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?
Yes. Following the jurisdictional High Court in CIT v Sakal Relief Fund, the Mumbai Tribunal held that filing Form No. 10 before completion of assessment satisfies s.11(2), so a s.143(1) denial founded only on the s.139(1) due date cannot stand. The matter was restored to the Assessing Officer for the limited purpose of checking that the stated purpose of accumulation matches the objects and is backed by a trustees' resolution, with an express direction not to deny exemption on merely technical grounds.
Decided by the ITAT (Pawan Singh JM and Makarand Vasant Mahadeokar AM) on 2026-05-04, reported as ITA No. 654/Mum/2026 (ITAT Mumbai 'D' Bench). It bears on section 11, section 11(1)(a), section 11(2), section 11(3A), section 13(9), section 119(2)(b), section 139(1), section 139(4), section 143(1), section 143(1)(a)(ii), section 10B, section 234A, section 234B, section 234C of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the case for the trust that has already lost its condonation application before the CIT (Exemptions), because the Tribunal decided the appeal on merits notwithstanding the s.119(2)(b) rejection and notwithstanding the CIT(A)'s reliance on s.13(9). It also shows how a first appellate authority resists: the CIT(A) held that s.13(9), inserted by the Finance Act 2015 from AY 2016-17, denies s.11(2) unless both the return and Form No. 10 are within the s.139(1) time, and that CBDT circulars give condonation power to the jurisdictional Commissioner and not to an appellate authority. The Tribunal did not overrule that reasoning head on; it went round it through Sakal Relief Fund and the s.139(4) route. Note the second issue too: the Revenue relied on a revised Form No. 10 filed a year later that changed the purpose of accumulation without the prior approval s.11(3A) requires — the Tribunal would not act on it because that Form was not on the record before it.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The assessee is a public charitable trust registered under the Bombay Public Trusts Act 1950 and under s.12A. For AY 2017-18 the s.139(1) due date was 7 November 2017. The return in Form ITR-7 was filed on 20 March 2018 under s.139(4) declaring nil income after claiming s.11 exemption. Form No. 10 was filed on 30 March 2018, claiming accumulation of Rs.10,00,000 set apart for 'soil and water conservation work using Saguna Rice Technique' under a trustees' resolution of 10 April 2017. CPC processed the return on 27 March 2019 — a year after the Form was filed — denying the accumulation because Form No. 10 was not filed by the s.139(1) due date, determining income of Rs.8,83,482 and raising tax with interest under ss.234A, 234B and 234C of Rs.3,31,416. The CIT(A) dismissed the appeal, holding that s.13(9), inserted by the Finance Act 2015 with effect from 1 April 2016, bars s.11(2) unless both the return and Form No. 10 are within the s.139(1) time, that the power to condone lies with the jurisdictional Commissioner and not the appellate authority, and that the alternative claim to the 15 per cent under s.11(1)(a) failed because Form 10B was also not filed in time. The Departmental Representative also produced the CIT (Exemptions), Mumbai order of 22 June 2022 rejecting the trust's s.119(2)(b) condonation application, which had recorded that a revised Form No. 10 was filed on 20 April 2019 altering the purpose of accumulation without the prior approval required by s.11(3A), and that s.13(9) applied because the return was under s.139(4).
Filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under s.11(2) (paragraph 18), so denial merely because the Form was not filed by the s.139(1) due date could not be sustained (paragraph 13). The matter was restored to the Jurisdictional Assessing Officer for the limited purpose of verifying whether the purpose stated in the original Form No. 10 accords with the objects of the trust and is supported by the trustees' resolution, and, if a revised Form No. 10 is found, whether any change of purpose is backed by a valid resolution within the objects; on being so satisfied the Assessing Officer was directed to grant the s.11(2) exemption of Rs.10,00,000 and recompute the income (paragraphs 19 to 21). The ground was allowed for statistical purposes (paragraph 22).
The undisputed position was that the return was filed on 20 March 2018 under s.139(4), Form No. 10 on 30 March 2018, and processing under s.143(1) only on 27 March 2019, after the Form (paragraph 10). The jurisdictional High Court in CIT v Sakal Relief Fund had considered an identical issue and held, after considering Nagpur Hotel Owners' Association, that for s.11(2) Form No. 10 can be filed at any time before completion of assessment and that even filing during reassessment proceedings suffices, being within the extended time allowed by s.139(4) (paragraph 12). Once Form No. 10 is on record before completion of assessment, s.11(2) stands substantially complied with (paragraph 13). On the s.11(3A) point taken by the Departmental Representative, the Tribunal found the original Form on record but the alleged revised Form of 20 April 2019 not on record before it, so the CIT (Exemptions)'s findings on change of purpose could not be conclusively relied on to deny the benefit (paragraphs 15 and 16); the lower authorities had not examined either Form against the objects and the trustees' resolution, and that limited factual verification could not by itself justify denial once the substantive conditions were satisfied (paragraph 17).
In view of the foregoing discussion and respectfully following the binding precedent of the Hon'ble jurisdictional High Court in Sakal Relief Fund (supra), we hold that the filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under section 11(2).
