2023 (8) TMI 89 - HC - Income Tax

Exemption u/s 11 denied - delay in filing of the returns and the relevant Form under Section 12(1)(b) in Form 10B to avail the exemption available to a Charitable Trust - HELD THAT - Relevant financial years coincides with the period when the country was under the first and second wave of Covid 19 pandemic. Thus, the delay in filing the Returns was not willful as is evident from the facts that has been narrated above. The petitioner Trustee died on 19.03.2021 and the other Trustee also admitted in hospital on 04.03.2021 one day after the Managing Trustee was admitted in the hospital. There are several factors which are contributed to the delay in filing of the returns. The benefit which has been enjoyed by the petitioner during the previous assessment years has been denied only because the Petitioners' Trust was unable to access the Income Tax Portal, where the assessment order and notices were being communicated. The other compounding factor was that the auditor was also admitted in the hospital and that the parents of the auditor were also admitted who later died. Court is inclined to interfere with the Impugned Order by setting aside the Impugned Order and remits the case back to the respondents to pass a fresh order on merits and in accordance with law within a period of sixty (60) days from the date of receipt of a copy of this order.

Summary

Issues involved: Challenge to Impugned Intimation Notice and Demand Order under Section 143(1) of the Income Tax Act for Assessment Years 2020-2021 and 2021-2022.

Judgment Summary:

Issue 1: Compliance with notice requirements under Section 143(1)
The petitioner, an Educational Charitable Trust, challenged the Impugned Intimation Notice and Demand Order, arguing that the 30-day notice requirement under proviso to Section 143(1) was not met by the Department. The petitioner cited delays in filing returns due to Covid-19 pandemic, illness, and death of key individuals associated with the Trust, leading to difficulty in accessing the IT Portal for filing Returns. The court acknowledged the procedural irregularity in not issuing the notice but deemed it non-fatal to the proceedings. The court set aside the Impugned Order and remanded the case back to the respondents for a fresh order within 60 days.

Issue 2: Delay in filing Returns and availing exemption under Section 11
The petitioner explained the delays in filing returns, including illness and death of key individuals, and challenges faced in accessing the IT Portal. The petitioner sought condonation of the delay in filing Form 10B under Section 12(1)(b) of the Income Tax Act. The court considered the circumstances, including the impact of Covid-19, and noted that the delays were not willful. The court allowed the benefit of Section 11 for the petitioner and directed them to obtain suitable condonation from the Commissioner for the delay in filing Form 10B.

Conclusion:
The court, after considering arguments from both sides, set aside the Impugned Order due to procedural irregularities and remanded the case for a fresh order. The court emphasized the need for the petitioner to obtain condonation for the delay in filing Form 10B. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed.