Delhi High Court Directs Income Tax Commissioner To Accept BCI's Form No.10 After Condoning Delay
The Delhi High Court has directed the income tax commissioner to accept Form No. 10 submitted by the Bar Council of India (BCI) after condoning the delay.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the mandate of Section 119(2)(b) of the Income Act is to mitigate the genuine hardship of the assessee in certain circumstances and authorize the Commissioners...
The Delhi High Court has directed the income tax commissioner to accept Form No. 10 submitted by the Bar Council of India (BCI) after condoning the delay.
The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the mandate of Section 119(2)(b) of the Income Act is to mitigate the genuine hardship of the assessee in certain circumstances and authorize the Commissioners to admit the belated Form 10.
The petitioner, Bar Council of India, has sought quashing of an order passed by the Commissioner of Income Tax (Exemption) and directions to the respondent to accept Form No. 10 after condoning the delay in its submission.
BCI is the apex professional body created for the purposes of regulating legal education and profession under the Advocates Act, 1961. Being a non-commercial organization registered under Section 12A of the Income Tax Act, the income of the petitioner by way of fees from members, legal reforms, and education has been exempt from imposition of tax by virtue of the provisions of Section 10(23A) since April 1, 1962. The petitioner has been regularly submitting its returns of income.
For the Assessment Year 2016-17, the petitioner filed on 30.09.2016 its return of income claiming exemption under Section 10(23A). In the meantime, with effect from April 1, 2016, Sections 11 and 13 were amended by the Finance Act of 2015, but these amendments were not noticed by the petitioner at the time of filing its return of income. It was only during the assessment proceedings that the inadvertent mistake was noticed. The petitioner immediately took remedial steps and filed on 12.12.2018 a revised computation, seeking exemption under Section 11.
On December 17, 2018, the petitioner filed Form 10 along with an application seeking condonation of delay in filing the same. The petitioner also requested that the respondent dispose of the application for condonation of delay in filing Form 10 prior to December 31, 2018, i.e., before the completion of assessment proceedings for AY 2016–17.
The assessing officer passed the order without taking into consideration the exemption claimed by the petitioner. The respondent/department dismissed the condonation of delay application preferred by the petitioner, holding that the petitioner had no intention of filing Form 10 within the due date and was not prevented by any reasonable cause from filing the same.
The petitioner contended that the reason for the delay in filing Form 10 was a lack of awareness on the part of the petitioner's officials, coupled with no prejudice caused to anyone; the delay ought to have been condoned.
The department contended that no sufficient reason explaining the delay was tendered on behalf of the petitioner or assessee, so the delay condonation application was rightly rejected. Even in the return of income for AY 2016–17, the petitioner or assessee neither claimed accumulation under Section 11(2) of the Act nor claimed accumulation in Form 10, so the order suffers from no infirmity.
The court noted that CBDT Circular No. 17/2022, dated July 17, 2022, states that the Commissioners were authorized to condone delay beyond 365 days up to 3 years in filing Forms 9A and 10 for AY 2018–19.
The court held that the delay in filing Form 10 occurred because the amendments went unnoticed by the officials of the petitioner.
“We find no reason to disbelieve the explanation furnished by the petitioner to explain the delay in filing Form 10. Further, we are unable to fathom what benefit would accrue to the petitioner by delaying the filing of Form 10. In our opinion, the discretion conferred for condoning the delay was not correctly exercised by the Commissioner of Income Tax,” the court said while allowing the petition of BCI.
Counsel For Petitioner: Preetpal Singh
Counsel For Respondent: Zoheb Hossain
Case Title: Bar Council Of India Versus Commissioner Of Income Tax (Exemption)
Citation: 2024 LiveLaw (Del) 27
Case No.: W.P.(C) 4330/2019