Delay in Filing Form 10B is Procedural – Substantive Exemption under Section 11 Cannot Be Denied on Technical Grounds
The Hon’ble Andhra Pradesh High Court examined the rejection of condonation for 44 days’ delay in filing Audit Report in Form 10B, which had resulted in denial of exemption under Section 11. The Court observed that Form 10B is a procedural compliance, intended to support the claim of exemption, and cannot be construed as a rigid or inflexible condition to defeat substantive rights of charitable and religious institutions.
Considering that the assessee was registered under Section 12A, engaged exclusively in charitable and religious activities, and that the delay arose due to COVID-19 disruptions and the advanced age of the treasurer, the rejection was held to be unduly technical, arbitrary, and violative of principles of natural justice. The Court further observed that minor procedural lapses in filing Form 10B should not automatically result in denial of exemption when the audit report is otherwise available and the genuineness of activities is not in dispute. Accordingly, the rejection order dated 27.05.2023 was set aside, three weeks’ time was granted to furnish the requisite documents, and the Commissioner (Exemptions) was directed to reconsider the condonation application afresh in accordance with law, reaffirming that procedural prescriptions must advance, and not frustrate, the object of charitable exemption provisions.
The copy of the order is as under:
