The Bombay High Court has held that non-acceptance of revised computation of income by the department in light of delayed filing of Form 9A by the petitioner/assessee, would lead to undue financial burden, hardship foisted upon the assessee/petitioner-trust.
The bench of Justice G. S. Kulkarni and Justice Advait M. Sethna has observed that the powers and statutory discretion conferred on the commissioners to condone delay under Section 119(2)(b) of the Income Tax Act ought to be judiciously exercised so that undue hardship to the assessee is avoided.
The bench noted that the order makes it evident that the assessing officer has mixed up issues of the petitioner claiming deductions towards depreciation and capital expenditure made and duly disclosed by it during the assessment proceedings with intentional delay in belated filing of Form 9A attributed to the petitioner.
The petitioner/assessee is a trust registered with the Charity Commissioner, Mumbai under section 12A of the Income Tax Act, also having another registration.
The objects as stipulated in the Trust Deed of the petitioner concerns activities to establish, promote, set up, run, maintain and grant-aid and other financial assistance to educational institutions for development of human knowledge. In furtherance of such objects of the trust, the petitioner established D. G. Khetan International School, B. H. Gadia International School, B. K. Gadia, A Level Junior College and J. Kumar International School at Malad (West) in the year 2006. Since the year 2006, respondents have accepted the petitioner’s status as a charitable institution.
The petitioner trust filed its Nil return of income after claiming exemption. The petitioner also filed its revised return claiming exemption under Section 11 of the Income Tax Act.
During the course of assessment proceedings, the petitioner uploaded a revised computation of income dated 09 November 2019 with a view to rectify certain computation mistakes. The assessment in the petitioner’s case was completed on 11 December 2019 resulting in the assessment order of the date.
The petitioner filed Form 9A on 20 December 2019 on the Income Tax portal, alongwith an application for condonation of delay in filing the said Form 9A.
The Department held that delay in filing Form 9A was not mere procedural lapse on the part of the petitioner that led to belated filing of Form 9A.
The court while allowing the petition, held that the only primary reason in the order that belated filing of Form 9A by the petitioner-trust is not a procedural lapse, is in the facts a hyper technical and pedantic approach which cannot be countenanced. Such would be paradoxical to the clear intent of the legislature as evident from Section 119(2)(b) of the Income Tax Act read with the Circulars issued by CBDT cited aimed at mitigating, preventing hardship to the genuine assesses, in such situations.
Case Details
Case Title: Nav Chetna Charitable Trust versus Commissioner of Income Tax (Exemption)
Case No.: Writ Petition No. 470 Of 2024
Date: 20/12/2024
Counsel For Petitioner: Ajay Singh
Counsel For Respondent: Dinesh R. Gulabani
