Rajasthan High Court Condones Delay in Uploading Form 10B – A Relief for Charitable Institutions
Case: Manav Seva Samiti, Udaipur vs. Principal Chief Commissioner of Income Tax (Exemption), New Delhi
WP No. 4212/2025, dated 14.08.2025 (Rajasthan High Court)
Bench: Hon’ble Chief Justice R. Sriram
Counsel for Assessee: Adv. (CA) Siddharth Ranka
In an important ruling, the Rajasthan High Court has once again reinforced the principle that genuine and bona fide taxpayers should not be denied their rightful exemptions merely due to technical or procedural delays.
Background of the Case
The petitioner, Manav Seva Samiti, a charitable society registered under the Income Tax Act, was required to upload its audit report in Form 10B within the statutory time limit in order to claim exemption under sections 11 and 12.
• The society uploaded the Form 10B belatedly on 09.2020, with a delay of nearly 700 days.
• The actual audit itself was delayed by 115 days.
• The primary reason cited was the ill-health and advanced age of the Society’s President, who unfortunately passed away on 11.2022.
To regularize the delay, the society filed an application under section 119(2)(b) of the Income Tax Act before the Principal Chief Commissioner of Income Tax (Exemption), New Delhi, seeking condonation of delay.
Rejection by Chief Commissioner
On 17.08.2023, the Chief Commissioner rejected the application. The reasoning provided was that although the President was unwell, the Society also had a Vice-President, and therefore, the delay could not be excused solely on account of the President’s illness.
Approach to High Court
Aggrieved, the Society approached the Rajasthan High Court under writ jurisdiction. The Court examined whether the rejection order was justified and whether the delay could be condoned in the given circumstances.
High Court’s Observations
The Court took a sympathetic and pragmatic view, emphasizing the bona fides of the assessee. The key findings were:
1. No taxpayer would intentionally delayuploading an audit report and thereby risk losing valuable exemption benefits.
2. The explanation offered by the Society regarding the illness and subsequent demise of its President was reasonable and credible.
3. The rejection order of the Chief Commissioner was too rigid and technical, ignoring the larger principle of justice and fairness.
4. The Court noted specifically:
“In our view also, it does not appear that the assessee petitioner was lethargic or lacked bona fide in making claim beyond the period of limitation. In fact, we do not understand why would any party, who is entitled to claim, would intentionally delay in uploading the required documents.”
Accordingly, the High Court condoned the delay and allowed the writ petition in favour of the assessee society.
Significance of the Ruling
This judgment carries significant implications for charitable trusts and societies:
• Relief to genuine institutions:The ruling reaffirms that bona fide and non-malicious delays deserve condonation.
• Liberal interpretation of Section 119(2)(b):The powers of condonation under this section are discretionary but should be exercised with a humanitarian and justice-oriented approach.
• Technical vs. Substantive justice:The Court has once again reminded the tax administration that technical lapses must not overshadow genuine entitlement to tax benefits.
• Encouragement to compliance:By protecting institutions that make genuine efforts, the judiciary ensures trust in the tax system.
Conclusion
The Manav Seva Samiti case is a welcome development for the charitable sector. It highlights that the judiciary recognizes the ground realities faced by non-profit organizations and prioritizes substance over technicalities. While timely compliance remains essential, this judgment provides reassurance that bona fide hardships will not be allowed to result in denial of statutory exemptions.
The copy of the order is as under:
