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?
The Bombay High Court quashed the refusal and condoned the delay itself. Where the delay is short, unexplained by any wilful default, and the Form was on record when the return was processed, refusing condonation is a pedantic rather than a justice-oriented approach and produces genuine hardship within the meaning of s.119(2)(b).
Decided by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J) on 2025-09-15, reported as Writ Petition No. 2697 of 2025 (Bombay High Court). It bears on section 11, section 11(2), section 119(2)(b), section 139(1), section 143(1), section 12A(1)(ac)(i) of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the short-delay case, and it is useful precisely because the facts are ordinary: staff turnover, accounts finalised late, audit report late, Form 10 filed before the return but after the extended due date. The Court did not require the trust to prove that the delay was caused by something outside its control — it was enough that the Revenue had not alleged wilful or intentional default and had not disputed the evidence. Note the sequence: the Form was filed on 28 December 2022, the return two days later on 30 December 2022, and the s.143(1) processing followed on 8 March 2023, so the Form was on the file when the return was processed.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner is a public charitable trust registered under the Maharashtra Public Trusts Act 1950 since 1953 and under s.12A(1)(ac)(i), running a day-care hospital at Worli providing medical, surgical, ophthalmic, dental, cardiology, ENT, physiotherapy, pathology, radiology and dialysis services, largely to the poor. For AY 2022-23 the due date for the return, and therefore for Form No. 10 under s.11(2), was extended to 7 November 2022 by CBDT Circular No. 20/2022 dated 26 October 2022. The trust's accountant had left during the second Covid wave in 2021; a part-time replacement also left; a permanent accountant was appointed only in March 2022 and lacked experience of charitable-institution compliance. Accounts and the audit were consequently delayed, the accumulable amount could not be ascertained, and Form No. 10 was e-filed only on 28 December 2022, a delay of about 51 days. The return was filed on 30 December 2022. The return was processed under s.143(1) on 8 March 2023 disallowing the s.11 exemption. A condonation application dated 8 March 2023 was filed on 16 March 2023 and was rejected by order dated 12 March 2025 on the ground that no reasonable cause had been adduced.
The order under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned (paragraphs 17 and 18); rule was made absolute with no order as to costs. A delay of 51 days was not such as to deny the trust the right to file Form No. 10, and refusing condonation would cause genuine hardship because a substantial s.11(2) exemption would be lost (paragraph 14).
The Court agreed with the petitioner's contentions on the material before it, noting that the Commissioner had not doubted or denied any of the facts, had not suggested that the 51-day delay arose from any wilful or intentional default, and had not disputed the evidence of the successive changes of accountant (paragraphs 9 and 14). The Commissioner ought to have taken a justice-oriented approach rather than a pedantic one (paragraph 15). The Court relied on the Supreme Court's holding in Nagpur Hotel Owners Association that Form No. 10 can be filed at any time before the assessment is completed, and on this Court's decision in CIT v Sakal Relief Fund that even a Form No. 10 filed during reassessment proceedings preserves the s.11(2) benefit because such filing falls within the time allowed for furnishing a return under s.139(4) (paragraph 15). It also relied on the Gujarat High Court in CIT (Exemption) v Bochasanwasi Shri Akshar Purshottam Public Charitable Trust that technical errors relating to the filing of Form 10 or Form 10B cannot be fatal and cannot be the basis for denying exemption, noting that the Supreme Court had rejected the Department's SLP against that judgment (paragraph 16).
We are of the view that Respondent No.1 ought to have taken a justice-oriented approach rather than a pedantic one and condoned the delay.
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Handle my notice → Ask a CA on WhatsAppThe Bombay High Court quashed the refusal and condoned the delay itself. Where the delay is short, unexplained by any wilful default, and the Form was on record when the return was processed, refusing condonation is a pedantic rather than a justice-oriented approach and produces genuine hardship within the meaning of s.119(2)(b). This was decided by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J) and bears on section 11, section 11(2), section 119(2)(b), section 139(1), section 143(1), section 12A(1)(ac)(i) of the Income Tax Act 1961. It is reported as Writ Petition No. 2697 of 2025 (Bombay High Court). This is the short-delay case, and it is useful precisely because the facts are ordinary: staff turnover, accounts finalised late, audit report late, Form 10 filed before the return but after the extended due date. The Court did not require the trust to prove that the delay was caused by something outside its control — it was enough that the Revenue had not alleged wilful or intentional default and had not disputed the evidence. Note the sequence: the Form was filed on 28 December 2022, the return two days later on 30 December 2022, and the s.143(1) processing followed on 8 March 2023, so the Form was on the file when the return was processed. If it applies to you, the first step is this: In the condonation application, spell out the causal chain from the disruption to the late Form — here, accountant left, part-timer left, new accountant appointed only in March 2022 and unfamiliar with trust compliance, so accounts and audit were late, so the accumulable amount could not be quantified, so Form 10 could not be filed.
