Rajasthan High Court Condones 700-Day Delay By Trust In Filing Audit Report, Cites 'Charitable Activities' & Lack Of Malafide Intention

Rajasthan High Court set aside an order that rejected a public charitable trust's application for condonation of 700-day delay in filing its audit report under form 10-B of the Income Tax Act, observing that looking at the charitable activities itself the delay should have been condoned.

The division bench of Justice K.R. Shriram and Justice Sandeep Taneja while condoning the delay, held that a public charitable trust, which otherwise satisfied the condition for availing exemption should not be denied the same merely due to the "bar of limitation" especially when the statute conferred such "wide discretionary powers" to condone delay.

"The fact that there was any mala fide intention in filing Form 10B belatedly is not alleged in impugned order. The fact that petitioner is a charitable trust is also not denied. Looking at the charitable activities itself, in our view, delay condonation application should have been allowed," the court said. 

The petitioner was a public charitable trust which was maintained by its President who suffered a severe brain stroke that delayed the entire accounting process of the trust for the assessment year 2018-19. As a result, the Form 10-B was uploaded by the trust only after a delay of 700 days.

Thereafter an application for condonation of delay was filed under Section 119 of the Income Tax Act which was rejected by the income tax authority on the ground that in the absence of President, a Vice-President should have been responsible; hence the President not being well was not a bona fide reason for seeking condonation.

After hearing the contentions, the Court, held that,

“Courts have repeatedly held that such approach in the cases of present type should be equitious, balancing and judicious…it does not appear that assessee petitioner was lethargic or lacked bona fide in making claim beyond the period of limitation. In fact, fact, we do not understand why would any party, who is entitled to claim, would intentionally delay in uploading the required documents.”

Hence, the petition was allowed and the delay was condoned.

Title: Manav Seva Samiti v Principal Chief Commissioner of Income Tax

Citation: 2025 LiveLaw (Raj) 277

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