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppYes. Following the jurisdictional High Court in CIT v Sakal Relief Fund, the Mumbai Tribunal held that filing Form No. 10 before completion of assessment satisfies s.11(2), so a s.143(1) denial founded only on the s.139(1) due date cannot stand. The matter was restored to the Assessing Officer for the limited purpose of checking that the stated purpose of accumulation matches the objects and is backed by a trustees' resolution, with an express direction not to deny exemption on merely technical grounds. This was decided by the ITAT (Pawan Singh JM and Makarand Vasant Mahadeokar AM) and bears on section 11, section 11(1)(a), section 11(2), section 11(3A), section 13(9), section 119(2)(b), section 139(1), section 139(4), section 143(1), section 143(1)(a)(ii), section 10B, section 234A, section 234B, section 234C of the Income Tax Act 1961. It is reported as ITA No. 654/Mum/2026 (ITAT Mumbai 'D' Bench). This is the case for the trust that has already lost its condonation application before the CIT (Exemptions), because the Tribunal decided the appeal on merits notwithstanding the s.119(2)(b) rejection and notwithstanding the CIT(A)'s reliance on s.13(9). It also shows how a first appellate authority resists: the CIT(A) held that s.13(9), inserted by the Finance Act 2015 from AY 2016-17, denies s.11(2) unless both the return and Form No. 10 are within the s.139(1) time, and that CBDT circulars give condonation power to the jurisdictional Commissioner and not to an appellate authority. The Tribunal did not overrule that reasoning head on; it went round it through Sakal Relief Fund and the s.139(4) route. Note the second issue too: the Revenue relied on a revised Form No. 10 filed a year later that changed the purpose of accumulation without the prior approval s.11(3A) requires — the Tribunal would not act on it because that Form was not on the record before it. If it applies to you, the first step is this: Establish the date the Form No. 10 reached the file and the date the return was processed or the assessment completed; if the Form came first, put Sakal Relief Fund at the front of the grounds.
The assessee is a public charitable trust registered under the Bombay Public Trusts Act 1950 and under s.12A. For AY 2017-18 the s.139(1) due date was 7 November 2017. The return in Form ITR-7 was filed on 20 March 2018 under s.139(4) declaring nil income after claiming s.11 exemption. Form No. 10 was filed on 30 March 2018, claiming accumulation of Rs.10,00,000 set apart for 'soil and water conservation work using Saguna Rice Technique' under a trustees' resolution of 10 April 2017. CPC processed the return on 27 March 2019 — a year after the Form was filed — denying the accumulation because Form No. 10 was not filed by the s.139(1) due date, determining income of Rs.8,83,482 and raising tax with interest under ss.234A, 234B and 234C of Rs.3,31,416. The CIT(A) dismissed the appeal, holding that s.13(9), inserted by the Finance Act 2015 with effect from 1 April 2016, bars s.11(2) unless both the return and Form No. 10 are within the s.139(1) time, that the power to condone lies with the jurisdictional Commissioner and not the appellate authority, and that the alternative claim to the 15 per cent under s.11(1)(a) failed because Form 10B was also not filed in time. The Departmental Representative also produced the CIT (Exemptions), Mumbai order of 22 June 2022 rejecting the trust's s.119(2)(b) condonation application, which had recorded that a revised Form No. 10 was filed on 20 April 2019 altering the purpose of accumulation without the prior approval required by s.11(3A), and that s.13(9) applied because the return was under s.139(4). The matter was decided on 2026-05-04 by the ITAT (Pawan Singh JM and Makarand Vasant Mahadeokar AM). On those facts the ITAT held as follows. Filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under s.11(2) (paragraph 18), so denial merely because the Form was not filed by the s.139(1) due date could not be sustained (paragraph 13). The matter was restored to the Jurisdictional Assessing Officer for the limited purpose of verifying whether the purpose stated in the original Form No. 10 accords with the objects of the trust and is supported by the trustees' resolution, and, if a revised Form No. 10 is found, whether any change of purpose is backed by a valid resolution within the objects; on being so satisfied the Assessing Officer was directed to grant the s.11(2) exemption of Rs.10,00,000 and recompute the income (paragraphs 19 to 21). The ground was allowed for statistical purposes (paragraph 22).