The petitioner is a public charitable trust registered under the Maharashtra Public Trusts Act 1950 since 1953 and under s.12A(1)(ac)(i), running a day-care hospital at Worli providing medical, surgical, ophthalmic, dental, cardiology, ENT, physiotherapy, pathology, radiology and dialysis services, largely to the poor. For AY 2022-23 the due date for the return, and therefore for Form No. 10 under s.11(2), was extended to 7 November 2022 by CBDT Circular No. 20/2022 dated 26 October 2022. The trust's accountant had left during the second Covid wave in 2021; a part-time replacement also left; a permanent accountant was appointed only in March 2022 and lacked experience of charitable-institution compliance. Accounts and the audit were consequently delayed, the accumulable amount could not be ascertained, and Form No. 10 was e-filed only on 28 December 2022, a delay of about 51 days. The return was filed on 30 December 2022. The return was processed under s.143(1) on 8 March 2023 disallowing the s.11 exemption. A condonation application dated 8 March 2023 was filed on 16 March 2023 and was rejected by order dated 12 March 2025 on the ground that no reasonable cause had been adduced. The matter was decided on 2025-09-15 by the High Court (B. P. Colabawalla J and Amit S. Jamsandekar J). On those facts the High Court held as follows. The order under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned (paragraphs 17 and 18); rule was made absolute with no order as to costs. A delay of 51 days was not such as to deny the trust the right to file Form No. 10, and refusing condonation would cause genuine hardship because a substantial s.11(2) exemption would be lost (paragraph 14).
The Court agreed with the petitioner's contentions on the material before it, noting that the Commissioner had not doubted or denied any of the facts, had not suggested that the 51-day delay arose from any wilful or intentional default, and had not disputed the evidence of the successive changes of accountant (paragraphs 9 and 14). The Commissioner ought to have taken a justice-oriented approach rather than a pedantic one (paragraph 15). The Court relied on the Supreme Court's holding in Nagpur Hotel Owners Association that Form No. 10 can be filed at any time before the assessment is completed, and on this Court's decision in CIT v Sakal Relief Fund that even a Form No. 10 filed during reassessment proceedings preserves the s.11(2) benefit because such filing falls within the time allowed for furnishing a return under s.139(4) (paragraph 15). It also relied on the Gujarat High Court in CIT (Exemption) v Bochasanwasi Shri Akshar Purshottam Public Charitable Trust that technical errors relating to the filing of Form 10 or Form 10B cannot be fatal and cannot be the basis for denying exemption, noting that the Supreme Court had rejected the Department's SLP against that judgment (paragraph 16). In the words reproduced by the source cited on this page: "We are of the view that Respondent No.1 ought to have taken a justice-oriented approach rather than a pedantic one and condoned the delay." The decision followed or applied CIT v. Nagpur Hotel Owners Association, 247 ITR 201 (SC) — relied on; CIT v. Sakal Relief Fund (2017) 295 CTR 561 (Bombay) — relied on; CIT (Exemption) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust (2018) 409 ITR 591 (Gujarat) — relied on.
It was decided by the High Court on 2025-09-15 and is reported as Writ Petition No. 2697 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(2), section 119(2)(b), section 139(1), section 143(1), section 12A(1)(ac)(i), 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 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned (paragraphs 17 and 18); rule was made absolute with no order as to costs. A delay of 51 days was not such as to deny the trust the right to file Form No. 10, and refusing condonation would cause genuine hardship because a substantial s.11(2) exemption would be lost (paragraph 14). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 11, section 11(2), section 119(2)(b), section 139(1), section 143(1), section 12A(1)(ac)(i) 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. Attach the evidence for each link and then point out in the writ that the Commissioner disputed none of it and alleged no wilful default. Record the date the Form was filed against the date the return was processed under s.143(1); the fact that the Form was on record at processing is what the Court relied on. State the exemption denied in rupees — the Court treated the loss of a substantial s.11(2) exemption as itself the genuine hardship.
Validity check could not be completed. Validity check could not be completed; no search for an SLP or later treatment was run. The same Bench followed this order in Columbia Global Center in India v ITO (Exemptions) (Bombay, 7 October 2025), which is the fuller statement of the same principle and is also in this batch. 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 order runs to twenty numbered paragraphs and was transcribed in full from the plain /doc/ URL; the key quote at paragraph 15 was re-checked through /docfragment/ and came back word for word. Three defects in the report: paragraph 2 gives the impugned order as dated 12 March 2025 while paragraph 17, which quashes it, gives 3 March 2025; paragraph 5 cites 'Section 136(4)' where the context requires s.139(4); and paragraph 10 cites Nagpur Hotel Owners Association as '(2011) 247 ITR 201 (SC)' where the decision is of 2000 and the volume is reported as (2001) 247 ITR 201. None of these touches the reasoning. 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 under s.119(2)(b) was quashed and set aside and the delay in filing Form No. 10 was condoned (paragraphs 17 and 18); rule was made absolute with no order as to costs. A delay of 51 days was not such as to deny the trust the right to file Form No. 10, and refusing condonation would cause genuine hardship because a substantial s.11(2) exemption would be lost (paragraph 14).
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We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
My return was only processed under 143(1). Does that stop the department reopening it later?
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The CBDT rejected my condonation application without dealing with my reasons. Can I challenge that?