Bombay High Court Condones Trust's 30-Day Delay In Filing Tax Audit Form Despite Pending CBDT Plea

The Bombay High Court on 21 September condoned Vallabh Welfare Foundation's 30-day delay in filing Form 10B for Assessment Year 2020-21, despite the charitable trust having already approached the CBDT seeking condonation of the delay.

A Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash declined to relegate the Foundation to its pending application before the CBDT, finding that the peculiar facts warranted the High Court's intervention. The judges observed:

“Though we are mindful of the fact that the Petitioner has already filed an Application before the CBDT seeking a condonation of delay, in the peculiar facts and circumstances of the present case, we do not deem it necessary to relegate the Petitioner to prosecute its pending Application before the CBDT.”

The Bench noted that Assessment Year 2020-21 was the first year in which the deadline for filing Form 10B had been advanced by one month. It also took into account that the delay occurred during the COVID-19 period, when timelines for several statutory compliances were being extended.

It also found the trust's explanation for the 30-day delay to be bona fide. It noted that refusing to condone the delay would cause genuine hardship, as Vallabh Welfare Foundation would lose its exemption under Section 11 and face a tax demand of Rs. 27.35 lakh solely because of the delayed filing of Form 10B.

Accordingly, the High Court set aside the rejection order, condoned the 30-day delay and directed the Income Tax Department to process the return afresh by treating Form 10B as filed within time.

For the Petitioner: Devendra H. Jain, along with Shashank Ajay Mehta and Saukhya Lakade.

For the Respondents: Prathamesh P. Bhosle