Khandelwal Vaishya Samaj Charitable Trust, A v. The Commissioner Of Income Tax (Exemptions), 3Rd Floor,Kailash Heights, Lal Kothi, Tonk Road, Jaipur

[2025:RJ-JP:35345-DB] HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR D.B. Civil Writ Petition No. 5829/2020 Khandelwal Vaishya Samaj Charitable Trust, A-4, Janta Colony, JaipurThrough Its Secretary, Shri Kamlesh Khandelwal, S/o Late ShriChiranji Lal Khandelwal, Age About 66 Years, R/o C-5, Near JanUpyogi Bhawan, Janta Colony, Jaipur. ----Petitioner Versus 1.The Commissioner Of Income Tax (Exemptions), 3Rd Floor,Kailash Heights, Lal Kothi, Tonk Road, Jaipur 302015 2.The Assessing Officer (Exemptions), Ward-1, 3Rd Floor,Kailash Heights, Lal Kothi, Tonk Road, Jaipur 302015 ----Respondents HON'BLE THE CHIEF JUSTICE MR. K.R. SHRIRAM HON'BLE MR. JUSTICE MANEESH SHARMAJudgment REPORTABLE 03rd September 2025 ( PER HON'BLE MR. MANEESH SHARMA, J.) 1.The present writ petition has been preferred under Article226 of the Constitution of India assailing the order dated 11[th]September 2019 passed by the Commissioner of Income Tax(Exemptions), dismissing the application dated 14[th] August 2019filed by petitioner for condonation of delay in uploading/e-filing ofForm 10B; seeking the following reliefs: a) The application filed by the Petitioner-trust ondated 14.08.2019 ("Annexure-P/8") beforeRespondent No. 1 for condoning the delay be allowedand the impugned order u/s 119(2)(b) passed by theRespondent No. 1 on dated 11.09.2019("Annexure-P/9") be quashed and set aside. b) That the Respondent No. 2 be directed to allowbenefit of Section 11 & 12 of the Act to thePetitioner-trust. 2.Petitioner is a charitable trust and is an assessee under the provisions of Income Tax Act, 1961 (hereinafter referred to as the 'Act of 1961'). Petitioner is engaged in providing space for social gatherings, functions, medical camps, condolence meetings andgatherings of religious and charitable activities on no profit no lossbasis. 3.Petitioner filed return of income on 24[th] July 2017 for AY2017-18, claiming exemption u/s 11 & 12 of the Act, declaring Nilincome. Petitioner got its accounts audited in Form 10B on 27[th]June 2017 in compliance with Section 12A(1)(b) of the Act, whichwas filed physically but was not uploaded within the prescribedtime as per Sub-Rule (2) of Rule 12 of Income Tax Rules, 1962. 4.The Central Processing Centre (‘CPC’) disallowed theexemption claim and made addition of Rs.38,15,188/- u/s 143(1),raising a demand of Rs. 12,47,230/-. Upon receiving this demand,trustees of petitioner-trust discovered that Form 10B was notuploaded. Petitioner requested the auditor to upload the same andaccordingly, the auditor uploaded the same on 7[th] May 2019. 5.Learned counsel for petitioner submits that upon gainingknowledge of the fact that the demand had been raised byrespondent-department, petitioner had swiftly approached the CAFirm engaged by petitioner to know why the necessary return wasnot uploaded/electronically filed. Whereby, it transpired that, theassistant of the CA Firm; one Miss Neha Khandelwal, who wasassigned the task, had forwarded the finalized copy of the AuditReport to the office bearers of the petitioner-trust, but shesuddenly met with an accident resulting in fracture of her leg andtherefore, took leave from the office and did not report thepending work of uploading the audit report in Form No. 10B of thepetitioner to any other colleague. Consequently, e-filing of the saidaudit report in Form 10B, got delayed. 6.Thereafter, Petitioner filed an application for condonation ofdelay in uploading/e-filing of Form 10B u/s 119(2)(b) on 14[th]August 2019 (Annexure-P/8) before Respondent No. 1. 7.The Commissioner of Income Tax (Exemptions) rejected thecondonation application vide order dated 11[th] September 2019(Annexure-P/9) without considering the averments made in theapplication in the right perspective. 6.Thereafter, Petitioner filed an application for condonation ofdelay in uploading/e-filing of Form 10B u/s 119(2)(b) on 14[th]August 2019 (Annexure-P/8) before Respondent No. 1. 7.The Commissioner of Income Tax (Exemptions) rejected thecondonation application vide order dated 11[th] September 2019(Annexure-P/9) without considering the averments made in theapplication in the right perspective. 8.Counsel further contended that respondent department hasrejected the application for condonation of delay in a perfunctorymanner without recording any reasons for rejection or evenconsidering the bona fide reasonsmentioned in the application forcondoning the delay in uploading/e-filing of Form 10B. He furthercontended that for the lapse on part of the professional engaged(the CA Firm) due to unavoidable circumstances and their inactionor otherwise, assessee cannot be made to suffer. Therefore, praysthat the writ petition may kindly be allowed. 9.Learned Counsel for respondent reiterated what was statedin the impugned order and submitted that petitioner admittedlyhad committed default in complying with the applicable Rules andit cannot claim any excuse or exception for non-compliance withthe same. It is well settled law that ignorance of law is no excuse(ignorantia juris non excusat). He further contended that theimpugned order does not suffer from any legal infirmity.Therefore, petitioner is not entitled for any relief and prays thatthe writ petition may kindly be dismissed. 10.At the outset, in view of the ground pleaded in thecondonation application, we agree with Mr. Mahendra Gargieya,Adv., that there is no allegation of lack of bona fide in uploading/e-filing Form 10B, and uploading the same belatedly.Therefore, delay should have been condoned. 11.It is also evident from the impugned order that respondent-department has in a perfunctory manner rejected the applicationfiled by petitioner for condoning the delay, without considering thefact that the staff of the said CA Firm Miss Neha Khandelwal hadmet with an accident, which falls under the circumstances beyondcontrol, resulting in the delay caused in uploading/e-filing of Form10B. 12.In Esha Bhattacharjee Vs. Managing Committee of Raghunathpur Nafar Academy and Ors.[1] the Hon'ble Apex Court held as under:- "(i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonationof delay, for the courts are not supposed to legalise injustice but areobliged to remove injustice. (ii) The terms "sufficient cause" should be understood in theirproper spirit, philosophy and purpose regard being had to the factthat these terms are basically elastic and are to be applied in properperspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technicalconsiderations should not be given undue and uncalled foremphasis." 13. There is no lack of bona fide imputable to petitioner. Thatapart, in the present case, the delay was caused due to the factthat staff of CA Firm met with an accident which is beyond control.Therefore, the delay was not deliberate and cannot be attributedto petitioner. Thus, we are of the considered opinion that theapplication for condonation of delay dated 14th August 2019ought to have been allowed. Due to bona fide inactionon part ofthe professional engaged (CA Firm), petitioner cannot be made tosuffer. 14.Even otherwise, it is also pertinent to mention that anaffidavit explaining the reasons for delay in uploading/e-filing ofForm 10B was filed along with the writ petition as Annexure-P/5,which was not controverted by respondent. In M. Kalappa Sethiv. M. V. Laxmi Narain Rao[2], it was held that an uncontrovertedaffidavit shall be taken as an affidavit on fact. Therefore, thisCourt is left with no option but to accept the averments of theaffidavit (Annexure-P/5) to be true. 14.Even otherwise, it is also pertinent to mention that anaffidavit explaining the reasons for delay in uploading/e-filing ofForm 10B was filed along with the writ petition as Annexure-P/5,which was not controverted by respondent. In M. Kalappa Sethiv. M. V. Laxmi Narain Rao[2], it was held that an uncontrovertedaffidavit shall be taken as an affidavit on fact. Therefore, thisCourt is left with no option but to accept the averments of theaffidavit (Annexure-P/5) to be true. 15.The fact that there was any mala fide intention inuploading/e-filing Form 10B belatedly is not alleged in impugnedorder. The fact that petitioner is a charitable trust, is also notdenied. Looking at the charitable activities itself, in our view, delaycondonation application should have been allowed. Courts haverepeatedly held that such approach in the cases of present typeshould be equitious, balancing and judicious. Even thoughtechnically and strictly and liberally speaking, respondent might bejustified in rejecting application but the assessee, a publiccharitable trust, with so many years of charitable activities, whichotherwise satisfies the condition for availing such exemptionshould not be denied the same merely due on the bar of limitationespecially when the legislature has conferred wide discretionarypowers to condone such delay on the authorities concerned. 16.We find support for this view of ours in the judgment ofCo-ordinate Bench of this Court at Principal Seat, Jodhpur in thematter of Manav Seva Samiti v Principal Chief Commissionerof Income Tax[3]and judgment of Bombay High Court in Al JamiaMohammediyah Education Society vs. Commissioner of 2 AIR 1973 SC 627 Income Tax (Exemptions) Mumbai, Union of India[4] which were authored by one of us (the Chief Justice) where paragraph 6 reads as under: “6. Admittedly, Petitioner is a charitable trust. Admittedly, Petitionerhas been filing its returns and Form 10B for AY 2015-16, for AY2017-18 to AY 2021-22 within the due dates. On this ground alone,in our view, delay condonation application should have been allowedbecause the failure to file returns for AY 2016-17 could be only dueto human error. Even in the impugned order, there is no allegationof malafide. As held by the Gujarat High Court in SarvodayaCharitable Trust v. Income Tax Officer (Exemption)MANU/GJ/1687/2020 : [2021] 125 taxmann.com 75 (Gujarat), theapproach in the cases of the present type should be equitious,balancing and judicious. Technically, strictly and liberally speaking,Respondent No.1 might be justified in denying the exemption byrejecting such condonation application, but an assessee, a publiccharitable trust with almost over thirty years, which otherwisesatisfies the condition for availing such exemption, should not bedenied the same merely on the bar of limitation especially when thelegislature has conferred wide discretionary powers to condone suchdelay on the authorities concerned. Paragraphs 30 and 31 ofSarvodaya Charitable Trust (Supra) reads as under: "30. We may also refer to and rely upon a decision of theDelhi High Court in the case of G.V. Infosutions (P) Ltd. v.Dy: CIT [2019] 102 taxmann.com 397/261 Taxman 482. Wemay quote the relevant observations thus: "30. We may also refer to and rely upon a decision of theDelhi High Court in the case of G.V. Infosutions (P) Ltd. v.Dy: CIT [2019] 102 taxmann.com 397/261 Taxman 482. Wemay quote the relevant observations thus: "8. The rejection of the petitioner's application undersection 119(2)(b) is only on the ground thataccording to the Chief Commissioner's opinion theplea of omission by the auditor was notsubstantiated. This court has difficulty to understandwhat more plea or proof any assessee could havebrought on record, to substantiate the inadvertenceof its advisor. The net result of the impugned orderis in effect that the petitioner's claim of inadvertentmistake is sought to be characterised as not bonafide. The court is of the opinion that an assessee hasto take leave of its senses if it deliberately wishes toforego a substantial amount as the assessee isascribed to have in the circumstances of this case."Bona fide" is to be understood in the context of thecircumstance of any case. Beyond a plea of the sortthe petitioner raises (concededly belatedly), therecan not necessarily be independent proof or materialto establish that the auditor in fact acted withoutdiligence. The petitioner did not urge any othergrounds such as illness of someone etc., which couldreasonably have been substantiated by independentmaterial. In the circumstances of the case, thepetitioner, in our opinion, was able to show bona fidereasons why the refund claim could not be made intime. 9. The statute or period of limitation prescribed inprovisions of law meant to attach finality, and in thatsense are statutes of repose; however, wherever thelegislature intends relief against hardship in caseswhere such statutes lead to hardships, the4 2024 (4) TMI 939; [2025] 482 ITR 41 (Bom) concerned authorities-including Revenue Authoritieshave to construe them in a reasonable manner. Thatwas the effect and purport of this court's decision inIndglonal Investment & Finance Ltd. (supra). Thiscourt is of the opinion that a similar approach is tobe adopted in the circumstances of the case." 31. Having given our due consideration to all the relevant aspects ofthe matter, we are of the view that the approach in the cases of thepresent type should be equitious, balancing and judicious.Technically, strictly and liberally speaking, the respondent no. 2might be justified in denying the exemption under section 12 of theAct by rejecting such condonation application, but an assessee, apublic charitable trust past 30 years who substantially satisfies thecondition for availing such exemption, should not be denied thesame merely on the bar of limitation especially when the legislaturehas conferred wide discretionary powers to condone such delay onthe authorities concerned." 17.In our view also, it does not appear that assessee petitionerwas lethargic or lacked bona fide in making claim beyond theperiod of limitation. In fact, we do not understand why would anyparty, who is entitled to claim, would intentionally delay inuploading the required documents. 18.A similar view was taken in Shree Jain SwetamberMurtipujak Tapagachha Sangh Vs. Commissioner of IncomeTax (Exemption) and Anr.[5] 19.In our view, therefore, petition has to be allowed. We herebycondone delay. Rule made absolute in terms of prayer clause (a)and (b), which reads as under: a) The application filed by the Petitioner-trust on dated14.08.2019 ("Annexure-P/8") before Respondent No.1 for condoning the delay be allowed and the impugnedorder u/s 119(2)(b) passed by the Respondent No. 1 ondated 11.09.2019 ("Annexure-P/9") be quashed andset aside. b) That the Respondent No. 2 be directed to allowbenefit of Section 11 & 12 of the Act to the Petitioner-trust. 20.Petition disposed. (MANEESH SHARMA),J Seema/Varun/39 (K.R. SHRIRAM),CJ