 with a bracketed marker, so paragraphs 6 to 14 were pulled separately and are transcribed in full. The document runs to seventeen numbered paragraphs, ending with the digital-signature paragraph. The key quote at paragraph 10 was re-checked through /docfragment/ and came back word for word. Paragraph 12 cites this Court's own People's Mobile Hospitals decision as 'Writ Petition No. 2632 of 2025'. That number is wrong: the People's Mobile Hospitals order's own header reads 'Writ Petition No. 2697 of 2025' (neutral citation 2025:BHC-OS:15246-DB). The date, 15 September 2025, matches. Paragraph 7 refers to Kotak Family Foundation and Brahmchari Wadi Trust by Taxmann citation only; those citation strings are reproduced as printed in the judgment and were not used as a source. 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 order dated 7 March 2025 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned by the Court (paragraphs 15 and 16). A liberal view was required because the substantive requirements of s.11(2) — investment in a s.11(5) mode and application to the objects within the stipulated time — stood fulfilled, and because the claim was not a new one raised for the first time by the late Form but was already made in the return of income, supported by a Board resolution and a Form No. 10B audit report which existed before the s.139(1) due date (paragraph 10).
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