Wp/2837/2025 Of Bhagini Mandal (Trust) v. Principal Chief Commissioner Of Income Tax

[ [34461] IN THE AT HYDERABAD(Special Original Jurisdiction) MONDAY, THE SEVENTEENTH TWQ THOUSAND PRESENT THE HONOURABLE [TtlE ]AClll'lC [chllEF ] AND'THE HONQURABLE [JU$TICE ] :2837 & 2998 0F [2025] RIT PETITION .P.N.2837 0F 20[5] ,t:'9Between: Reo bv it [president ]Mrs.Seema [Hipplgaonkar ][O/o ][4-1-8 Tilak]Bhaqini Mandal [(trust)']Road, Barkatpura, [S.O]Udmp'atty, [HYderabad- 500027] ...PETITIONER AND 1Principal Chief [Commissigner of ][lncomeTax, Norlh ][Biock' ][New ][Delhi] IThe lncome [Tax Department, ][lDeome ][Tax ][Departmgnt' ][Hy{erabad] JAssessment [Unit, E.Ramp Jawaharlal Nehru ][Stadium ][New ][Delhi] .,.RESPONDENTS 'Petition under Article 226 of the C9nstitution of lndia praying that in thecircumstances [stated ][in ][the ][affidavit ][filed ][therewith' ][the ][High ][Court ][may ][bq]pleased to issue a [Writ ][of ][Mandamus o1 ][qny other ][appropriate ][Writ ][Order ][or]Direction declaring [the order passed ][bv ][the ][1st Respondent ][in ] [and ][qrder ][Ng']ITBA/QoM/F/1712024-2511072127904(1)dated13-01-2025fortheAY2015.10rejecting [the ][Condqnation ][of ][delay ][applicqtion ][as ][arbitrary ][illegal ][bad ][in ][law']violativeoftheprinciplesofnaturaljusticeapartfrombeingviolativeofArticlesl4,lggand265oftheCQnstitutionoflndiaandconsequentlysetasidethesamBln the interests [of ].iustice.circumstances [stated ][in ][the ][affidavit ][filed ][therewith' ][the ][High ][Court ][may ][bq]pleased to issue a [Writ ][of ][Mandamus o1 ][qny other ][appropriate ][Writ ][Order ][or]Direction declaring [the order passed ][bv ][the ][1st Respondent ][in ] [and ][qrder ][Ng']ITBA/QoM/F/1712024-2511072127904(1)dated13-01-2025fortheAY2015.10rejecting [the ][Condqnation ][of ][delay ][applicqtion ][as ][arbitrary ][illegal ][bad ][in ][law']violativeoftheprinciplesofnaturaljusticeapartfrombeingviolativeofArticlesl4,lggand265oftheCQnstitutionoflndiaandconsequentlysetasidethesamBln the interests [of ].iustice. IA NO:1 [0F ][2025] Petltion [under ][Siection 151 ][CPC praying that ][in ][the circumstances stated ][in]the [affidavit ][filed ][in ][s;upport ][of ][the ][petition, ][the ][High Court may be ][p ][pased ][plqqse]direct the [regpondenls ][to ][stay ][all fu(her ][proceedings' ][including any ][reQovqfy']pqrguant tq the [qrder ][issued ][by ]t!" tSt [Regpondent' ] [and ][order ][!!fo']lTBtucoM/F/1 [7t20242511072127.gQh(t ]) Cated [13''01-2Q25' ][tor the fssessmen!]Year 2Q15-16, [pending disposal ][of ][the ][Main ][Writ ][fetition] Counse! [for ]lhe [Petitioner ][: ][ME.HIMANGINI SANGHI] Counsel [for ][the Respondents: ] [A'RAM+KRISHNA ][REDOY' SC FOR lT DEPT] 6*w.P.No.2998 OE05 Between: BhaoiniManda|(tlust),RepbyltpresidentMrsS.e.e-maHipplgaonkarrf/o4.1-STilakRoaf . Barkatpura, [S.(). ][Nampally, Hyderabad' ][5UUuz/] ...PETlTlONER(S) AND 1. . Principal [Chief Commissioner of income Tax, North ][Block' ][New ][Delhi] 2. The lncome [Tax Department, lncome ][Tax ][Departnrent' ][Hyderabad] 3.AssessmenttJnit'RoomNo4Ql.2ndFloqr,E-RarlpJawaharlalNehruSiadium, New [Delhi]Siadium, New [Delhi] ...RESPONDENTS Petition under [Article ][226 of ][the ][constitution ][of ][lndia ][praying ][that ][in ][the]circumstances [stated in ][the ][affidavit filed ][therewith, ][the ][High ][court ][nray ][be ][pleased]toissueaWritofMandamusoranyotherappropriate\{ritordarorDirectionthe [orcjerr ][passed ][by the ][1st ][Respondent ][in ] [and ][order ][No-]declaring lTBfuCoM/Fi171201|.4.2511072128180(1)dated13-01-2025fortheAY2014-15rejecting the Condoration [of ][delay ][application ][as ][arbitrary ][illegal ][bad ][in ][law']violative of the [principles ][of ][natural justice apart from being violative of ][Articles] :. J- &'r [" ]'jt 3.AssessmenttJnit'RoomNo4Ql.2ndFloqr,E-RarlpJawaharlalNehruSiadium, New [Delhi]Siadium, New [Delhi] ...RESPONDENTS Petition under [Article ][226 of ][the ][constitution ][of ][lndia ][praying ][that ][in ][the]circumstances [stated in ][the ][affidavit filed ][therewith, ][the ][High ][court ][nray ][be ][pleased]toissueaWritofMandamusoranyotherappropriate\{ritordarorDirectionthe [orcjerr ][passed ][by the ][1st ][Respondent ][in ] [and ][order ][No-]declaring lTBfuCoM/Fi171201|.4.2511072128180(1)dated13-01-2025fortheAY2014-15rejecting the Condoration [of ][delay ][application ][as ][arbitrary ][illegal ][bad ][in ][law']violative of the [principles ][of ][natural justice apart from being violative of ][Articles] :. J- &'r [" ]'jt 14,199 and 265 of the constitution [of ][lndia ][and ][consequently ][set ][aside ][the ][same ][in]the interests of [justice ]and to [pass ][in ][the ][interest ][of ][justice.] IA NO: ['l ]OF 2025 Petition un_dq( seqtion [151 ] [prqying ][that ][in the ][circumstances stated ][in]the affi{pvit filed in Eupport [of ]the [petilion, ]the [High ][cq-u( ][m4y ][be plgase{ ][plqagg]direct - [--__':- ]the respondents -:r tq [stav ]i[all ][further proceqdings, including ][any ][tecovery,]pursuant tq lhe or{er issued by the ['!et ][ResponQent, ][plN ]el9 [o1.@er ][No]ITBAiCQ[//E/17120e4-25t1072128180(1) [datqd ][1Q'01-2Q25, ][for ][the ][Aseessmenl]Year 2014-15, diqpos4l [of ]thq Main Wlit [Pglitio.ry']Pelqlns Counsql for the Petitio[er [: ]ME.H|MANGlNl Counsel for lhe Reqponlents: [A.RAMAKRISHNA ]BEDDY' [lT ] The Cqurt nlade the following: [cOMMoN ] lta! , fl I' THE HONOURABLE THE ACTING WSTICE ANDTHE HONOURABLE SMT. JUSTICE RENUKA WRIT PETITION Nos.2837 and.2998 of2O2$ COMMON ORDER:(Per Hon'ble The Acting Chief Justice) With tl-re consent finally heard. Ms. Himangrni Sanghi,learned coun s,e1 for the petitioner and Sri A. Ramakrishna [Reddy,]learned Standing Counsel for the Income Tax Department, [for]re spondents 2. Regard L,eing had to the similitude of the questio'rs involvedon the joint request of the parties, these matters were analogouslyheard ald decicled by this common order. 3. In W.P.l\os.2837 and 2998 of 2025, the orrlers dated13.01.2025, vrhereby the applications frled for coni.onation ofdelay of 3198 zLnd 3533 days respectively in filing Fo':m 10-B ofthe Income Tax Act, 1961, pertaining to Assessment Years 2015-16 and 20L4 15;, were rejected 4. Learned counsel for the petitioner submits that pretitioner isa charitable Trtrst. By placing reliance on additional affidavit, it issubmitted that apart from the aforesaid two years, th,: petitionersubmitted retllrns in time for last 45 years. The delzLy occurredbecause the Chartered Accountant of the petitioner's Trust was ., unwell and has undergone brain surgery. In this backdrop,alenient view should have been taken, when ample power was therewith competent authority. The impugned rejection orders runcontrary to the [judgments ]of the Guj arat and Bombay High Courts1nSanrodaya Charitable Trust v. Income-tax Officer(Exemption)r and AI Jamia Mohammediyah Education Societyv. Commissioner of Income-tax (Exemptionsf2 respectively. 5. Learned Standing Counsel for the Income Tax Departmentsubmits that in view of enormous delay on the part of thepetitioner, no fault cal be found in the impugned orders. 6. The parties have confined their arguments tb the extentindicated above. 7. Learned counsel for the petitioner categorically pleaded thatthe petitioner is a charitable Trust and in last 45 years withoutthere being any default, returns were filed. Thus, on twooccasions if delay had occurred because of reasons beyond thecontrol of the petitioner, a lenient view should have been taken. '1zozt1 [t8 ][ttn-oL ][zs3]'lzozs; [a8u ][ttn ][ar]'lzozs; [a8u ][ttn ][ar] il -t ,; 8. The Gr-rj ar'rt [High Court ][in][ SarvodaYa ][Charitable ][Trust] (supra) recorded [a's ][under:] 5. Learned Standing Counsel for the Income Tax Departmentsubmits that in view of enormous delay on the part of thepetitioner, no fault cal be found in the impugned orders. 6. The parties have confined their arguments tb the extentindicated above. 7. Learned counsel for the petitioner categorically pleaded thatthe petitioner is a charitable Trust and in last 45 years withoutthere being any default, returns were filed. Thus, on twooccasions if delay had occurred because of reasons beyond thecontrol of the petitioner, a lenient view should have been taken. '1zozt1 [t8 ][ttn-oL ][zs3]'lzozs; [a8u ][ttn ][ar]'lzozs; [a8u ][ttn ][ar] il -t ,; 8. The Gr-rj ar'rt [High Court ][in][ SarvodaYa ][Charitable ][Trust] (supra) recorded [a's ][under:] t'3o. We meLy [also ][refer ][to ][and ][rely ]'p9' [t ][decision ][of ][the]olit l nigtt'j,rurt [in ][the ][case ][of ][G' ][V' ][Infosutions ][(P') ][Ltd ][v']5"."iif?",,"tred [in ][12ole) ][13 ][ITR-oL ][164 ][(Delhi) ][; ][l2()l9l]+42 tb.rhii' [we ][mav quote ][the ][rerevant];di ;;;:;;; Jt,""*^tion" [thus ][(page ][17O ][of ][13 ][ITR-OL) ][:] "8. l'he rejection [of ][the ][petitioner's ][application]under s,:ctitn [1l9{2}(b) is ][only on the ][ground tnal]".".,t*g [," ]omission [the ][Cliief ][by the ][Commissioner's ][auditor ][opinion ][was ][the][not]pi. [-,rr" ]i rt",rlr,i.,.a This court [has ]- [diffrcultv ][to]*a"o,tma [wfLat ][more ][plea ][qr ][proof: ]Tl: ?;=?slfl-.rf a f-,r:"" U-ught "" [t"tttd' t'].ol [the]r.]"au"i,""-." [ot-its-edy1!q. ][The ][net ][result ]ffi* i" i,, "rlect [that ][the ][petitioner's]clairn- " [';;=-;__--r.-"r ]of [inadvertent ][mistake ][is ][sought ][to ][be].t rr as not bona [frde ][The ][court ][is of ][the]ooinion ",,t".i""d Lhat [an ][assessee ][has ][to ][take ][leave ][of ][iLs]"!ns.s [if it ][deliberately ][wishes ][.to ][follgo, ][.']substantial [amount as the ][assessee ][ls ][ascrloeo ][LL)]have in [the ][circumstances ][of this case ]['Bona ][fide']i" ,-" t. understood [in the ][context ][of ][the]circurnsLance [of ][any ][case ][Beyond ][a ][plea ][oI ][the.sort]the pelitioner [raises ][(concededly ][belatedlyl' ][trlere]..t.i,t t-t".""sari1y [te ][independent ][proof ][or]"I"i"r:af [to ][establish ][that the ][auditor ][in ][fact ][acted]without diligence. [The petitioner ][did ][not urge ][any]oth,,. 13aorr-rd" [such ][as ][illness ][of ][someone ][etc ]'*trr"it [-.Ja ][reasonably ][have been substaltiated];;";l";;J""t material ln [the ][circumstances ][of]tt" the [petitioner, ][in our opinion' ][was able ][to]sho,"r, "',,,t", trona [hde reasons ][why the ][refund ][claim ][could]not be made [in ][time.] 9. ThLe statute [for period of ][limitation ][prescribed ][in]i.or.i";o.t* [of ][law meant ][to ][attach ][frnality' ][and ][in]that sense [are ][statutes ][of ][repose ][; ]-however'*h"."'r". the [Legislature ][intends relief ][against];;;;ri; i., where [such ][statutes lead.to]';;;i;i; """."= =;,h. [lor'""..'ed ][authoritie ][s' ][including ][the]n".ra"". authorities [have ][to ][construe ][th^em ][in ][a]."l"or-r"Uf" [marrner. ][That ][was ][the ][effect ]- [anc]of this court's [decision ][in ][Indglonal];;;;;i \ t' Investment arrd Finance Ltd. v. ITO [2012] S43 ITRa4 (Delhi). This court is of the opinion that asimilar approach is to be adopted in th;circumstances of the case.,, 9. ThLe statute [for period of ][limitation ][prescribed ][in]i.or.i";o.t* [of ][law meant ][to ][attach ][frnality' ][and ][in]that sense [are ][statutes ][of ][repose ][; ]-however'*h"."'r". the [Legislature ][intends relief ][against];;;;ri; i., where [such ][statutes lead.to]';;;i;i; """."= =;,h. [lor'""..'ed ][authoritie ][s' ][including ][the]n".ra"". authorities [have ][to ][construe ][th^em ][in ][a]."l"or-r"Uf" [marrner. ][That ][was ][the ][effect ]- [anc]of this court's [decision ][in ][Indglonal];;;;;i \ t' Investment arrd Finance Ltd. v. ITO [2012] S43 ITRa4 (Delhi). This court is of the opinion that asimilar approach is to be adopted in th;circumstances of the case.,, 32. We.may also refer to the decision of this court in CIT v.Gujarat Oil and Allied Industries [19931 201 ITR 32S (cuj],wherein it is held that the provision regarding furnishine ;iprgcedural audit report proviso. with the It is return has directory to in be nature treated and as itsasubstantial compliance would suffice. In that case, theassessee had not produced the audit report along with thereturn of income but produced the same before thecompletion of the assessment. This court took the view thatthe benefit of exemption should not be denied merelv onaccount of delay in furnishing the same ana ii ispermissible for the assessee to produce the audit report at alater stage either before the Income-tax Ofhcer or before theappellate authorit5r by assigning sufficient cause.,, (trmphasis Supplied) 9. The aforesaid judgment was considered by the Bombay High Court in AI Jamai Mohammediyah Education Society (supra) and it was held as under: 6.Admittedloneris a charitable trust.Admittedl\/.[y, the ]the petitioner[petiti]hasbeen hlins its returns andform 10B for the assessment year 2015-2016, for theAdmittedl\/.[y, the ]the petitioner[petiti]hasbeen hlins its returns andform 10B for the assessment year 2015-2016, for the ! ! assessment vear 20 [1][ 7 ]-2OlA [to ][assessme][nt ][ye][ar ][2021-2022]within the due dates On [this]ound alone, in our [vieu]thedelav contlonatron [app][lication ][should][ have been ][all,:wed]because ttre failure to frle[returns for the ][ass][essment ][vear]2076-20 t 7' [,:ould ]be onlv due [to ][human ][error Even ][in ][the]impugned o:rder, the[re ][is ][no ][alleqa][tion ][of maia hdes. ][As ][held]try the Gr,rjarat High Court [in ][Saruodaya ][Chanta][ ble]Ttustv. lTr) [(Exemption) ]l(2O21\ [18 ] [253 ][(Guj); ][2020]SCC Onl,ine Guj 3597; [(2021\ ][125 ][taxmann.com 75 ][(Guj).1 ][,]the approach in the cases of the [present ][type ][shou ][d ][be]equitous, bzrlancing and [judicious. ][Technically, ][strictll' ][and]No. [1 ][might ][be ][justifir:d ][in]libera1ly speaking, respondent denying the exemption by rejecting [such ][condonation]application, but an assessee. a [public charitable ][trust ][with]almost over thirty [y]ears, which [otherwise ][satisfiesr ][the]COndition for availing of such exemotion. [should ][not ][be]denied the same merelv on [the bar ][of ][limitation ][especially]when the Legislature has conferred[wide ][discretionary]powers to condone such delav on the authorities concerned.Paragraphs 3O and 3l of Saruodaya [Chaitoble ][Tntst','. ] (Exemptiort) l(2o21]r 1'8 ITR-OL 253 (Guj); 2020 SCC OnlineGuj 3597; (2021) 125 taxmann.com [(Guj).] ][reacls as]under (page 271 of 18 ITR-OL): "3O. iVe may also refer to and rely upon a decision [of]the Delhi High Court in the case of G.V. [Infostttion:;]Put. t.td. v. Dg. CIT [(2019) 13 ITR-OL [164 ][(Delhi);]2019 SCC Onl-ine De1 6861; [(2019) ][1O:l]taxmimn.com 397 (Delhi); [(2019\ ][261 ][Taxmart 48il](Delhi).] We may quote the relevant observation:;thus 170 of 13 ITR-OL):..."ipage (trmphas s Supplied) "3O. iVe may also refer to and rely upon a decision [of]the Delhi High Court in the case of G.V. [Infostttion:;]Put. t.td. v. Dg. CIT [(2019) 13 ITR-OL [164 ][(Delhi);]2019 SCC Onl-ine De1 6861; [(2019) ][1O:l]taxmimn.com 397 (Delhi); [(2019\ ][261 ][Taxmart 48il](Delhi).] We may quote the relevant observation:;thus 170 of 13 ITR-OL):..."ipage (trmphas s Supplied) 10. If the factua,l backdrop of the [present ][case ][is ][considered, ][in]the light of aforr:said [judgments ]of the [Guj ]arat [and Borrbay ][High]Courts, it will be clear like noon day that there [is ][lot ][ol ][similarity]amongst these matters. The petitioners before both the [High]Courts were also Charitable Trusts and delay was lccasionedbecause of compelling reasons. The Courts opinecl that the l l assessee is a public Charitable Trust and [for ][last ][three ][decades]the conditions. [Denial ][on ][the basis of]have substantia,lly satisfred bar of limitation is not [justified. ][The ][case ][of ][the petitioner ][herein]is somewhat on better footing [because ][it ][has ][a ][record ][of]compliance for 45 years. I 1. In this backdrop, both [the ][Writ ][Petitions ][are ][allowed ][by]setting aside the impugned [rejection ][orders ][dated ][13.01'2025 and]consequently, the delay of 3198 [and ][3533 ][days respectively ][are]condoned, The respondents [are directed to proceed ][in ][accordance]with law from that stage. There [sha1l ][be ][no ][order ][as ][to ][costs']Miscellaneous applications, [if ][any, ][pending ][shall ][stand ][closed'] /orr,rrtfi-I'*'lolt?ftEF /ffRUE [COPY'/] ECTION To,1.The Principal Principal [Chief Commissioner ][of ][lncome ][Tax' ][North Block' New Delhi]1.The Principal Principal [Chief Commissioner ][of ][lncome ][Tax' ][North Block' New Delhi] 1.The Principal Principal 2.The [lncome Tax Department' ][lncome ][Tax Depafiment ][Hyderabad][New ]2.The [lncome Tax Department' ][lncome ][Tax Depafiment ][Hyderabad][New ] 2. The The Assessment [Unit' ][E-Ramp Jawaharlal Nehru ][Stadium' ][[New ]][Delhi]The Assessment [Unit' ][E-Ramp Jawaharlal Nehru ][Stadium' ][[New ]][Delhi] One [to Ms HIMANGINI SANGHI' ][Advocate ][tOPUCl] 4.One 5One CQ to [for ][lncome Tax Department]loPucl5One CQ to [for ][lncome Tax Department]loPucl 6. Two [CoPies] BSK FS HIGH COURT DATED:17102t2025 COMMON ORDERWP.No.2837 & 2998 ot 2025 ALLOWING THE WRIT PETITIONSWITHOUT COSTS B/"bt/L/-"r'' j:.$f- [..14 ],' ,ijl)u2 0 t'Ait 2025aTattcr-. I