2020 (1) TMI 334 - HC - Income Tax

Condonation of delay in filing Form No.10 under section 11(2) of the Act - Petitioner a public trust, is registered under section 12AA - primary ground of refusal that is the Petitioner did not claim of accumulation under section 11(2) in the return of income - HELD THAT - There is no finding in the impugned order as to whether the entry was made due to an error or it was a deliberate act. The case of the Petitioner of an error of making a claim under a wrong head needs to be considered by the Commissioner. It is not possible for us to decide this question of fact in the first instance. It is for the Commissioner to decide whether the action of the Petitioner was due to inadvertence as claimed by the Petitioner or is a part of a design as claimed by Respondents. In these circumstances, we deem it appropriate to remand the proceedings to the Commissioner to consider this aspect. The order dated 26 September 2019 passed by the Commissioner of Income Tax (Exemptions) is quashed set aside. The application filed by the Petitioner for condonation of delay stands restored for consideration of the Commissioner. The Commissioner will consider the case of the Petitioner on its own merits. If the Commissioner concludes that the Petitioner had made a claim inadvertently in a wrong column, then the question whether cogent reason exists for condonation of delay would arise for consideration. Petitioner will appear before the Commissioner on 20 January 2020, for the Commissioner to give further direction as regards the date of hearing of the application. All contentions are kept open.

Summary

Issues:
Challenge to order of Commissioner of Income Tax under Section 119(2)(b) regarding delay in filing Form No.10 under section 11(2) of the Income Tax Act 1961.

Analysis:
The petitioner, a public trust registered under section 12AA of the Act, challenged the order passed by the Commissioner of Income Tax regarding the condonation of delay in filing Form No.10 under section 11(2) of the Act. The petitioner filed the return of income claiming accumulation of income under section 11(2) which was refused due to the delay in filing Form 10. The main issue in the petition was the rejection of the application for condonation of delay by the Commissioner, citing reasons of no claim of accumulation under section 11(2) in the return of income and lack of cogent reasons for the delay.

The petitioner contended that the claim of accumulation was indeed made in the return of income but under a wrong head, attributing it to an error while filling up Form No.10 electronically. The petitioner argued that this procedural error should not result in the rejection of the substantive claim of accumulation. On the other hand, the respondents argued that the petitioner deliberately chose not to enter the amount in the proper column to gain an advantage.

The High Court considered the arguments of both parties and noted that there was no finding in the impugned order regarding whether the entry was made due to an error or a deliberate act. The court held that this factual question should be decided by the Commissioner and remanded the proceedings for further consideration. The court quashed the order of the Commissioner and restored the application for condonation of delay for the Commissioner to reconsider. The Commissioner was directed to evaluate whether the claim was made inadvertently in the wrong column and to determine if there were cogent reasons for condonation of delay.

The petitioner was instructed to appear before the Commissioner for further directions, and all contentions were kept open for future consideration. The petition was disposed of with the above terms, emphasizing the need for a thorough examination of the facts by the Commissioner to make a well-informed decision.