Delay of 2372 days in filing Form 10B Condoned by Bombay HC
Facts of the Case:
The Borivli Education Society, a charitable institution, manually filed Form 10B within the prescribed deadline for Assessment Year 2014-15 but failed to uplod it electronically due to a bona fide misunderstanding by its Chartered Accountant.
The Income Tax Department denied exemption under Section 11, citing non-electronic filing. Despite multiple attempts by the petitioner to rectify the issue (including manual filing, rectification applications, and affidavits from the CA), the Department rejected the condonation request without granting a hearing.
Assessee’s Arguments:
The manual filing of Form 10B was substantial compliance with the law, and non-electronic submission was a technical lapse.
The assessee had no mala fide intent and gained no undue advantage from the delay.
The rejection of exemption violated natural justice as the authorities did not issue a show cause notice before rejecting the exemption claim.
The delay should be counted from the date when the petitioner was first informed that non-electronic filing was the reason for rejection.
Cour’s Observations & Ruling:
The petitioner filed Form 10B within time manually, and the Revenue did not dispute this fact.
The Chartered Accountant, in an affidavit, stated that she genuinely believed manual filing was sufficient. The Court acknowledged this as a bona fide error.
The Department failed to communicate the non-electronic filing issue for years, causing the delay to be involuntary rather than deliberate.
The rejection orders were passed without a hearing, violating natural justice.
The quality of the explanation and the prompt corrective actions by the petitioner outweighed the length of the delay.
The Court emphasized that procedural non-compliance should not defeat substantive rights when there is no malice or undue advantage gained.
The Copy Of the order is as under:
