Case Note & Summary
The petitioner, Al Jamia Mohammediyah Education Society, is a charitable trust registered under the Bombay Public Trusts Act, 1950. For Assessment Year (AY) 2016-17, it filed its return of income on 6 September 2016 declaring nil income and claiming a refund of Rs. 70,710/-. The trust's accounts were audited and the audit report was filed, but the trust failed to file Form No. 10B (the audit report in the prescribed form) along with the return. Form 10B was eventually filed on 15 February 2020, with a delay of approximately 1257 days. The trust then filed an application under Section 119(2)(b) of the Income Tax Act, 1961 before the Principal Commissioner of Income Tax (Exemptions) seeking condonation of the delay. The application was rejected by an order dated 28 March 2024 on the ground that the CBDT Circular No. 9/2014 dated 16 December 2014, which empowers the Commissioner to condone delays in filing Form 10B, applies only prospectively from the date of the circular and not to AY 2016-17. Aggrieved, the trust filed a writ petition before the Bombay High Court. The legal issue was whether the CBDT circular applies retrospectively to pending assessments. The petitioner argued that the circular is procedural and beneficial and should be applied retrospectively, while the revenue contended that the circular is prospective and that the petitioner had an alternative remedy by way of appeal. The court held that the circular is procedural and beneficial in nature, and therefore applies retrospectively to pending assessments including AY 2016-17. The court also rejected the alternative remedy objection, noting that the issue was purely legal and involved interpretation of a circular. The court set aside the impugned order and directed the Principal Commissioner to consider the petitioner's application under Section 119(2)(b) on its own merits, without rejecting it solely on the ground of delay. The petition was allowed with no order as to costs.
Headnote
A) Income Tax - Charitable Trust - Condonation of Delay in Filing Form 10B - Section 119(2)(b) read with Section 12A(1)(b) of the Income Tax Act, 1961 - CBDT Circular No. 9/2014 dated 16.12.2014 - The petitioner, a charitable trust, filed its return of income for AY 2016-17 but filed Form 10B belatedly after 1257 days. The court held that the CBDT circular, which empowers the Principal Commissioner or Commissioner to condone delay in filing Form 10B, applies retrospectively to pending assessments. The court directed the respondent to consider the petitioner's application under Section 119(2)(b) on merits, without rejecting it solely on the ground of delay. (Paras 1-8) B) Income Tax - CBDT Circular - Retrospective Application - Section 119(2)(b) of the Income Tax Act, 1961 - CBDT Circular No. 9/2014 dated 16.12.2014 - The court interpreted that the circular, which relaxes the time limit for filing Form 10B, is procedural and beneficial, and thus applies to pending assessments including AY 2016-17. The court relied on the principle that procedural circulars are retrospective unless expressly made prospective. (Paras 5-7) C) Income Tax - Writ Jurisdiction - Alternative Remedy - Section 119(2)(b) of the Income Tax Act, 1961 - The court rejected the revenue's objection that the petitioner should have availed alternative remedy, holding that the issue involved interpretation of a circular and was purely legal, warranting interference under Article 226. (Para 4)
Issue of Consideration
Whether the delay in filing Form No.10B under Section 12A(1)(b) of the Income Tax Act, 1961 can be condoned under Section 119(2)(b) of the Act, and whether CBDT Circular No. 9/2014 dated 16.12.2014 applies retrospectively to Assessment Year 2016-17.
Final Decision
The court allowed the writ petition, set aside the impugned order dated 28 March 2024, and directed the Principal Commissioner of Income Tax (Exemptions) to consider the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961 on its own merits, without rejecting it solely on the ground of delay. No order as to costs.
Law Points
- Condonation of delay
- Section 119(2)(b) Income Tax Act
- 1961
- CBDT Circular No. 9/2014
- Form 10B
- Charitable trust
- Retrospective application of circular
- Liberal construction of procedural provisions