The undisputed position was that the return was filed on 20 March 2018 under s.139(4), Form No. 10 on 30 March 2018, and processing under s.143(1) only on 27 March 2019, after the Form (paragraph 10). The jurisdictional High Court in CIT v Sakal Relief Fund had considered an identical issue and held, after considering Nagpur Hotel Owners' Association, that for s.11(2) Form No. 10 can be filed at any time before completion of assessment and that even filing during reassessment proceedings suffices, being within the extended time allowed by s.139(4) (paragraph 12). Once Form No. 10 is on record before completion of assessment, s.11(2) stands substantially complied with (paragraph 13). On the s.11(3A) point taken by the Departmental Representative, the Tribunal found the original Form on record but the alleged revised Form of 20 April 2019 not on record before it, so the CIT (Exemptions)'s findings on change of purpose could not be conclusively relied on to deny the benefit (paragraphs 15 and 16); the lower authorities had not examined either Form against the objects and the trustees' resolution, and that limited factual verification could not by itself justify denial once the substantive conditions were satisfied (paragraph 17). In the words reproduced by the source cited on this page: "In view of the foregoing discussion and respectfully following the binding precedent of the Hon'ble jurisdictional High Court in Sakal Relief Fund (supra), we hold that the filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under section 11(2)." The decision followed or applied CIT v. Sakal Relief Fund (2017) 295 CTR 561 (Bombay) — followed as binding jurisdictional precedent; CIT v. Nagpur Hotel Owners' Association, 247 ITR 201 (SC) — relied on through Sakal Relief Fund; Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust v. CIT, 207 ITR 368 (Bombay) — relied on by the assessee on the s.139(4) point.
It was decided by the ITAT on 2026-05-04 and is reported as ITA No. 654/Mum/2026 (ITAT Mumbai 'D' Bench). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 11, section 11(1)(a), section 11(2), section 11(3A), section 13(9), section 119(2)(b), section 139(1), section 139(4), section 143(1), section 143(1)(a)(ii), section 10B, section 234A, section 234B, section 234C, 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. Filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under s.11(2) (paragraph 18), so denial merely because the Form was not filed by the s.139(1) due date could not be sustained (paragraph 13). The matter was restored to the Jurisdictional Assessing Officer for the limited purpose of verifying whether the purpose stated in the original Form No. 10 accords with the objects of the trust and is supported by the trustees' resolution, and, if a revised Form No. 10 is found, whether any change of purpose is backed by a valid resolution within the objects; on being so satisfied the Assessing Officer was directed to grant the s.11(2) exemption of Rs.10,00,000 and recompute the income (paragraphs 19 to 21). The ground was allowed for statistical purposes (paragraph 22). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 11, section 11(1)(a), section 11(2), section 11(3A), section 13(9), section 119(2)(b), section 139(1), section 139(4), section 143(1), section 143(1)(a)(ii), section 10B, section 234A, section 234B, section 234C of the Income Tax Act 1961, and was decided by Pawan Singh JM and Makarand Vasant Mahadeokar AM. 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. Anticipate s.13(9): the Revenue's whole case is that it makes the s.139(1) date mandatory, so plead the s.139(4) reasoning in Sakal Relief Fund and Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust expressly rather than arguing generalised substantial compliance. Do not abandon the Tribunal appeal because the CIT (Exemptions) has rejected condonation — here the rejection was on record and the Tribunal still decided in the trust's favour on merits. Produce the trustees' resolution fixing the purpose of accumulation, and be ready to show that the purpose stated in Form No. 10 is within the objects; that is the only issue the Tribunal left open. If a revised Form No. 10 was filed changing the purpose, deal with s.11(3A) directly — prior approval of the Assessing Officer is needed, and the Revenue will use its absence.
Validity check could not be completed. Validity check could not be completed; no later treatment was searched for. The tension in the area is not resolved by this order: the CIT(A)'s reading of s.13(9) — that both the return and Form No. 10 must be within the s.139(1) time from AY 2016-17 — was not addressed on its own terms, the Tribunal instead applying the pre-s.13(9) Bombay line in Sakal Relief Fund through s.139(4). A practitioner should expect the Revenue to press s.13(9) again, and should note that this order is not authority on whether s.13(9) displaces Sakal Relief Fund. 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-two numbered paragraphs and was transcribed in full from the plain /doc/ URL; the holding at paragraph 18 was re-checked through /docfragment/ and came back word for word. The indiankanoon listing dates the order 5 May 2026 but the document's own header and the pronouncement line both read 04.05.2026, which is the date used here. Paragraph 12 reproduces a passage from Sakal Relief Fund with ellipses as printed in the Tribunal's own order; that passage is the High Court's words quoted inside this order and is not used here as a quotation of the Tribunal. The order describes the respondent in the cause title as the Commissioner of Income Tax (Appeals) rather than the Assessing Officer. 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.
Filing of Form No. 10 prior to completion of assessment satisfies the statutory requirement under s.11(2) (paragraph 18), so denial merely because the Form was not filed by the s.139(1) due date could not be sustained (paragraph 13). The matter was restored to the Jurisdictional Assessing Officer for the limited purpose of verifying whether the purpose stated in the original Form No. 10 accords with the objects of the trust and is supported by the trustees' resolution, and, if a revised Form No. 10 is found, whether any change of purpose is backed by a valid resolution within the objects; on being so satisfied the Assessing Officer was directed to grant the s.11(2) exemption of Rs.10,00,000 and recompute the income (paragraphs 19 to 21). The ground was allowed for statistical purposes (paragraph 22).
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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?
Our trust was formed weeks ago and has done nothing yet. Can registration be refused for that?
The CBDT rejected my condonation application without dealing with my reasons. Can I challenge that?